Echelon Corporation (Nasdaq: ELON), a global leader in energy control networking for the smart grid, announced a 1,500 unit pilot in Brazil through its partner ELO at Cemig's City of the Future project in the Sete Lagoas region. Cemig is the largest power company in Brazil, serving over 7 million customers in 774 municipalities. Echelon is providing smart metering sub-systems to ELO, leveraging its proven Energy Control Networking Platform. With some of the highest non-technical loss rates in the world, and increased use of distributed generation, the Brazilian market needs a multi-application smart grid infrastructure such as the Echelon solution that encompasses more than just traditional metering.
Cemig's City of the Future project is designed to assess the capability and benefits of the adoption of a Smart Grid for future deployment. Its primary goals are to motivate customer engagement through meter installation, workshops, and monitoring and to validate new services, assess benefits, and improve operational efficiency for advanced metering infrastructure and distribution automation. The Sete Lagoas region includes 95,000 residential, commercial, and industrial customers. Sete Lagoas was chosen because it includes a range of old and new infrastructure within high, medium and low voltage, telecommunications systems, offering a heterogeneous network, economic profile, and range of applications.
"With strong fundamental economic drivers, the Brazilian market represents a large and attractive opportunity and we're pleased to show successful trials through our partner ELO," said Ron Sege, chairman and CEO of Echelon. "We are successfully targeting growing markets, applying our power line communication and Control Operating System (COS) software and laying the groundwork for a multi-application edge-of-the-grid solution with high profile local partners such as ELO."
This past August, Brazil's National Agency of Electrical Energy, ANEEL, announced long awaited regulations regarding the deployment of smart meters throughout Brazil. These new regulations require all new meter installations to be smart meters by early 2014, but they do not require the replacement of existing legacy meters. While this reduces the overall Brazil market size from previous estimates by approximately 25% to $28 billion per Northeast Research, it clarifies the process and provides a timeline and specifications so that utilities have a path for investment. With non-technical losses in Brazil estimated between 10-30%, smart meter deployments can yield immediate savings and leverage other smart grid applications such as renewables and home energy management.
"The Brazilian market is very large and it is now prepared to make the bold steps toward modernization and creating a truly smart grid," said Marcos Rizzo, vice president of Business Development of ELO. "We believe that basing our smart meter on the industry standard Open Smart Grid Protocol (OSGP) and our system solution on Echelon technology enables us to uniquely deliver improved quality of service, reduce peak demand and operational costs, and protect revenue for our customers."