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Exploring the Impact of China’s Smart Grid Projects

The Chinese government has been an early pioneer of smart grid technology. Since embarking on its national smart metering project at the turn of the decade, more than 200 million new electricity meters have already been deployed across China.

However, according to the latest market study by ABI Research, only around 50 million have so far been connected with bi-directional communication that can support true smart meter capabilities -- such as 'demand response' measurement.

In short, this key smart meter project has not been that intelligent -- relatively speaking. But it is set to get smarter, and that means another wave of opportunity for utility industry technology providers.

China’s smart meter rollout is a key deployment representing a significant share of smart meter shipments and investment worldwide. Furthermore, connectivity technology semiconductor providers -- such as ST Microelectronics, Silicon Labs, and Atmel -- are likely to benefit.

Smart meter vendors -- including Echelon, Siemens, and Landis+Gyr -- are also anticipating an uplift from these projects. Now the program is reaching a key stage where connectivity will come to already deployed and new electricity meters alike.

Increasingly, that connectivity will be bi-directional as China’s utilities’ smart grid plans expand to manage smart meter use as well as collect usage data. Investment to deliver bi-directional communications will also bring a further wave of competition from Chinese and overseas technology providers.

"Existing meter specifications have ensured meters deployed over the past five years can be upgraded to support bi-directional connectivity. This combined with a recent commitment to consider wireless as well as PLC connectivity, means that there is a growing opportunity for existing and new connectivity hardware providers," says Jonathan Collins, principal analyst at ABI Research.

To date, meter deployments have so far been dominated by Chinese meter manufacturers, but components often leverage technology and products from overseas suppliers.

The shift to greater connectivity provides further potential for non-Chinese players to see their technology included and many suppliers are looking to partner with Chinese meter manufacturers to enable this transition.

The next 12 months heralds a key period of technology assessment that will drive new industry partnerships as players bid to gain greater traction in the Chinese market.

So far, within the smart meter rollout by China’s State Grid Corporation of China (SGCC) and Southern Grid Utilities, new meters have ranged from unconnected to single direction communication. And, one-way communication is only suitable for less complex applications -- such as remote meter readings.

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