Danish Utility Selects Echelon's Advanced Metering System for System-Wide Deployment

EnergiMidt to Upgrade 170,000 Homes With Smart Meters
SAN JOSE, Calif.--(Business Wire)--
Echelon Corporation (NASDAQ:ELON) announced today that Eltel
Networks A/S, a value-added reseller of Echelon's Networked Energy
Services (NES) advanced metering infrastructure, has been awarded a
contract by the Danish utility EnergiMidt to deploy the NES system to
all of its 170,000 residential customers. One of the five largest
electricity distribution companies in Denmark, EnergiMidt, a
co-operative owned by its customers, is focused on providing
innovative and high-quality service. NES value-added reseller Gorlitz
AG is also participating in the project, providing their EDW3000
software, a full-featured meter data management system (MDMS) and
integration platform which runs on top of the NES system software to
provide a rich set of utility applications. Revenue to Echelon for the
project, including meters, data concentrators, and software, is
expected to total approximately $18 million. Volume shipments are
targeted to begin in the fourth quarter of 2008 and to continue into
2010.

"As a large, customer-owned utility it was important to us to
provide our customers with a system that is world-class, not only in
terms of its reliability and functionality, but also in its ability to
allow us to offer new and innovative services over time," said Holger
Blok, CEO, at EnergiMidt. "With Eltel's NES based solution, we have
achieved just that. It is a proven system with a market-leading set of
functions, and we are building an infrastructure that will enable us
to offer new services to better serve customer needs, including the
potential for in-home products to use information from the meter to
implement automated demand response, energy management, and other
programs."

"We are pleased to win another project in Denmark, building on our
success with ELRO and establishing Eltel and the NES system as one of
the leading advanced metering systems in the country," said Sonny
Nielsen, Eltel's CEO. "As demonstrated in this project, where we are
offering EnergiMidt a highly innovative set of capabilities to reach
beyond the meter into the home, the power, flexibility, and
expandability of the NES system gives us the ability to deliver
solutions to our customers that meet their current requirements and
future needs. We expect to continue to build on this competitive
advantage to grow our market share."

"Utilities like EnergiMidt and partners like Eltel and Gorlitz are
at the forefront of moving to the next generation of utility
infrastructure," said Mark Ossel, Echelon's vice-president of utility
sales, Northwest Europe. "Their focus on building a 'smart grid' that
connects the utility and its customers rather than just an advanced
metering infrastructure (AMI) lays the foundation for future services
across their customer base that can help customers lower their energy
costs, reduce their carbon footprint, and increase the reliability of
the electricity grid."

The NES advanced metering infrastructure from Echelon consists of
a family of highly integrated, advanced electronic electricity meters
accessed via a web services based network operating system over an IP
networking infrastructure. Unlike systems with a dedicated radio per
metering point, multiple NES meters can share a single IP connection
through the use of Echelon's proven standards-based power line
networking technology. This drives down the per-point connection cost
and enables the system to easily and cost-effectively incorporate new
wide area networking technologies over the life of the system.

About Eltel Networks

Headquartered in Helsinki, Finland, Eltel Networks is the InfraNet
Company(TM) in Europe, specializing in the construction, maintenance,
and upgrading of electricity and telecommunications networks. The
Group, with its 8,500 employees, has operations in the Nordics,
Poland, the Baltics, and Germany. More information about Eltel
Networks can be found at http://www.eltelnetworks.com.

About Gorlitz AG

GORLITZ AG, based in Koblenz, Germany, is one of the leading
companies in the European market for devices and systems for energy
data management solutions. GORLITZ provides its automatic meter
management (AMM) systems to multi-vendor utilities, municipalities and
industrial users all over in Europe. More than 350 utilities have
installed metering systems and devices from GORLITZ. More information
about GORLITZ can be found at http://www.goerlitz.com

About Echelon Corporation

Echelon Corporation (NASDAQ:ELON) is a networking company that
provides products and systems that can monitor and save energy; lower
costs; improve productivity; and enhance service, quality, safety, and
convenience by connecting everyday devices in utility, buildings,
industrial, transportation, and home control systems. Tens of millions
of smart devices based on Echelon's LonWorks products and Networked
Energy Services (NES) systems are used around the world today,
bringing benefits to consumers and industry. More information about
Echelon can be found at http://www.echelon.com.

Echelon, LonWorks and the Echelon logo are registered trademarks
of Echelon Corporation registered in the United States and other
countries. Other product or service names mentioned herein are the
trademarks of their respective owners.

This press release may contain statements relating to future
plans, events or performance, including statements regarding the size
and timing of the EnergyMidt project with Eltel. Such statements may
involve risks and uncertainties, including risks associated with the
ability of Eltel's system, and the NES system on which it is based, to
perform as designed; the risk that the EnergiMidt project is cancelled
or reduced in scope; risks associated with potential production or
shipment delays for NES meters and other components; risks that the
deployment and system integration activities with Eltel or other
partners in the project are not successful, do not meet their target
dates, do not expand or gain momentum or cause EnergiMidt to terminate
the project; the risk that the application of U.S. generally accepted
accounting principles could significantly affect the timing of NES
revenues that Echelon expects to recognize under the project; and
other risks identified in Echelon's SEC filings. Actual results,
events and performance may differ materially. Readers are cautioned
not to place undue reliance on these forward-looking statements, which
speak only as of the date hereof. Echelon undertakes no obligation to
release publicly the result of any revisions to these forward-looking
statements that may be made to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated events.

Echelon Corporation
Julia O'Shaughnessy, +1-408-938-5357
julia@echelon.com
or
Atomic Public Relations
Allyson Stinchfield, +1-415-402-0230
allyson@atomicpr.com

Copyright Business Wire 2008