NEW YORK (Reuters) - Smart power grid company Echelon Corp ELON.O and T-Mobile USA DTEG.N said on Thursday they had formed an alliance to use T-Mobile’s wireless network to link “smart meters” to utilities.
T-Mobile will provide embedded SIMs inside a cellular radio module in Echelon’s smart meters, which collect power usage and other data for the company’s network.
Several U.S. utilities have begun testing smart meters in pilot projects that are designed to measure power demand at the consumer level and help the electricity providers generate and distribute power more efficiently.
Smart meters are a key part in the rollout of “smart grid” technology that power companies hope will enable the United States to use electricity far more efficiently.
Experts say upgrading the nation’s power grid is essential to help accommodate the growth of green power sources such as wind and solar, as well as enabling the system to eventually supply a fleet of electric cars.
Echelon, which has shipped more than 100,000 of its smart meters to U.S. utility owner Duke Energy (DUK.N) and more than 1.6 million worldwide, said the partnership with T-Mobile would provide a cost-effective communications tool for the meters.
Its meters cost about $100 apiece excluding installation.
Eventually, companies like Echelon hope to link smart meters to “smart appliances” which consumers can program to operate during hours when electricity demand is low.
Currently, utilities pay more for power generated during “peak” daytime hours. They hope to shift some of that usage to early morning or evening hours when demand is lower, allowing them to buy cheaper power and pass the savings on to consumers.
That technology is already in use for some businesses and factories that have agreed to reduce their electricity usage during periods when supplies are stretched. Those companies receive power at lower prices in exchange for agreeing to reduce their demand during those periods.
T-Mobile USA said the embedded SIM, slightly larger than the head of a pin, will be built of silicon rather than plastic, making it very durable, since too much heat, vibration, or humidity can damage traditional SIM cards.
Durability problems have been a key obstacle for the adoption of remote, smart grid devices, and T-Mobile expects the potential market to be huge.
“There are 300 million electric meters. You’ve got gas and water on top of that. It’s a very, very large opportunity ... billions of dollars,” John Horn, national director of T-Mobile USA’s M2M division, told Reuters.
The partnership’s wireless technology will be deployed on low-voltage transformers, which typically provide electricity connections to between four and 10 homes or businesses.
Data provided from the transformers to a central collection point at the utility will allow the power provider to easily pinpoint problems in the network and reduce cost and duration of power outages, the companies said.
Editing by Matthew Lewis