By Jeff St. John
After years of partnering with U.S. and European utilities on smart meter projects, IBM finally has an entire nation to work with.
The computing giant announced Wednesday that it is undertaking a €70 million ($89.9 million), five-year project to "design and deliver a nationwide smart utility implementation" to the Mediterranean island nation of Malta.
The project with the Maltese national water and electric utilities WSC and Enemalta will involve replacing 250,000 analog electric meters with smart meters, along with integrating water meters into a system that can monitor and manage meter readings and suspensions, IBM said.
It will also provide customers with Internet tools to track energy use in real time and choose utility plans, as well as options for pre-paying their water and power bills, IBM said.
IBM didn't announce financing terms or the partners it was working with on the project, which was actually signed in late 2008 and is set for completion in 2012.
But given its increasing involvement in smart grid related efforts, bringing smart meters to Malta – which has a population of about 403,000 and a land mass slightly less than twice that of Washington, D.C. – might well rank among one of IBM's smaller efforts.
IBM has been cutting smart metering partnerships in a big way in the past year, with pilot projects with utilities including Texas' CenterPoint, Ohio-based American Electric Power and Michigan utility Consumers Energy (see IBM Snags Another Smart Grid Deal).
In November, IBM announced a long-term research partnership with French utility EDF to research computer modeling, optimization software and other tools to explore how a smart grid will work when pieces like two-way communications networks, distributed power storage and generation from renewa ble sources are incorporated (see IBM, EDF to Research Smart Grid Tech).
It also formed its own group, the Global Intelligent Utility Network Coalition, to work with utilities on smart grid efforts, and is a member of other smart grid industry alliances, including the GridWise Alliance and the Demand Response and Smart Grid Coalition.
Drew Clark, director of strategy for IBM's Venture Capital Group, has targeted "smart grid" companies – from smart meter makers and the companies that offer software and communication networking technologies to serve them to startups that offer ways to integrate – as the hot spot for venture capital investment this year (see For 2009, It's All About Smart Grid and Storage).
Smart grid and energy efficiency startups overtook biofuel makers to take the second-largest chunk of venture capital invested in the third quarter of 2008.
That's not surprising, given the scope of the task involved. Transforming the United States' electric grid alone into a "smart grid" will involve an investment of $50 billion to $65 billion, according to the Edison Electric Institute.
And the stimulus bill now working its way through Congress could give a big boost to those plans, with $32 billion aimed at improving the nation's transmission grid, and $4.5 billion of that directed specifically at grants for smart grid-related projects (see Draft Stimulus Plan Has Billions for Smart Grid).
An investment in Malta's smart grid infrastructure might offer paltry returns, compared to the potential in the United States. But given Malta's lack of plentiful fresh water supplies and domestic sources of energy, IBM's assistance may well be appreciated by the Maltese government.