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Smart Grid Acquisitions by ABB, GE, Siemens Point to Coming $20 Billion Boom

Nearly 75% of the smart grid money will come from utilities updating their grids, while industrial giants work to secure their piece of the pie

By Maria Gallucci

Feb 3, 2011

He continued: "The electricity industry is conservative and very slow to adopt new technologies, so if utilities have worked with a company in the past, they are more likely to adopt new smart grid technologies if they are being brought to them by a company that they already have a relationship with."

Switzerland-based ABB has led the charge. The firm provides electrical equipment at power plants and utility grids in more than 100 countries and made $32 billion in revenues in 2009.

Last May, the company spent $1 billion to acquire Atlanta-based , a major software, data and advisory services provider for utilities and smart grid markets. In December and January, ABB added (IKS) of Pennsylvania and of Georgia, both privately owned specialist software providers, to its Ventyx portfolio for undisclosed amounts.

Connecticut-based GE Energy, whose parent company made $38 billion in 2010 revenues, has gone on a spree of its own.

Last fall, it acquired large smart grid software companies of Australia and of Montreal for undisclosed amounts. Earlier this year, the corporation acquired Remote Energy Monitoring, a software and hardware firm in Australia and the U.K. that helps households and utilities to more efficiently manage energy usage.

German energy behemoth has similar ambitions in mind. Early last year, the company said its goal is to receive orders worth more than €6 billion, or $8.3 billion, for smart grids by 2015. The company made $38 billion in sales on energy-conserving electricity grids, wind power and solar energy last year.

"The Smart Grid market will see increasingly dynamic growth fueled by climate change and economic stimulus programs. We want to grow twice as fast as the overall market," said Wolfgang Dehen, CEO of the Siemens Energy Sector, .

"The world needs intelligent power grids in order to meet the growing demand for energy in a way that is eco-friendly and reliable. We estimate that the demand for electricity will double by 2030, due to trends like , which is just emerging," he said.

Lux Research's Minnihan said that leading networking firms like , and , plus mid-sized startups such as of Redwood City, Calif., are also gearing up to capitalize on rising demand from utilities and governments.

"This is the next big market explosion for the electricity industry. It makes sense that they all want a piece of the pie," he said.

Image: Duke Energy

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