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Siemens, British Gas Invest in Broadband-Over-Powerline Company For Smart Grid

Siemens, British Gas, and existing investor Climate Change Capital Private Equity invested €12 million in Power Plus Communications (PPC), a German broadband powerline communications company. The funding will allow PPC to expand in Europe and the Middle East, and will help Siemens and British Gas strengthen their portfolio in smart grid technologies. PPC's technology uses broadband powerline communications for applications like distribution network monitoring and smart metering.

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53 views

Siemens, British Gas Invest in Broadband-Over-Powerline Company For Smart Grid

Siemens, British Gas, and existing investor Climate Change Capital Private Equity invested €12 million in Power Plus Communications (PPC), a German broadband powerline communications company. The funding will allow PPC to expand in Europe and the Middle East, and will help Siemens and British Gas strengthen their portfolio in smart grid technologies. PPC's technology uses broadband powerline communications for applications like distribution network monitoring and smart metering.

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mebibeg
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© © All Rights Reserved
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Siemens, British Gas Invest in Broadband-Over-Powerline Company for Smart Grid

Power Plus Communications gets 12M ($15M) from some major players.
Katherine Tweed: June 21, 2012
As the smart grid market heats up in Europe, major players are beefing up their investments in
smart grid companies that will deliver everything from distribution automation to data center
efficiency.

The latest recipient is Power Plus Communications, a German broadband powerline


communications company. Earlier this week, PPC raised 12 million ($15 million) in a funding
round by Siemens Financial Services' Venture Capital unit, British Gas and existing investor
Climate Change Capital Private Equity.

The money will be used to expand PPC's market growth in Europe and the Middle East, where it
already has a toehold. For Siemens and British Gas, the investment allows them to strengthen
their portfolio in one of the primary communications used across Europe. The Mannheim-based
company was founded in 2001 and raised 10M ($12.7M) in 2008 from Climate Change Capital
Private Equity.

This is the only European company we know of that really has a system that works on
powerline with broadband communication, said Bruno Derungs, a partner in Climate Change
Capital Private Equity Fund and a member of PPCs supervisory board. While there are plenty of
PLC companies in Europe, most of them use some version of narrowband, rather than true IPbased broadband.

The technology will primarily be used for two applications: real-time communications in the
distribution network for maintaining low- and medium-voltage control applications and smart
metering to bring data from the meter back to the utility. GTM Research forecasts 6.8 billion
($8.5 billion) per year in smart grid investment in Europe between now and 2016, with the bulk
of the investment going to smart metering and distribution automation.

PPC is also a member of the HomePlug Alliance and can reach into the home for demand side
management. Derungs noted that the IP-based technology allows PPC to go a step beyond
HomePlug and build a mesh network within the home.

In Germany, new rules around smart grid data security will require companies to work off
standards-based encryption, which can be constantly upgraded. Derungs said many PLC
companies currently cannot meet the new rules because of proprietary systems.

In Europe, the competition for PPC is coming from telecoms, which also offer broadband or
DSL, rather than PLC standards such as the PRIME Alliance. For the German [smart grid]
market, we only see broadband powerline or a DSL/fiber, which are both much more expensive,
said Derungs. Deutsche Telecom, for instance, is already partnering with ABB to provide smart
grid solutions and is working with home management company AlertMe to offer energy
management services in the home.

Although Siemens is headquartered in Europe, one of its largest applications of PPC's technology
is in Qatar. Siemens is providing smart grid solutions for Doha, the capital of Qatar, including
smart metering and meter data management. PPC will be used to connect the city's transformer
substations. Overall, Qatar is reportedly spending $60 billion in infrastructure upgrades in
preparation for the 2022 World Cup.

Many PLC companies are using narrowband, but there are companies using broadband over
powerline. IBM and International Broadband Electric Communications have brought broadband
service to 20,000 of the 340,000 rural American homes. Current, which is based in Germantown,
Md., also offers broadband over powerline, and most of its business is coming from Europe.

Currently, PPC works with various European utilities, including MVV Energie AG, Stadtwerke
Dusseldorf, DEW21 and Stadwerke Ratingen.

Derungs said that Germany, U.K. and Middle East are the primary growth markets, with some
attention on Eastern Europe as well. Eventually, fiber will make broadband obsolete, but not
anytime soon, leaving plenty of opportunity for broadband as smart grid applications evolve and
require more bandwidth. I doubt the whole world will have fiber-to-the-home in the next 20
years, said Derungs.

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