Echelon Corporation, a provider of energy control networking for the smart grid, and Holley Metering Limited, a smart metering vendor in China, on Tuesday announced an agreement under which the two companies will form a new joint venture company in China, Zhejiang Echelon-Holley Technology Co., Ltd. (Echelon-Holley), to focus on the development and sales of advanced smart metering products for China.
Echelon (San Jose, Calif., USA) and Holley (Hangzhou, China) originally entered into a commercial agreement in August or 2011 under which the two companies collaborated on the development of advanced smart metering products, says Varun Nagaraj, senior vice president of product management and product marketing. Since the initial agreement, Echelon and Holley have been working on technology pilots in China and has initiated the approvals process for wider deployment.
“With today’s announcement, the two companies are expanding on this existing commercial relationship," says Nagaraj. “The JV will sell its products to other meter companies in China (other than Holley), allowing Echelon to address a larger piece of the China market.”
The new company will be headquartered in Hangzhou, China , and will develop advanced smart metering and related services. The partnership will leverage Echelon's Silicon Valley energy control networking innovation center and its experience in power line control and communications hardware and software platforms for smart grid applications, and Holley Metering's metering services, manufacturing competencies and customer relationships, says the two companies. The joint venture is majority owned by Echelon. Echelon and Holley Metering will both contribute cash and resources into the new company.
"With a mandate to connect 300 million homes and businesses to the smart grid over the next five years, Chinese utilities will need to leverage the best the world has to offer," said Ron Sege, chairman and CEO of Echelon.
The Echelon-Holley joint venture is expected to be operational in Q3 2012. The original commercial agreement between Echelon and Holley will continue in place until the projects thereunder are completed and/or are transferred to the joint venture.
“We recognized China to be an important source of growth for Echelon  and entered into a partnership with Holley Metering last August as a first step in going after the opportunity in China,” says Nagaraj. “We chose Holley because, for nearly 40 years, it has been shipping electricity and gas meters into the State Grid Corporation of China -- which represents 88% of the national territory and serves a population of over 1 billion -- and China Southern Power Grid, which covers a population of 230 million. The opportunity alone in China is significant.”