IBM is opening a multi-million dollar lab to develop technologies for China’s burgeoning smart grid market.

Technology giants including Google Inc, Cisco and Microsoft are investing heavily in smart grids, intelligent power-distribution systems designed to be more responsive and interactive than today’s traditional power grids.

In terms of countries, China, the world’s biggest greenhouse-gas emitter, is investing the most. Beijing plans to invest USD 7.3 billion in smart grid projects in 2010, more than the United States, according to Zpryme, a market research firm in Austin, Texas.

China is far behind the United States and Japan in terms of its smart grid development.

“China is pursuing smart grids as aggressively or more aggressively than any other country in the world right now,” Brad Gammons, vice-president of IBM’s Global Energy & Utilities Industry, told Reuters in an embargoed interview last week.

“They’re very focused and have a very strong commitment to move in that direction,” he said.

IBM — which counts State Grid Corp. of China, the nation’s leading power grid operator, as one of its customers — unveiled its Energy & Utilities Solutions Lab in Beijing this week.

Smart grids include computerised monitoring of the electricity flowing though a power grid and allow utilities to manage electricity usage automatically.

IBM’s products span the range of smart grid systems, including the automation of power stations and electricity distribution networks with the use of digital sensors and communication networks.
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Technology giant IBM is expanding its green business by partnering with battery maker and building automation company Johnson Controls Johnson Controls Inc to offer services that will help in cutting energy and water use in buildings.

The two companies said on Monday that they have launched an initiative that combines IBM’s business analytics software with Johnson Controls’ building and energy efficiency tools.

Currently about 40 percent of U.S. energy use goes toward the heating, cooling and general operation of buildings.

IBM estimates that the information technology part of the green buildings market will grow from $3 billion in 2010 to $6 billion or more in 2015, Rich Lechner, IBM’s vice president of energy & environment, said in an interview.

“There is a huge opportunity in retrofitting buildings,” he said.

Also, more incentives are being offered worldwide by governments and utilities to encourage energy efficiency.

“Over 200 incentives across the United States are being offered, which can have a substantive impact in terms of reducing the cost of the investment,” Lechner said. “The opportunity is anywhere from 30 percent to 40 percent reduction in energy usage.”
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