Echelon Corporation (NASDAQ:ELON)
today unveiled the
Echelon Control System (ECoS), a new open software platform for
intelligent distributed control of the smart grid. The announcement was
made at a special event in New York City. ECoS will run throughout the
edge of the grid on the
new Edge Control Node (ECN) 7000 series of open and extensible
hardware solutions. Echelon also announced
today that Duke Energy will be the first customer for the ECoS.
Announcement & Platform
Q: What are we announcing?
A: We are announcing the Echelon Control System (ECoS) software platform
and the first ECoS powered products, the Edge Control Node (ECN) 7000
series of extensible hardware products. This open-standard
software/hardware combination brings intelligent distributed control to
the edge of the grid, which enables a more responsive, reliable,
automated, self-healing and intelligent power grid.
We are also announcing our first ECN 7000 series customer, Duke Energy,
which has placed a large ($14.5M+) order for the ECN 7000 series
products.
Q: What is intelligent distributed control?
A: Intelligent distributed control distributes sensing and control
through the grid. There is no single point of decision making, and
therefore there is no single point of failure. Decisions are made closer
to the point of control, for more rapid response time and increased
reliability with decreased communications cost.
Q: Why is intelligent distributed control needed?
Intelligent distributed control delivers the needed response time;
Intelligent distributed control enhances system survivability;
Intelligent distributed control increases reliability;and,
Intelligent distributed control lowers cost.
Q: What is ECoS?
A: ECoS is an open and secure application framework, including a
software development kit and management tools, that enables intelligent
distributed control at the edge of the network. In the ECN 7000, ECoS
provides a set of core services, along with built-in ECoS apps, that
provide the software infrastructure necessary to support multiple apps
running cooperatively to monitor and control devices to implement smart
grid applications.
Q: Is ECoS an operating system?
A: ECoS is more than an operating system. It is a set of tools and
services that provide a framework that makes it easy to develop powerful
applications for intelligent distributed control. By way of analogy,
ECoS is to the smart grid what Android is to smart phones. Android
provides an open and secure software framework, built on Linux, which
provides a set of services and supporting tools to simplify development
of smart phone apps. Similarly, ECoS provides an open and secure
software framework, built on Linux, which provides a set of services
with supporting tools to simplify development of smart grid apps.
Q: Why is ECoS important?
A: Just as application frameworks have transformed the smart phone
market by creating an explosion of applications and innovation, we
expect ECoS to do the same for the smart grid market. The ECoS platform
enables utilities and their partners to quickly build ECoS apps that
allows utilities to meet next generation demand response challenges,
optimize local grid efficiency, predict power outages before they occur
and rapidly restore service, and implement other smart grid services.
For example, an ECoS app might monitor power quality and line signal
strength and look for anomalies like voltage fluctuations to give
utilities the potential to see where their next outage may strike and
take corrective action before it occurs.
Q: What is the ECN 7000 series of hardware products?
A: The ECN 7000 series are an open and extensible series of hardware
products designed for the smart grid. The ECN 7000s are the first
ECoS-powered products. We are announcing two members of the series today
one with ruggedized packaging for use outdoors on the side of a
pad-mount transformer or on a utility pole, and another for indoor use.
Powered by ECoS, the ECN 7000 brings the power of intelligent
distributed control to the edge of the grid to enable a more responsive,
reliable, automated, self-healing and intelligent grid. They are
important new additions to Echelons Networked Energy Services (NES)
System.
Q: What do you mean when you say the ECN 7000 series of
products is open and extensible?
A: The ECN 7000 series products provide open, published interfaces to
allow third parties to develop additional hardware and software options.
The interfaces are completely open, meaning that they are available
without licensing restrictions. With these open interfaces we look to
foster a community of hardware developers creating peripheral cards to
connect to the myriad of devices found in the field, as well as software
developers creating new and innovative ECoS apps for the smart grid. For
example, a third party can build an option board and software driver to
connect to an advanced metering infrastructure (AMI) network and make
AMI data available to ECoS apps.
Q: Why are the ECN 7000 series products important?
A: A key piece of the puzzle has been missing that prevents the full
promise of the smart grid. That missing piece has been a point of
intelligence at the edge of the grid. By distributing intelligent
control into the grid at the low voltage transformer, ECoS and the ECN
7000 series products will raise system reliability and survivability to
the next level by eliminating central points of failure and
vulnerability. ECoS will deliver the near real-time response utilities
need to increase efficiency, create balance and increase control at the
edge of the grid.
Q: What is the difference between ECoS and the ECN 7000 series
products?
A: ECoS is the software platform that runs on the ECN 7000 series
products. By way of analogy, just as Android powers Droid phones, ECoS
powers Edge Control Nodes.
Q: What do you mean by the edge of the grid?
A: The edge of the grid is also sometimes referred to as the last mile
of the distribution grid. It is the critical point where the electricity
distribution network connects to customers.
Q: Why is the edge of the grid important?
A: The edge of the grid is important because demands on it are changing
dramatically. At the same time, the design of the grid has not changed
since Edisons and Westinghouses days in the late 1800s.
Governmental policy is changing the nature of supply;
Customer behavior is driving dramatic changes at the edge of the grid;
Economic and national security concerns make grid reliability and
survivability more critical than ever; and
Worldwide demands for electricity are growing; we need to be more
efficient going forward.
Q: Why is Echelon the right company to bring this platform to
the industry?
A: Echelon has 20 years of proven, trusted and unmatched experience in
control networking and software innovation. This experience has given us
unique insight and the skills needed to create the infrastructure needed
to meet the needs of the smart grid:
Robust & reliable with no single point of failure and local
intelligence, Echelon systems offer predictive intelligence and
resilience in the face of failure;
Scalable from a handful of nodes to tens of millions of nodes;
Interoperable products and applications from multiple suppliers that
work together; and,
Adaptive control systems are long lived, but the world around them
is evolving at a pace like never before. Echelon has experience
architecting systems that work with new technologies as they arise
without the need to replace devices previously installed. The smart
grid cannot undergo a rip and replace upgrade cycle every few years.
It must be able to absorb new technologies as they emerge.
And, weve enabled this in a way that is easy for developers to create
devices and easy for end-users to install, manage, and maintain.
Q: How is the smart grid different from smart meters?
A: The smart grid is broader than smart metering. Smart meters are just
a single application within the smart grid. Different people use the
term smart meter to refer to different things, but in general smart
meters have been thought of as the way to help balance supply and demand
by implementing time-of-use billing, which means the cost of energy to
consumers changes as the price of energy changes to utilities, and by
giving consumers a view of their consumption pattern over the day so
they can adjust their behavior to reduce or shift load.
The smart grid goes beyond the meter to provide a broader set of
services that increase reliability, survivability and responsiveness of
the grid. With a smart grid utilities can meet next generation demand
response challenges, optimize local grid efficiency, predict power
outages before they occur and rapidly restore service, and implement
other services. Unlike most smart meters, Echelons NES meters go beyond
basic billing and provide essential information about the health and
status of the grid required to build many smart grid applications.
Q: To what extent is the ECoS software based on open-source
operating systems, drivers, etc?
A: ECoS is built on top of the Linux operating system. ECoS apps are
built using Eclipse, the worlds most widely used open source embedded
software development tool.
Q: What security measures are included in ECoS? I have heard a
lot about the vulnerability of the grid to hackers.
A: Ensuring world-class security was fundamental to the design of ECoS
and the ECN 7000 series.Security is integrated throughout; from
physical security measures such as anti-tamper screws used to secure the
ECN 7000 enclosure; to a tamper detect sensor within the ECN 7000 which
is monitored whether the ECN is powered up or not; to embedded GPS
location awareness to detect if the ECN 7000 was moved; to SSL
connection support, 128-bit encryptionwith protection against
record/playback attacks, strong authentication, firewall protection,
802.11X security, access control lists, denial of service attack
prevention; and other measures built into the ECoS software.
Product
Q: What is the NES System?
A: Echelons Networked Energy Services (NES) system is an open platform
for the smart grid that provides access to smart devices via a Web
services based network operating system over an IP networking
infrastructure. At the enterprise, the NES system software the network
operating system for the smart grid provides scalable, secure web
services to collect information from, manage, and control millions of
devices in the field. Edge devices in the NES system include NES data
concentrators, which provide monitoring, control, and management
services for devices connected to the low voltage power grid, and ECN
7000s, which enable any device, speaking any protocol, connected over
any network to be integrated into the system. In the field, the NES
system enables smart devices to use the low voltage power grid as a
reliable and secure network. Going beyond basic AMI functions such as
time of use billing, NES meters offer a wealth of information related to
the status and health of the grid, including reactive power, voltage,
phase current, power factor, frequency and total harmonic distortion. In
addition, NES meters, working in concert with the NES Data Concentrator
or the ECoS NES Data Concentrator app, provide an automatic topology
management service that maps out the connection between meters and low
voltage transformers. This information is a critical component of
next-generation demand response and micro grid distribution automation
applications.
Q: How does the ECN 7000 series extend the capabilities of the
NES System?
A: The ECN 7000 series uses ECoS, running Echelon and third party
applications, to extend the reach and power of the NES system to include
not only devices connected directly to the low voltage grid but also
others devices, speaking other protocols, connected over other media.
With the ECN 7000, information for any device, speaking any protocol,
over any media can be integrated into local decision making and
enterprise applications, creating a broader market opportunity for
Echelon and its partners and a richer set of capabilities for utilities.
Q: Do the ECN 7000 series products replace NES Data
Concentrators?
A: No. NES Data Concentrators will continue to be offered and are an
ideal solution for utilities looking to deploy a smart grid or smart
meter system that leverages the low voltage distribution network to
reduce cost and improve operating efficiency. For utilities looking to
incorporate information from other devices into their smart grid
applications, or to run the wide range of third party apps that will be
available, the ECN 7000 series extends the reach of the NES system to
include not only devices connected directly to the low voltage grid but
also others devices, speaking other protocols, connected over other
media. One of the core services provided by the ECoS platform is an NES
Data Concentrator service, which enables ECN 7000 series products and
NES data concentrators to be mixed and matched in the same system to
enable utilities to add support for additional connected devices and the
distributed control capabilities of ECoS apps, where appropriate.
Q: Does the open connectivity of ECoS and the ECN 7000 series
products mean that an NES system might not contain any NES meters from
Echelon?
A: Thats right; a deployed NES system might not contain any NES meters
from Echelon and might in fact not contain any meters at all. The NES
System was designed from day one to provide the core of the smart grid
and to not just be a simple AMI system. The name NES Network Energy
Services was intended to convey this idea. The NES System has always
been about building out a network of smart devices that work together to
provide variety of services related to energy, that is, to deliver what
has now come to be commonly referred to as the smart grid. NES meters
were the first and most common device connected to the NES System but
need not be the only device connected. There is tremendous value in
intelligent distributed control at the transformer to optimize grid
efficiency, predict power outages before they occur, automatically
restore service, meet future micro-distribution challenges, and
implement other smart grid services that goes far beyond smart meters.
However, while NES meters are not a required part of the system, they do
offer tremendous value and important information beyond basic AMI
functions such as time of use billing. NES meters offer a wealth of
information related to the status and health of the grid, including
reactive power, voltage, phase current, power factor, frequency and
total harmonic distortion. In addition, NES meters, working in concert
with the ECoS NES Data Concentrator app, provide an automatic topology
management service that maps out the connection between meters and low
voltage transformers. This information is a critical component of
next-generation demand response and micro grid distribution automation
applications.
Q: Do the ECN 7000 series products work with third-party
meters?
A: Yes; the ECN 7000 series products and ECoS platform are completely
open. The ECN 7000 series products include built-in support for NES
meters as well as optional capability to collect AMR data from Badger
gas meters or other 900 MHz RF AMR systems. In addition, the ECN 7000
series products provide open, published hardware and software interfaces
to allow third parties to integrate any type of network or meter into
ECN products and ECoS platform. These other meters can be managed by
ECoS apps and expose all their information and control capability to
other ECoS apps, to existing enterprise systems, or through the NES
system software.
Q: Why would someone want to integrate an existing AMR meter
into the ECN?
A: Many utilities have AMR meters that are not yet fully depreciated and
therefore will not be replaced in the near term. For some utilities this
presents a significant hurdle in creating a business case for a smart
grid project. Integrating AMR meters through the ECN 7000 series
products provides a number of benefits. Through ECoS, the ECN 7000
series products and NES system software provides utilities the ability
to build a scalable and secure fixed network that eliminates the need
for manual data collection and enables them to incrementally replace AMR
meters as they wear out with NES meters or AMI meters. In addition, the
consumption data collected from AMR meters can be made available within
the ECN to other ECoS apps for use within their calculations and to home
energy management systems for consumer use.
Q: Why would someone want to integrate an existing AMI meter
into the ECN?
A: In AMI systems the data produced by the AMI meter is transported to
the head-end for bill preparation or perhaps displayed to homeowners but
is not available to make local decisions at the edge of the grid.
Integrating AMI meters into the ECN 7000 enables ECoS apps to take
whatever data is available from these meters and use it as part of the
apps control algorithms. Through the ECN 7000 and ECoS, AMI meters can
become participants in smart grid control decisions. For example, if the
AMI meters provide voltage, that can be used as part of a voltage
optimization algorithm along with cap bank control.
Q: Why would someone want to use NES meters with the NES
system if they can use any smart meter?
A: NES meters offer what we believe is an unmatched set of capabilities
to utilities looking to deliver smart grid benefits to their customers.
Most smart meters only offer AMI functions such as time of use billing.
NES meters not only offer AMI functions, but also a wealth of
information related to the status and health of the grid, including
reactive power, voltage, phase current, power factor, frequency and
total harmonic distortion at a price point competitive with smart meters
that only offer AMI functionality. In addition, NES meters, working in
concert with the ECoS NES Data Concentrator app, provide an automatic
topology management service that maps out the connection between
meters and low voltage transformers. This information is a critical
component of next-generation demand response and micro grid distribution
automation applications. NES meters are and remain a very important
offering within the NES system and are very successful in the
marketplace.
Q: Do the ECN 7000 series products work with non power line
products?
A: Absolutely. The ECN 7000 series products includes a variety of
standard and optional RF, wired, and power line interfaces. In addition,
the ECN 7000 series products provide open, published hardware and
software interfaces to allow third parties to integrate any type of
network into the ECN product and ECoS platform.
However, use of the low voltage power line provides the ECN 7000 with
critical information required by utilities to effectively implement
next-generation demand response and micro grid distribution automation
applications. The ECoS NES Data Concentrator app, working in concert
with NES devices and meters on the low voltage power line, provides an
automatic topology management service that maps out the connection
between meters and low voltage transformers, something that RF systems
cannot do since they bypass the grid.
Q: Where do ECoS and the ECN 7000 series products fit relative
to Echelons LonWorks infrastructure product
line?
A: ECoS is an enabling software infrastructure for building intelligent
distributed control applications that interact with any device, using
any protocol, over any media, including, but not limited to, LonWorks
networks. The LonWorks platform enables rapid development of a wide
range of smart devices that work together cooperatively in control
networks to improve operating efficiency and reduce life cycle costs.
ECoS sits the next level up in the control system hierarchy. ECoS can
interface to LonWorks networks, and other types of device networks, as
well as to non-networked devices. With ECoS, data is presented in one
common framework one language allowing developers to write apps
without needing to know anything about the underlying networks. ECoS
breaks down the barriers between devices, networks, and applications to
speed development and foster innovation.
Q: Where do ECoS and the ECN 7000 series products fit relative to
Echelons i.LON SmartServer products?
A: ECoS leverages SmartServer and other core Echelon technologies and
applies them to the unique needs of the smart grid.
Q: Do the ECN 7000 series products replace the Echelon
SmartServer products in commercial demand response applications?
A: No. The ECN 7000 series product announced today is targeted at
utility smart grid applications.
Q: Do the ECN 7000 series products replace the Echelon
SmartServer products in intelligent street lighting applications?
A: No. The SmartServer will continue to be an ideal solution for cities
looking to manage street lighting costs and for utilities where street
lights are served by dedicated distribution transformers. For utilities
that provide managed street light services and have street lights
intermixed with residential customers on the same transformer, the ECN
7000 series with an appropriate ECoS app represents a very
cost-effective way to add intelligent street lighting services.
Q: Will the SmartServer be powered by ECoS in the future?
A: We are not announcing any new SmartServer products at this time.
Utilities and Third-Party Developers
Q: Are ECoS and the ECN 7000 series products a custom
development done for Duke Energy?
A: No. ECoS and the ECN 7000 series products is the result of almost 10
years of experience in the smart grid market with input from customers
and partners around the globe, including Duke Energy.
Q: Do you have customers for the ECN 7000 series products
other than Duke Energy?
A: Today we are announcing Duke Energy as our first customer. We have
recently begun presenting the product to other utilities and partners
and we are very pleased with the positive response thus far. We are not
announcing any additional customers at this time.
Q: Are European customers interested in the ECN 7000 series
products?
A: Very much so. Utilities around the world are all experiencing
similar, new demands being placed upon their grids. As demonstrated by
the support and participation of some key European utilities in our ECoS
platform and ECN product launch today, it is clear that the need for
intelligent distributed control at the edge of the grid and the
solutions enabled by the ECoS platform and the ECN 7000 series products
have global applicability.
Q: What kind of partners are you targeting?
A: Having an intelligent point of monitoring and control at the
distribution transformer is an incredibly valuable resource and a key
requirement for many sorts of applications. We have already had
discussions with a wide range of companies offering products and
applications to make the grid smart, more efficient, and more reliable
and have received overwhelming enthusiastic response.
ECoS and the ECN 7000 series products provide a single platform that
enables multiple applications from multiple vendors to work together to
deliver a smarter grid.
There are a wide variety of devices and applications that can benefit
from ECoS and the ECN 7000 series products that are natural partners for
us to work with:
Distribution management systems (DMA), distribution automation (DA)
and supervisory control and data acquisition (SCADA) providers. ECoS
and the ECN 7000 series products allow them to reach deeper into the
grid and have access to more fine-grained information;
Software companies. ECoS and the ECN 7000 series products represent an
opportunity for software providers to distribute and embed analytics
within the grid;
Grid equipment manufacturers (transformers, capacitor banks,
reclosers, medium voltage sensors, etc.) ECoS and the ECN 7000 series
products give them a platform to monitor and manage their products and
integrate data and control capabilities to deliver a variety of
applications;
Demand response providers. ECoS and the ECN 7000 series products
provide them the ideal location to implement next generation demand
response apps that take into account the interaction across homes and
devices on the transformer to provide maximum protection to the grid
with minimal impact to customers;
In-home devices and systems. ECoS and the ECN 7000 series products
provide a single point of intelligence for interacting with various
devices and controllers in the home and around the low voltage grid;
Electrical vehicles and chargers. ECoS and the ECN 7000 series
products give electrical vehicle chargers access to data they need, at
the right point in the grid, to enable them to intelligently manage
changing to prevent overloading the low voltage grid;
Street lighting and municipal services. By providing a single platform
for multiple applications, ECoS and the ECN 7000 series products
change the cost equation for deploying intelligent street light
applications or deploying other distributed sensors as part of a smart
city. These systems no longer need to deploy their own dedicated
infrastructure but can instead be deployed incrementally with smart
devices and ECoS apps; and,
System integrators and application developers. By breaking down the
barriers between devices and systems and making all data available in
a common format, ECoS and the ECN 7000 creates a platform for
innovation on the smart grid just as application frameworks have done
for smart phones.
There are many other potential applications and partners as well. We
plan to aggressively expand this ecosystem of partners to further
broaden our application solutions and provide greater value to our
customers.
Q: When will the ECOS toolkit be ready to enable developers to
start writing applications?
A: We have begun to work with an initial set of application developers
and intend to roll the program out more broadly by the end of the year.
Q: What is the cost of the ECoS SDK?
A: Nothing. Echelon is providing the ECoS SDK free of charge. To further
promote productivity and innovation, our SDK is built on top of Eclipse,
the worlds most widely used open development platform.
Q: Are there any licensing restrictions, fee, or royalties?
A: No. ECoS and the ECN 7000 series products are entirely open.
Q: What kind of developer support will Echelon offer?
A: Echelon intends to offer a broad range of training and support
programs.
Pricing and Availability
Q: When is the ECN 7000 series shipping?
A: Field trial units are expected to ship in late 2010. Production
shipments are targeted to begin in mid-2011.
Q: Why did you introduce this product in advance of the
general availability date?
A: Two reasons: First, the power of ECoS is the ecosystem of partners it
enables. We want to start working with partners now so we have many ECoS
apps available at shipment time. Second, the decision-making and
evaluation process within utilities is a long cycle. Many utilities and
their regulators are beginning to move their focus beyond billing and
AMI onto building a more reliable, robust, and responsive smart grid. As
such, we believe the time to introduce ECoS and the ECN 7000 series of
products is now so that we can take part in those discussions today.
Q: What about pricing?
A: We are not publically announcing pricing at this time.
Financials
Q: How does this announcement change guidance?
A: It does not, since we only give quarterly guidance, and revenues will
begin in late 2011.
Q: What gross margins are you expecting?
A: We are not disclosing this information at this time.
Duke Order
Q: How large is the Duke order?
A: The initial order, excluding optional ECN peripherals, is for
approximately $14.5 million.
Q: What does the phrase, excluding optional ECN peripherals
mean?
A: Depending upon where it will be located, each ECN 7000 will be
equipped with additional peripherals, such as EVDO modems for cellular
communication, Wi-Fi for connection to wireless devices and other nearby
ECN 7000s, mounting brackets for pole or pad mounting, etc. The exact
mix of ECN peripherals that will be required is not known at this time
and they will therefore be ordered at a later date.
Q: How many units are in the Duke order?
A: We are not disclosing the quantity of units.
Q: What is the timing of the order?
A: Shipments of ECN field trial units are expected to begin by the end
of 2010. Shipments of production units are targeted for the second half
of 2011. All deliveries under the initial order are expected to be
completed by the middle of 2013.
Q: What does it mean that this order is under the existing
long-term supply agreement?
A: The long-term supply agreement entered into between Duke Energy and
Echelon in August of 2009 gives Duke Energy the right to purchase
products for all of the territories it serves. This means that they also
have the right to buy the ECN 7000 for all of these territories. Duke
Energy currently provides electricity service to approximately four
million customers in five states North Carolina, South Carolina,
Indiana, Ohio and Kentucky.
About Echelon Corporation
Echelon Corporation (NASDAQ:
ELON)
is leading the worldwide transformation of the electricity grid into a
smart, communicating energy network, connecting utilities to their
customers, enabling networking of everyday devices, and providing
customers with energy aware homes and businesses that react to
conditions on the grid.
Echelons NES System the control networking infrastructure for the
smart grid enables intelligent distributed control applications and
devices that deliver maximum reliability, survivability and
responsiveness. Through the ECoS platform, the NES system enables any
device, speaking any protocol, connected over any network to be
integrated into local decision making and connected securely to
enterprise IT systems through virtually any IP network. The NES System
helps utilities compete more effectively, reduce operating costs,
provide expanded services and help energy users manage and reduce
overall energy use.
Echelons LonWorks Infrastructure products extend the smart
grid in to smart buildings factories, homes and other systems, powering
tens of millions of energy aware, everyday devices made by thousands of
companies connecting them to each other, to the electricity grid and
to the Internet. LonWorks based products work together to monitor and
save energy; lower costs; improve productivity; and enhance service,
quality, safety, and convenience in utility, municipal, building,
industrial, transportation, and home area networks.
More information about Echelon can be found at http://www.echelon.com.
Echelon, i.LON, LonWorks, and the Echelon logo are registered trademarks
of Echelon Corporation registered in the United States and other
countries. Other product or service names mentioned herein are the
trademarks of their respective owners.
This press release may contain statements relating to future plans,
events or performance. Such statements may involve risks and
uncertainties, including risks associated with uncertainties pertaining
to market acceptance of the Edge Control Node, including the ECoS
Software, and the timing and level of orders from Duke Energy as well as
other customers; risks that Edge Control Node, including the ECoS
Software, does not perform as designed and that liability may accrue as
a result; the risk that third parties will not become interested in
developing ECoS apps for the Edge Control Node that would expand the
market for this product; and other risks identified in Echelons SEC
filings. Actual results, events and performance may differ materially.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
Echelon undertakes no obligation to release publicly the result of any
revisions to these forward-looking statements that may be made to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.

Source: Business Wire