Opportunity Abounds as Washington Builds the Modern Electricity Grid
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an already strong reputation in grid modernization technologies. Established companies such as Itron (NASDAQ: ITRI), based outside of Spokane, is among the world’s largest makers of smart meters, which give utilities a real-time view of energy consumption, rather than estimating usage based on monthly reads of analog meters—a key unit in the bigger grid modernization picture. (Seattle City Light selected Itron competitor Landis+Gyr for the 420,000 smart meters it plans to install across its service area by the end of next year.) Grid technologies maker Schweitzer Engineering Laboratories, whose facilities in Pullman, WA, host one of the state’s early CEF-funded storage projects, is a household name in the industry. Newer companies have landed on the map for energy storage innovation, too, with a string of significant international investments and M&A deals during the last two years adding further momentum.
Grid modernization M&A in Washington
“When you get [large international companies] either investing or buying up your technology, that really gets people’s attention,” Young says, adding that the Department of Commerce has recently hosted foreign investor delegations from China, Japan, South Korea, Germany, and Italy.
To continue the momentum, the American Jobs Project report suggests more of what Washington is doing already: It calls for a strengthened foreign direct investment strategy; improved small business access to university and national lab resources (which both of the state’s flagship research universities and PNNL already provide); and incentives for utility innovation, such as the CEF.
The report also calls for tax incentives for companies in the grid modernization industry, and more opportunities for high school students to connect with careers in grid modernization.
The state also needs to cultivate a new crop of startups in this sector—one that’s notoriously difficult for young companies because of the inherent conservatism of utility customers and typically long sales cycles for anything that attaches to the electrical grid. There are significant efforts afoot here, with new incubators, seasoned entrepreneurs launching second or third ventures in the industry, and specialized investors focused on the space—though never quite enough of the latter. (Xconomy will explore the next generation in a subsequent story later this year. We’re collecting data on startups and established companies in energy storage and grid modernization in the Pacific Northwest. Please send an e-mail to firstname.lastname@example.org to make sure you’re on our radar.)
In the meantime, work on Horn Rapids progresses with construction expected to start early next year. When it’s complete, Washington will have, in a single project, an end-to-end pipeline to further develop grid modernization expertise.