Energy Australia taps IBM for $3M smart grid project

Australia's largest electricity distribution network said today it signed a AU$3.2 million (US$2.2 million) deal with Armonk, N.Y.-based IBM (NYSE:IBM) as part of an upgrade to the country's electric grid.

EnergyAustralia launched a $170 million project in 2006 to rollout a smart network using 12,000 fiber optic sensing devices throughout the distribution network. Under the contract signed this quarter, IBM plans to design and build the IT architecture to connect those sensors with EnergyAustralia's operating system. 

The utility said the smart-grid upgrades are expected to reduce outages, manage distributed renewable energy sources, and improve efficiency of energy distribution.

"This project will help us stay at the forefront of the global intelligent network transformation," EnergyAustralia's Managing Director George Maltabarow said in a news release. "It will give us an instant picture of the electricity network which will help shorten power interruptions by allowing us to quickly locate and repair faults." 

EnergyAustralia says it was the first utility in the world to incorporate Internet Protocol technology for its network. The utility provides power to 1.4 million homes and businesses.

IBM says the IP framework is an essential standard platform for establishing a smart grid (see IBM rides third wave of cleantech). IBM says it is now working on more than 50 smart grid projects across the world.

Shares of IBM were up 3.5 percent to $98.84 in mid-afternoon trading.