Silver Spring corrals currents in Australian smart grid

Redwood City, Calif.-based Silver Spring Networks plans to begin roll-out Sept. 1 of its first international deployment of smart grid technology, the company told the Cleantech Group today.

Two utilities in Australia signed on for smart meter technology for all of their 1 million customers in the province of Victoria. Financial terms were not disclosed.

Jemena Electricity Networks and United Energy Distribution are responding to government mandates for advanced metering infrastructure, said Eric Dresselhuys, vice president at Silver Spring.

"Australia is a country that is very progressive in cleantech and carbon policies, so it's not surprising the Australian government has a very progressive world view with smart grid as well," he told the Cleantech Group.

The announcement comes just six months after Dresselhuys told the Cleantech Group that the company's most recent funding round would kick off an international expansion, especially in Australia (see Smart grid tech draws $75M for global expansion). 

Silver Spring recently added funds to that round, which closed at $90 million and brought total funding to $146 million (see Fire sale continues for some cleantech firms).

Google (Nasdaq: GOOG) recently established a new venture capital fund, Google Ventures, which is said to have contributed to Silver Spring's most recent close (see Google admits VC rumors). Dresselhuys declined to comment on Google Ventures' investment.

The U.S. leads the world in utilities adopting smart grid technology. There are about 100 million electric meters in the U.S., and at least half are in communities that say they are interested in deploying smart grid technology (see Smart grid could be early winner in U.S. stimulus package).

In addition, U.S. companies have dominated the field of smart grid technology providers. Smart grid technology raised an all-time high of $202 million in venture capital in the third quarter of 2008, led by a $120 million round by by GridPoint (see Cleantech investment breaks all-time record).

"The U.S. has been the leader in smart grid technology innovations and policy, but I suspect everyone else is not far behind," Dresselhuys said. "Utilities as a group are interested in what's proven to work, so the experience and demonstrated success in North America has helped utilities in other regions see world-class technology at work."

California utility Pacific Gas & Electric is leading the North American market, with 2.3 smart meters for electric and gas installed, according to a new survey out today from the Energy Retail Association of Britain. Silver Spring is working with PG&E to provide technology for the smart electric meters that began shipping in October (see Startups get big help from Big Blue).

One of Silver Spring's other major projects underway has deployed 100,000 smart meters on an IP-based network for Florida Power & Light customers. That project is scheduled to expand to a broader service territory in the third or fourth quarter.

Dresselhuys said he expects the project in Australia to be the first of many international deals for the startup, which has two of the best-known partners from Kleiner Perkins Caufield & Byers on its advisory board: John Doerr and former U.S. Vice President Al Gore (see Iceland takes a hit). 

"Smart grid really is an international business, and there's a great amount of interest worldwide in using smart grid technology to improve the efficiency of the grid," Dresselhuys said. The U.S. electric grid loses roughly 7 percent of energy production through faulty transmission lines, theft and mechanical problems.

Silver Spring plans to provide the network, hardware and software to support the smart meters being deployed by Winchester, UK-based PRI. Consulting firm Accenture is providing back-office integration work.

In a joint announcement today, Silver Spring said it has formed a partnership with PRI. Under the deal, PRI's meters will use Silver Spring's network interface cards to enable IP-based communications.

"This is starting as a smart metering project that will provide home connections for demand response, but I think over time you'll see distribution automation or distribution control being added," Dresselhuys said. "What we're all about is building the network to allow the utilities to do those things when they want to do them."

Silver Spring is working with IBM (NYSE: IBM), eMeter, SynapSense, and other cleantech companies to encourage lawmakers to establish an IP standard for smart grid technology (see IBM rides third wave of cleantech).