ZTE’s partnership with Atos confirms ZTE’s commitment to smart grids in China. ZTE has been pursuing the smart grid market in China with vigor - after all, the market opportunity is huge, with an estimated 450 million homes in China, let alone businesses and industries.
Based on rough estimates of $50 per smart grid connected home, we are looking at an over $2 billion market for communications vendors selling software, equipment, and components.
China’s government is not unique in its pursuit of a smart grid but there appear to be several differences. First is the focus on FTTx versus wireless technologies for access, which seems like overkill for the amount of data to be transmitted.
Second is the scale of the market, as initiatives are under way in many provinces. Finally, FTTx PON component vendors are actively involved; at least one MAC SoC vendor, Cortina, is pursing this opportunity.
There is tremendous pressure in China for greater energy efficiency. While the US consumes more energy and oil per capita than China, China’s energy consumption has more than doubled in less than a decade.
The State Grid Corporation of China’s (SGCC) strategic goals include a reduction in reliance on pollution-generating coal power and an increase in the use of renewable energy. In China, the distances between renewable energy sources – whether wind power generated in Inner Mongolia or solar power generated in Tibet – and densely populated cities are vast.
There are examples of FTTx PON-based deployments specifically for smart grids but these projects have been relatively small in scale, for example, focused on a municipality. It is difficult to justify the costs of building an FTTx network simply for a smart grid. However, once an FTTx network is in place, the smart grid becomes another application supported by the network.
FTTx network builds are well under way in China. More than 1 million EPON OLT ports and 400,000 GPON OLT ports were consumed by China in 2010. Large shipments of OLT ports for China are continuing; more than 800,000 were consumed by China in 1Q11.
There are more than 18 million FTTx subscribers in China already. To date, most of the fiber connections are FTTB, meaning that the fiber terminates in the basement; a common location for household meters.