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ABB now “Walking in Memphis” with Thomas & Betts, after singing “Georgia on My Mind” with its 2010 purchase of Ventyx and the “Song of Arkansas” for its 2011 acquisition of Baldor Electric.
After ABB’s May 2010 acquisition of Ventyx that now appears to have strengthened its hand somewhat in the control center-based systems market for EMS, SCADA and DMS (see www.newton-evans.com/?p=646 ), and the company’s follow-on purchase of Baldor Electric Company (Fort Smith, Arkansas), a leader in electric motor manufacturing, ABB has now announced its intent to acquire Thomas & Betts. T&B is a leading supplier of low voltage gear, and a respectable share participant (via its own recent acquisition of Joslyn Hi Voltage) in the market for medium voltage switchgear. Among its products serving the utility and construction markets are: digital static transfer switches, integrated systems – dual feed & static switch PDUs, power distribution systems, circuit management, industrial UPS, surge protection devices and power quality services are among its MV/LV products.
Joslyn Hi-Voltage manufactures power transmission and distribution equipment for electric utilities. The company’s offerings include reclosers, sectionalizers, capacitor switches and controls, transfer switches, distribution automation equipment, disconnect switches, load break switches, underground switches, and VacStat vacuum interrupter monitors. Fisher Pierce distribution products manufactured by Joslyn Hi-Voltage include Powerflex and AutoCap capacitor controls and Smartset software, faulted circuit indicators (FCIs), line post current sensors, and Smartlink communications.
So, what’s behind the spate of U.S. acquisitions made by ABB over the past 24 months? Here are four solid reasons that we think support ABB’s strategic and decisive actions:
First, the strategic planners within ABB are certainly looking to strengthen the company’s position in the three related utility-centric markets of power generation, transmission and distribution. Ventyx has helped with the company’s total array of “smart grid” related offerings with its IT and OT capabilities. Baldor had provided ABB with additional inroads to the motor market, and now T&B will provide the company with access and distribution channels for low voltage products, and help fill in product line gaps with its Joslyn HV/MV product offerings.
Secondly, look at the gain in ABB’s access to the construction and industrial segments, both of which may see some upswing by mid-2012. T&B plays an important role as well in serving the needs of mid-size utilities across the country and to some extent, internationally. This provides ABB with additional openings into the public power utilities and cooperative utility communities.
Thirdly, I think ABB has correctly identified the “new elephant” in the global electric power marketplace as Schneider Electric. This acquisition marks the first significant industry reaction to Schneider’s key role around the world in low voltage equipment (as well as some MV offerings by virtue of the division of assets of the former Areva T&D) and Schneider’s extremely well-developed marketing channel strategy.
Fourthly, is ABB’s response to the near-term global economic outlook. By virtue of its continuing focus on North American acquisitions, ABB is avoiding the as-yet unresolved Euro-crisis in terms of purchase prices and values, and near-term European market outlook. Coupled with the fact that North American construction and industrial activity will likely pick up the pace this year (given what we have seen thus far into 2012), the acquisition certainly makes sense to me.
As far as downsides to the string of acquisitions, the biggest complaint I have seen among financial analysts commenting in the press for all three acquisitions, is the premium paid for these companies, relative to earnings, market value or recent year revenues. On the other hand, ABB has the financial resources and the access to capital markets that together enable the company to take these decisive strategic actions to improve its overall market position in North America, and around the world.
- Chuck Newton
Despite economic uncertainty, Outlook for Investment on Utility Telecommunications Upgrades during 2012-2014 remains positive, influenced by a new generation of field automation applications and advanced metering.
Study Finds Growth in Wireless Investment to Outpace Increases in Wireline Data Communications Over Near-Term and Mid-Term
Slow Rulings Related to Rate Restructuring and Real-Time Pricing Initiatives Viewed as Holding Back Some Near-Term Investment in Electric Utility Communications Upgrades.
JANUARY 3, 2011 ELLICOTT CITY, MD – Newton-Evans Research Company, Inc. announced completion of a three-volume report series focusing on data communications in the electric power industry. Survey findings from over 100 electric utilities worldwide indicate:
1) 88% of utility respondents agree that open protocols provide a degree of protection from premature obsolescence of products, but 58% of indicated they have experienced products that are supposedly standardized/open/interoperable which have not functioned as expected or promised by the vendor.
2) Only 11% of all respondents think that the use of synchrophasor technology will be a main driver in Smart Grid communications requirements, and 10% believe that synchrophasors will be the catalyst to adopt IEC standard 61850. (However, 48% said they were “neutral” regarding either statement.)
3) When asked, “What are some of the key data communications issues facing your utility?” responses to this question ranged from “Cost,” “Reliability,” and “Security” (the three most frequently mentioned) to other issues like technology obsolescence, bandwidth, interoperability, lack of standardization, spectrum availability, NERC CIP compliance, latency, terrain-topography , and scalability. See the accompanying illustration.
4) A follow up question to this was, “What do vendors need to do to address these issues?”. The most frequently identifiable sentiment could be paraphrased as, “Be more attentive to Utility requirements, communicate more, work together.” This was followed by comments mentioning “Standardization.” It is clear from this feedback that utilities expect increased cooperation from their communications equipment suppliers and services providers than they may have experienced to date. On the other hand, if vendors need to adapt their solutions and tailor their products and services to fit the situational needs of varying utility profiles, then they have their work cut out for them. Collaborative research and development may provide a feasible compromise solution.
Volume One of the three volume study includes detailed survey findings on grid operational telecommunications usage patterns and plans from over 100 electric utilities in 24 countries.
Volume Two contains profiles for 22 of the leading communications solutions providers and includes more than 30 smart grid communications-centric project summaries from around the world. Volume Three provides an in-depth assessment and outlook for the smart grid telecommunications market and summary of key market influences.
Level 1 – Reliability, Cost, Security
Level 2 – Bandwidth, Spectrum, Staffing
Level 3 – Protocols, Interoperability, Migration Paths
Level 4 – Obsolescence, NERC CIP, Carrier Limitations, Standards
Additional information on the three volume study Global Study of Data Communications Usage Patterns and Plans in the Electric Power Industry: 2011-2015 is available from Newton-Evans Research Company, 10176 Baltimore National Pike, Suite 204, Ellicott City, Maryland 21042. Phone 1-410-465-7316 or visit www.newton-evans.com to access the report brochure. The three-volume report is priced at $3,750.00 and can be ordered and downloaded online. Khrissy Newton can also be reached at knewton@newton-evans.com to provide any additional information regarding the new report series.
January 3, 2012 - Marks the publication launch date for the Newton-Evans’ three-volume study “Global Study of Data Communications Usage Patterns and Plans in the Electric Power Industry 2011-2015”
The Newton-Evans Research team has been working on its three volume study of Data Communications Usage Patterns and Trends for Smart Grid over the past several months. We have been successful in obtaining cooperation from more than 100 leading utilities around the world for this major new study. Discussions with leading equipment vendors, services providers, consultants and analyst colleagues have been completed.
We are pleased to announce that as of January 3, 2012, the three volume report will be available for online ordering via the Newton-Evans website. The report series is priced at $3,750.00 for the complete set.
For the month of January, we are pleased to offer both the well-received 2011 three-volume Smart Grid study series and the three-volume Data Communications series for a total price of only $5,750.00. This is a significant savings and a real value to any smaller-to-mid-size organization now active, or planning to become active, in the development of smart grid for the world community of electric power utilities, ISOs and RTOs. To take advantage of this offer, place your order over the phone by calling us at +1 410 465 7316 or toll free 800 222 2856.
For special pricing information on these and other critically acclaimed Newton-Evans studies published in 2010 and 2011, please call Khrissy Newton at 410-465-7316.
New Studies Underway
1) The acclaimed series of protective relay studies (now in its tenth edition) is formally underway. Look for progress updates on the Newton-Evans’ website during January. This is another of Newton-Evans’ multinational studies with participation from each world region, involving more than 25 countries, anticipated.
2) A current study of Automatic Generation Control practices among ISOs/RTOs and large utilities is in progress and will be finalized during January.
3) The “To the Point” series of short, concise reports on more than 75 T&D topics is now underway, with monthly releases of 5-7 reports expected during 2012.
The findings presented and excerpted from this three-volume study are based on a global research survey sent out by Newton-Evans over the course of the second, third and fourth quarters of 2011. One hundred and two utility officials involved in Operations and Telecommunications Planning and Design responded to the survey. These utilities combined serve over 153 million end use customers globally; 30 million in the U.S. alone. Volume Two includes many case studies of smart grid communications projects and Volume Three provides a fresh outlook for telecommunications expenditures and trends over the 2012-2014 period.
What are some of the key datacomm issues facing your utility?
In summary, when reviewing the comments received from most of the participating utilities, there is almost a different issue or sets of issues facing each utility when it comes to key data communications challenges. Newton-Evans’ analysts have grouped the large number of responses into several categories. The most frequently mentioned issue across all 81 comments was Cost (mentioned in 22 comments) followed by Reliability (mentioned in 16 comments) and Security (15 comments.) Other issues mentioned included zoning approval for new radio towers, communications carriers facing the same economic pressures as utilities, choosing a DA communications technology, the impact of data management on computing and human resources, lack of ability to manage disparate systems with utility resources, and others.
Continue reading Excerpts from Volume One of “Global Study of Data Communications Usage Patterns and Plans in the Electric Power Industry: 2012-2014”
Through the end of 2011, selected Newton-Evans reports are 20% off list price. See our Market Research Reports page for more details. This is a great opportunity for some year-end savings on an outstanding selection of informative, authoritative market studies.
Further news on the economy and its relationship to smart grid developments came from two sources in early November:
(1) The U.S. Federal Reserve Statement; and (2) the Continuing Eurozone Crisis;
See “Chuck’s Composite” page for our take on these developments and their likely effect on the Newton-Evans latest “Smart Grid – A Reality Check” study outlook. At year-end we will have a region-by-region and country-by-country update for each of 20 smart grid categories. The update will be sent to all 2011 clients for the “Smart Grid- A Reality Check” series.
We wanted to make it easy for our readers, clients and visitors to locate brochures for the various report products we have made available and are currently developing in-house. Three very current topics are the multi-client focal points for us at this time: Protective Relaying; Utility Data Communications for the Smart grid; and, Smart Grid Outlook-A Reality Check.
Note that the protective relaying study series and the data communications study series brochures offer pre-publication pricing through mid-November.
We will soon be placing the brochure for the upcoming T&D infrastructure series of 92 topical “to the point” report summaries online as well.
Here are some brochures (opens as .pdf)
Global study of protective relays
Global Utility Data Communications Report Series
Smart Grid: A Reality Check report series
A major update to the near-term and mid-term outlook for Smart Grid spending provided in volume 3 of the Newton-Evans study: The Worldwide Smart Grid Market in 2011: A Reality Check and Five Year Outlook Through 2015 is being prepared for late fourth quarter release to report series clients.
Subscribers to the recently completed three volume study of global smart grid activities will be receiving a further revision to the Newton-Evans’ outlook for smart grid spending in December. The update will be based on the ongoing research and between- the-lines assessments of fresh economic data released recently by the European Bank for Reconstruction and Development and the Asian Development Bank.
Please see Chuck’s Composite page for the detailed write-up of the latest outlook news from two key international non-governmental energy financing and project organizations (European Bank for Reconstruction and Development and the Asian Development Bank).
Please take note that this report series has met with very good market acceptance by our clients. We welcome additional clients for this series while the content and outlook is current. The outlook information will be kept up to date for clients as fresh world regional economic and financial news dictates over the coming year. Chuck’s Composite page is available to all visitors to read the latest on our economic findings and market observations affecting smart grid and smart energy developments.
The smart grid reality check report series can be ordered here
Newton-Evans Research to publish a new series of 92 North American market overview briefs on key segments of T&D Equipment and Automation Systems
Market briefs available beginning in December 2011 will include relevant summary profile information on a wide range of equipment, systems and services
Click here for more details and a listing of report topics
With more than 30 years of in-depth industry studies behind our 2012 planning efforts, we believe that now is the time to compile to-the-point individual market segment report summaries to assist North American industry planners coping with an uncertain, but cautiously optimistic, outlook for the 2012-2015 periods.
We are encouraging our clients to assist us in prioritizing our publication roll-out for these market briefs and to inform us if we are overlooking any product, system or services area of interest.
A listing of all 92 research topics is available upon request to Newton-Evans Research Company.
Initial Findings Depict Newer Data Communications Technologies and Services Being Adopted by World’s Electric Power Utilities
The brochure describing this multi-volume study can be found on our BROCHURES page http://www.newton-evans.com/?page_id=1258. Note that as of October 25, 100+ utilities from North America and more than 20 international countries have participated in the survey portion of the study.
The Newton-Evans Research Company has released initial findings from its extensive research program looking into electric power utility use of various telecommunications technologies and plans for adding capabilities to meet the requirements of the emerging smart grid. The ongoing research program is titled “Global Study of Data Communications Usage Patterns and Plans in the Electric Power Industry: 2011-2015.”
With more than 45 of the world’s leading utilities having joined the study as of October 5, here is a summary of a few key observations at the mid-point in the study:
AMI Projects: While power line carrier technology led in mentions of data communications technologies being used for at least some portion of meter communications, nearly one-third reported having no plans for AMI deployments at this time and 20% were undecided about their eventual choice of AMI communications methods.
Plans for connecting smart and advanced meters to the utility’s telecommunications network varied, with 36% saying they had no such plans. Just over one quarter cited use of public cellular services, 24% reported some use of RF mesh networks, and 13% reported use or plans to use point-to-multipoint radio. Many utilities are now taking a “wait and see’ attitude toward AMI with regulatory decisions not yet rendered in several states and international regions. There is still a good amount of discussion over AMI benefits, costs, communications approaches, data ownership, as well as meter data management and consumer privacy issues.
Interoperability and Open Protocols: One question group in the Newton-Evans’ survey measures the level of agreement or disagreement with 11 statements related to communications issues that were contributed by suppliers and utilities: (interoperability, SLAs, Industry Pace of Change, open protocols, synchrophasor use, and others). Among these topics, two have received strong indications of “agreement” among survey participants thus far along in the study. These are: interoperability being important to the utility, and the use of open protocols providing a “degree of protection from premature product obsolescence.
IP and Smart Grid Communications: The majority of respondents to date concur on the notion of using IP for all smart grid communications. However, 20% of the initial group indicated that they do not support standardizing on the use of IP for any SG communications.
Communications for Distribution Automation: Distribution Automation (DA) is a key component of smart grid. For DA, 40% of utilities surveyed to date use licensed point-to-multipoint communications, and thirty-eight percent use unlicensed point-to-multipoint. Numerous other technologies and approaches to DA communications were also mentioned including cellular, POTS, frame relay, paging, GPRS, fiber, leased lines, and private fiber-based Ethernet.
Responding utilities are also providing input on related DA questions: “Which communication technologies do you use for DA backhaul?” and also asked “Which DA communications network technology do you think will be dominant at your utility 3 years from now?” including reasons why a specific DA Backhaul technology is dominant at this time.
Smart Grid Communications: The study includes feedback sections on communications plans for five key smart grid component areas. Findings will be further detailed by world region and by utility ownership type and size. The three volume study is priced at $4,250.00, and can be ordered online and downloaded from the Newton-Evans web site from November 1, 2011 onward. Pre-publication report orders will be granted a $500.00 discount.
Spending on Utility Telecommunications: Earlier studies conducted by Newton-Evans Research estimated the total value of telecommunications expenditures in the global electric power industry at about $13 billion per year. About $5.4 billion of this total was allocated for data communications.
Public versus Private Networks: The debate on private versus public ownership of utility telecommunications networks is not going to end soon, based on findings reported here. It seems entirely likely that a majority of electric utility networks in North America and several international regions will remain essentially private, supplemented by the prudent use of commercial network services for less critical activities.
Additional information about the three volume report: Global Study of Data Communications Usage Patterns and Plans in the Electric Power Industry: 2011-2015 can be found in the Newton-Evans Research Company’s MARKET TRENDS DIGEST (Third Quarter 2011 edition can be viewed at www.newton-evans.com, or by e-mail (eleivo@newton-evans.com or eforrest@newton-evans.com), or by telephone at 1-800-222-2856. Newton-Evans Research Company is located at Suite 204, 10176 Baltimore National Pike, Ellicott City, Maryland 21042.
The brochure describing the study can be found on our BROCHURES page http://www.newton-evans.com/?page_id=1258. Note that as of October 25, 100+ utilities have participated in the study.
Be sure to check “Chuck’s Composite” page for a late October update column!
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Jan. 23 2012