Landis+Gyr Wins Biggest Smart-Meter Contract in U.K.
Landis+Gyr won a 600 million-pound ($956 million) contract to supply smart meters in the U.K., the biggest single order for the devices that measure gas and power use in real time.
The order means Landis+Gyr, a Swiss metering company bought in 2011 by Toshiba Corp. (6502), will supply Centrica Plc (CNA)’s British Gas unit with more than 10 million gas and power meters in its planned rollout of 16 million units, a British Gas official said today by phone, asking not to be named citing company policy.
It’s the second record contract in five weeks for Britain’s smart-meter industry after Telefonica SA (TEF) was named on Aug. 14 as the preferred bidder for two deals valued at 1.5 billion pounds to help transmit data gathered by the devices. The U.K., seeking energy savings and lower bills, plans to install 53 million meters by the end of the decade in a 12 billion-pound program.
“This is the largest deal of its kind worldwide and sets a new industry standard for working in partnership,” Landis+Gyr Chief Executive Officer Andreas Umbach said in a statement. “It allows us to achieve significant economies of scale in meter production, to expand our U.K. operations and to further establish the U.K. as a global center of smart energy.”
Landis+Gyr will probably double its 600-person U.K. staff as a result of the deal, according to the statement e-mailed by British Gas, which itself may add 500 workers after already announcing 1,000 smart-energy jobs. The meters, to be installed through 2020, may cut an estimated 5 percent off energy bills, or 65 pounds a year, not including inflation, British Gas said.
“The data and communications announcement last month provided the clarity and government commitment behind the rollout,” said Colin McKerracher, an analyst at Bloomberg New Energy Finance in London. “Now we’re seeing the first major energy retailer ready to move ahead with a large rollout.”
Enel SpA (ENEL) installed 32 million smart meters from 2001 to 2006 with technology from Echelon Corp. (ELON) The project cost 2.1 billion euros ($2.8 billion) when accounting for communications infrastructure and software, McKerracher said. The only other deals of comparable size today are in China, and those are split into tenders so individual contract awards are smaller, he said.
The Telefonica deal and other data and communications contracts announced on the same day in August totaled 2.4 billion pounds.
“This puts the U.K. at the center of Europe’s smart-metering rollout,” McKerracher said, citing delays in France and Germany and possible financing difficulties in Spain. “You have more than 3 billion pounds in contracts announced in just over a month showing that the U.K. smart-metering market is not only moving, it’s moving quite quickly.”
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