The Merger of China’s Smart Grid and PON – A Potential Perfect Storm

Introduction

This report analyzes the EPON market opportunity for component and equipment vendors if the State Grid Corporation of China (SGCC) proceeds beyond the trial stage with the use of EPON for its AMI (automated meter infrastructure) and smart grid projects. The advantages and disadvantages of PON technology versus other communications technologies for smart meters are analyzed.

Highlights

The SGCC intends to spend $100bn on smart grid technologies. The SGCC is trialing the use of EPON for AMI at 80,000 premises in China. While fiber bandwidth seems like overkill for automated meter reading, the ultimate goal of the SGCC may be to become a communications service provider.

The deployment of a PON-based smart grid would benefit OLT equipment vendors such as Huawei and ZTE, followed by Alcatel-Lucent and FiberHome, along with the ONT box manufacturers and component vendors supplying fiber splitters, transceivers, BOSAs, and PON MAC chip vendors. The list of box and component vendors is long, including Dare, T&W, Cambridge Industries Group, HiSense, Genuine, Cyoptics, Neophotonics, Broadcom, Vitesse, and Semtech, to name a few.

The majority of smart meters deployed to date in China has been based on PLC (powerline communications). The SGCC will continue to evaluate other types of communications technologies. It is possible that increased focus will be placed on wireless, such as LTE. While LTE terminals are expensive today, costs will decline and could decline rapidly if the SGCC was to order large volumes.

Features and Benefits

  • Offers an in-depth look at the SGCC's EPON trial along with the SGCC's requirements for EPON equipment in its smart grid.

  • Provides a view of the SGCC's smart grid plans and the market drivers for deploying AMI.

  • Discusses recommendations for EPON component and equipment vendors, given the early stage of the SGCC's smart grid plans.

  • Provides in-depth estimates of the potential opportunity for EPON component and equipment vendors.

Key Questions Answered

  • What is the SGCC and what are its smart grid plans?

  • Why is the SGCC considering EPON for its AMI and smart grid? What are the advantages and disadvantages of PON compared to other communications technologies?

  • How large is the EPON opportunity in the SGCC's smart grid? What are the major sensitivities to the market estimates?

  • What types of adaptations need to be made to existing EPON equipment? Which vendors are adapting their respective solutions?

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