Vattenfall AB Selects Echelon's NES Smart Electricity Metering System for up to 700,000 Customers; Swedish Utility to Award Tender to NES Partner Telvent
The framework contract award is for the installation of a smartmetering infrastructure to service approximately 300,000 residentialcustomers in Sweden to be supplied in six phases of 50,000 customerseach beginning in the first quarter of 2006 with options for four morephases, each for an additional 100,000 customers. The initial sixphases are expected to complete by early 2008 with expected revenue toEchelon of between $20 million and $30 million. With options, theproject could extend into 2008 or 2009 and lead to over $50 million inrevenue, depending upon how many options Vattenfall exercises, if any.
"We are delighted that Vattenfall has chosen the NES system fortheir project and our partner Telvent as the prime contractor to meettheir aggressive deployment schedule," said Ken Oshman, Echelon's CEOand chairman. "Sweden is one of the most active utility markets todayand we believe the selection of the NES system for a project of suchlarge scale clearly signals the market acceptance of next generationmetering systems in favor over the limited functions of the AMRsystems of the past. The Vattenfall decision marks the emergence ofour NES business and the validation of our strategy as we begin torealize the results of our investments for the last several years inproducts, technologies, and partners."
Echelon's NES system provides an open, bidirectional, andextensible infrastructure that enables a comprehensive range ofutility applications that can bring benefits to every aspect of autility's operation, from metering, to customer services, todistribution operations, to value-added services. By choosing the NESsystem, Vattenfall can expect to have better control over energy usageand save substantial cost in monthly meter reading and other areas oftheir operations while providing improved customer service.
According to Mr. Manuel Sanchez Ortega, Telvent's chairman andchief executive officer, "This project is a world-class opportunity inthe area of system integration of electrical measurement applications,as it involves the management of real-time information and itsintegration with other existing systems. We are pleased to have beenchosen by Vattenfall to undertake this project that will become theshowcase reference for automated meter management systems at aninternational level."
Telvent was the first company to join Echelon's NES Value-AddedReseller (VAR) program -- joining in December 2003. The NES VARprogram is designed to establish Echelon's NES system as a globalstandard for intelligent metering systems by enabling companies thatprovide products and services to the utility industry to adopt andadapt the NES infrastructure as the basis for their end-to-endmetering solutions sold under the NES Powered by Echelon(TM) brandingprogram. More information about Echelon's NES System and the NES VARprogram may be found at http://www.echelon.com/nes.
Swedish energy markets were deregulated in 1996. In June 2003 theSwedish parliament passed regulations requiring all electricity metersin Sweden to be read on a monthly basis by July 1, 2009. Sweden isamong the most intense electricity users in the world, with an averageconsumption of over 16,000 kWh per capita. Counting both householdsand companies, there are over 5 million electricity users in Sweden.Electricity is distributed by approximately 170 power utilities, ofwhich Vattenfall, Fortum, and Sydkraft are the largest -- withapproximately 1 million customers each.
Vattenfall AB is wholly owned by the Swedish state and is thefifth largest energy company in Europe. Vattenfall generateselectricity and heat and delivers energy to about 6 million customersin Northern Europe, including approximately 1.3 million in the Nordicregion. Operations are concentrated primarily in Finland, Germany,Poland and Sweden. The Vattenfall group had a turnover of more thanSEK 113.4 billion in 2004 and employs some 32,000 people. Vattenfall'svision is to be a leading European energy company. Through its "NumberOne for the Customer" program, Vattenfall is investing in networkedmetering systems and improved billing to increase customersatisfaction with regard to service, quality, efficiency, and customercare.
Telvent (Nasdaq:TLVT), the Global RealTime IT Company, specializesin high value-added solutions in four specific industry sectors(Energy, Traffic, Transport and Environment) in Europe, North America,Latin America, the Asia-Pacific region, and the Middle East andAfrica. (www.telvent.com).
About Echelon Corporation
Echelon Corporation (Nasdaq:ELON) is a pioneer and world leader incontrol networking -- networks that connect machines and otherelectronic devices -- for the purpose of sensing, monitoring andcontrolling the world around us. Echelon's LonWorks platform forcontrol networking was released in 1990 and has become a worldwidestandard in the building, industrial, transportation, and homeautomation markets. Launched in 2003, Echelon's Networked EnergyServices system is an open, extensible, advanced meteringinfrastructure that can bring benefits to every aspect of a utility'soperation, from metering and customer services to distributionoperations and value-added business. In 2005 Echelon released theworld's first embedded control network infrastructure, the Pyxos(TM)platform, extending the benefits of networking inside machines to thesensors and actuators that make them function.
Echelon is based in San Jose, California, with internationaloffices in China, France, Germany, Italy, Hong Kong, Japan, Korea, TheNetherlands, and the United Kingdom. Further information regardingEchelon can be found at http://www.echelon.com.
Echelon, LonWorks, and the Echelon logo are registered trademarksof Echelon Corporation registered in the United States and othercountries. Networked Energy Services Powered by Echelon, NES Poweredby Echelon, and Pyxos are trademarks of Echelon Corporation in the USand other countries. Other product or service names mentioned hereinare the trademarks of their respective owners.
This press release may contain statements relating to futureplans, events or performance, including statements regarding thenumber of Vattenfall customers that will be served by the NES meteringsystem, the relative size of the project when compared with otherinstallations, and the emergence of Echelon's NES business and VARchannel. Such statements may involve risks and uncertainties,including risks associated with market acceptance of the NES systemand the NES system's ability to perform as designed; the risk that theVattenfall project is subsequently cancelled or reduced in size; risksassociated with potential production or shipment delays of NEScomponents to Telvent by Echelon or its production partners; risksthat the Vattenfall deployment and system integration activities withEchelon, Telvent and other partners in the project are not successful,do not meet their target dates, do not expand or gain momentum, causeEchelon to be liable for penalties or cause Vattenfall to terminatethe project; risks that payments in respect of the Vattenfall projectare not received when due; the risk that the contemplated transactionsare challenged by third parties; and other risks identified inEchelon's SEC filings. Actual results, events and performance maydiffer materially. Readers are cautioned not to place undue relianceon these forward-looking statements, which speak only as of the datehereof. Echelon undertakes no obligation to release publicly theresult of any revisions to these forward-looking statements that maybe made to reflect events or circumstances after the date hereof or toreflect the occurrence of unanticipated events.