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Interview

with Alvaro Dias Junior Executive Vice President and CEO South America Landis+Gyr – America do sul

01.07.2013 / Energyboardroom

The SGP+M project is the creation of Landis & Gir Equipamentos de Medico which started in Brazil in 1994 and the first electronic metering system to be approved by Inmetro. What have been the repercussions of being a first comer smart grid provider in Brazil?

Landis & Gyr – a swiss company – set foot in Brazil in 1996 from the association of Inepar, a large Brazilian EPC company. After this collaboration, followed a series of acquisitions and transitions.

Therefore, a couple years later Landis was taken over by Siemens and was renamed Siemens metering, which then sold the company to a global leading investment firm named KKR – Kohlberg Kravis Roberts. Only a year later, this investment firm divested its portfolio and sold our company to another investment house named Bayard Capital based in Australia. Through this process we became a global firm with 5200 employees.

When we first arrived in Brazil in 1996, regulation in the smart metering market was inexistent. For instance, SGP+M – Losses and metering management system – was developed to bring the metering systems outside of the users’ homes, which meant a new development and regulation issue for Brazil. Between 1997 and 1999, despite improvements in our metering systems, social protests against the system froze our initiatives. Inmetro – the National Institute of Metrology, Quality and Energy – only officially approved our metering systems in 2009.

Basically, our system externalizes the metering readings and offers hourly updates about the consumption. These systems are not just pioneers in Brazil but worldwide. Already one million consumers are connected to our systems in Brazil. Our metering systems have been developed by Landis+Gyr and used a patent owned by CEPEL – Eletrobras Power Research Center. CEPEL had only established preliminary concept studies and Landis & Gyr actually transformed this concept into a physical product to be commercialized in the market.

Today, from our expertise in metering systems, we are creating a new portfolio of meters to comply with ANEEL’s – Brazilian Electricity Regulatory Agency – new specifications. Our compliance with these regulations is simple as our metering systems are mostly standardized across our international operations, highly innovative, yet tailor made and adjusted to adjust to Brazilian regulations.

Implementing new efficient solutions in Brazil is key to become a recognized player in a very competitive market. What can your metering systems offer to the Brazilian citizens?

Our smart metering systems – which are part of the global smart grid systems – provide accurate information and will comply with different lines of electricity tariffs such as the “White tariff” which allow customers to pay less in function of when they consume energy during the day.

Until 2009, consumers were using only electro mechanic meters whereas for the past four years digital meters and metering systems have revolutionized the market.

We have diversified our portfolio across the globe to include a new area called Distribution Automation. This area is a monitoring platform which is used for instance in underground vaults, where a radio frequency signal is sent to the central station to alert in case of water, gas or even human presence underground.

In 2011, when acquired by Toshiba Corporation, we are participating in a new project – smart city Buzios – in partnership with Enel and Endesa based on their PLC communication modules to spread energy efficiencies, services and technologies into a live laboratory city and reduce energy consumption and CO2 emissions. This project is the first smart city project to spread its wings in Brazil.

Based on these new initiatives and technologies for smart metering systems in Brazil and across the globe, why are we not witnessing a high number of these systems here?

Brazil has been really reluctant to implement new changes. Currently, the Utilities are “on hold”, implementing new regulations and concerned regarding to renew its concessions agreements periods and this is jeopardizing new investments programs. This phenomenon creates serious problems to implement new solutions. Nevertheless, thanks to our market knowledge, expertise and presence in Brazil since 1996, we have managed to overcome many of the challenges that Utilities are facing.

In 2008, with 100 million dollar revenues, Landis & Gyr Brazil already represented one of the important members of the group. What does Brazil represent among its international affiliates spread throughout the globe?

Our South American operations which I have been representing for the last 13 years represent around eight percent of Landis & Gyr global revenues. The United States stand as our strongest country in America, followed as importance by regions such as Europe and Asia. Brazil will play an important part in our future development, but for that to happen the local market must take off.

What makes Landis & Gyr the preferred smart meter partner of choice?

Our operations both worldwide and locally in Brazil are very well structured. With the support of Toshiba Corporation, we gained access to new technologies and know-how which can only complement and improve our specialized smart metering systems. In the United States for instance, where L+G produces around six million digital meters to smart metering application, are able to contain different modules of communication. In Brazil, our systems could adapt in the same way and this flexibility makes us very competitive in the market.

Landis & Gyr defines itself as a system integrator and therefore we wish to collaborate on all types of projects and adapt to different power sources. For example, we have started a new project in solar system metering systems with a local Brazilian client, trying to develop the potential for our systems. Only with time and resources, will we be able to show our Brazilian citizens the full potential of our systems.

At such a strategic moment, including major international events in the coming years and a focus on Brazil, what will Landis & Gyr achieve in the next five years?

Our main projects will emphasize on our distribution automation metering systems. We wish to implement our distribution automations products and specialized metering systems within the same communication network.

Our growth perspectives in Latin America are difficult to predict but we hope to reach a double digit growth in the coming years. Even though Brazil and Latin American countries are growing at a rapid pace, our experience is that our solutions work best in the most developed countries like in the United States, Europe and Japan. Latin America has been resilient to change and every time we lay the foundations of a new revolutionary system, it takes a very long time to convince people and to change their mindset. This factor does not apply in the same way in developed countries were new technologies are adapted rapidly. Once we change the order of things the implementation of this kind of systems for almost every consumer present in the country, our growth will defy our affiliates.

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