Schneider Solidifies Focus on Green Biz

It doesn't seem all that long ago that electrical distributors were struggling with the change in identity of Square D to Schneider Electric after the French company's 1991 acquisition of one of the best-known brands in the business.

Square D, its familiar logo, and the company's commanding market share in circuit breakers, load centers and other distribution equipment fit electrical distributors like their favorite baseball mitt. As more than 40 business journalists found out at Schneider Electric's 2011 Editors' Event, these products are still an important part of Schneider's product mix 20 years after the acquisition, but the French giant has expanded far past the traditional electrical distribution market and is now a leading player in some of the fastest-growing and most intriguing electrical markets in the world, including the smart grid, data centers, electric vehicles, building automation and solar products.

The company's sales have kept pace with this growth, even in a dicey market environment. Over the past decade Schneider Electric's annual global sales have grown from €60 billion (approximately US$83 billion) to €200 billion (US$277 billion) as it evolved from a circuit breaker company to a solutions company, said Jeff Drees, U.S. country president, at the event in Chicago on Oct. 14. Drees said because of the uncertainty about when capital expenditures on building and facility construction or upgrades will start ramping up, Schneider and its customers must learn how to use green products and systems to help building owners and corporations operate more profitably by slashing their operational expenses.

Drees expects three 2011 acquisitions to position Schneider for even more growth in the future: Lee Technologies. Fairfax, Va., a data center specialist; Telvent, Fort Collins, Colo., a major player in the smart grid; and Summit Energy, Louisville, Ky., a provider of energy management and sustainability services. The press event focused on Schneider Electric's progress in all of these areas, but the company's aggressive push into products and services for the smart grid was definitely one of the larger points of emphasis at the event.

In the breakout session, “Smart Grid Reality Check,” Dave Jardine, Telvent's president and chairman, offered an interesting overview of the smart grid and the opportunities and challenges it will provide for Schneider's customers. He said the smart grid has suffered from some recent negative press because of consumer complaints about what they perceive as a breach of privacy in the data collected by new residential meters that are part of the smart grid's advanced metering infrastructure (AMI). Jardine said it's important for utilities and the companies that manufacture these meters to promote the convenience, safety, communications and energy savings the smart grid can offer.

While some speakers were frustrated by the speed of deployment of the smart grid and said more technology is available than what's installed on the grid, Jardine is excited about the smart grid's capabilities to monitor the variable power generation of renewable energy sources like solar and wind. He also said the smart grid will be a key tool for integrating electric vehicles into the grid, even taking the excess power generated by electric vehicles while they are parked in parking lots or garages and feeding it back onto the grid. He also said electric vehicles present huge challenges for local electrical grids because one EV car has an electrical load equivalent to that of an entire house.

Stephen Todd, director of energy services, Egan Co., Brooklyn Park, Minn., brought an interesting perspective to the press event as an energy specialist with an 600-employee (seasonally adjusted) contractor that does $185 million in the electrical and plumbing, HVAC, fire, life and safety systems trades, as well as building cladding. The company, which does 50 percent of these sales in the electrical market and 75 percent of all its sales in metropolitan Minneapolis, has been in on some big project work in the area, including a downtown light-rail project; a $750,000 switchgear installation at the Mayo Clinic in Mankato, Minn.; and an energy retrofit at the Warren E. Burger Federal Building that it did with TAC Vista, Schneider Electric's in-house ESCO.

Todd said Egan works with electrical distributors on many of its energy retrofits, but that at times the company works directly with electrical manufacturers, particularly if they have to fast-track a job. He says Egan Co. looks for distributors that can provide the basics — solid stock levels, information on new products and reliability.

He is excited about the sales opportunities that electric vehicles will offer Egan Co., and said Level 3 charging stations that provide a quick charge in 15 minutes or less will provide local retail businesses with some unique marketing opportunities. Todd said if a convenience store had these charging stations on-site, it might be able to sell customers some additional products or services while they are waiting for their electric vehicles to charge up.

Allen Breeze, senior V.P. for Schneider's Power Business, shared Todd's excitement for the sales opportunities with electric vehicles, and said he expects market demand to start ramping up in 2012 when auto manufacturers roll out more EV models. He said that right now there are only four EV models on the market but that 20 will be available next year. Breeze said auto manufacturers believe one of the biggest challenges with EVs will be convincing consumers to install Level 2 charging station (240V) in their homes because they will drastically reduce the charging time of the basic Level 1 charging stations that run on 120V.

Breeze is also excited about opportunities in the solar market for Schneider Electric, which is a major player in the inverter space with its Xantrex product line. SunPeak Solar recently selected Schneider Electric to supply 25 solar power conversion substations for a solar power plant in Niland, Calif.