|
Server : Apache/2.4.62 System : FreeBSD fbsdweb2.web.rcn.net 14.1-RELEASE FreeBSD 14.1-RELEASE releng/14.1-n267679-10e31f0946d8 GENERIC amd64 User : www ( 80) PHP Version : 8.3.8 Disable Function : NONE Directory : /domains/enrgy/archives/ |
Upload File : |
<html>
<head>
<title>An Integrated View of Systems to Support the Energy Services Provider and Retailer
in the De-Regulated Era</title>
</head>
<body style="font-family: Arial" vlink="#808080">
<div align="center"><center>
<table border="0" cellpadding="8" cellspacing="0" width="98%" bgcolor="#000000">
<tr>
<td width="100%" valign="middle"><a name="top"></a><img src="../images/pmamagsm.gif" alt="PMA Online Magazine" border="0" align="right" WIDTH="229" HEIGHT="100"></td>
</tr>
</table>
</center></div><div align="center"><center>
<table border="0" cellpadding="8" width="98%">
<tr>
<td width="25%" valign="top" align="center"><!--webbot bot="ImageMap" rectangle="(14,297) (97,322) http://www.powermarketers.com/adrates.html" rectangle="(11,230) (95,257) http://www.powermarketers.com/pmajobs.htm" rectangle="(12,163) (96,189) http://www.powermarketers.com/main.htm##_parent" rectangle="(12,95) (96,121) http://www.powermarketers.com/power2.htm##_blank" rectangle="(11,29) (96,54) ../pmamag.htm" src="../images/magmenu.gif" alt="PMA OnLine Magazine Menu" border="0" align="center" startspan --><MAP NAME="FrontPageMap"><AREA SHAPE="RECT" COORDS="14, 297, 97, 322" HREF="http://www.powermarketers.com/adrates.html"><AREA SHAPE="RECT" COORDS="11, 230, 95, 257" HREF="http://www.powermarketers.com/pmajobs.htm"><AREA SHAPE="RECT" COORDS="12, 163, 96, 189" HREF="http://www.powermarketers.com/main.htm" TARGET="_parent"><AREA SHAPE="RECT" COORDS="12, 95, 96, 121" HREF="http://www.powermarketers.com/power2.htm" TARGET="_blank"><AREA SHAPE="RECT" COORDS="11, 29, 96, 54" HREF="../pmamag.htm"></MAP><a href="../_vti_bin/shtml.dll/archives/daswani.htm/map"><img src="../images/magmenu.gif" alt="PMA OnLine Magazine Menu" border="0" align="center" ismap width="110" height="350" usemap="#FrontPageMap"></a><!--webbot bot="ImageMap" endspan i-checksum="31310" --><p><a href="../searchpma.htm"><img src="../images/archives.gif" alt="Archives Search" border="0" align="center" WIDTH="70" HEIGHT="40"></a></p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p><a href="daswani.htm#top"><img src="../images/b-t-top.gif" alt="Back To Top" border="0" WIDTH="71" HEIGHT="35"></a></td>
<td width="75%" valign="top"><b><font SIZE="4"><p ALIGN="left"></font><font size="5">An
Integrated View of Systems to Support the Energy Services Provider and Retailer in the
De-Regulated Era</font></b><i></p>
<p ALIGN="left">by Dilip Daswani<br>
President, Enterprise Automation Advisors, Inc.<br>
</i><font face="Arial" size="2">(<em>originally published by PMA OnLine Magazine on 03/98</em>)</font></p>
<font SIZE="4"><u><p>Impetus for Change</u></font></p>
<p>Under the new de-regulated era, energy service providers and retailers are faced with
new pressures not present under the regulated environment. These include:<ol>
<li>Competition for load as a result of Direct Access </li>
</ol>
<ul>
<li>Price competition</li>
<li>No guaranteed profit margins</li>
<li>Not able to simply pass costs onto consumers</li>
<li>May need to offer power at fixed prices over a long term period to be competitive</li>
<li>May need to offer enhanced customer service and pricing options to be competitive.</li>
</ul>
<ol>
<li>Competition for power supply</li>
</ol>
<ul>
<li>New breed of energy service providers and retailers competing for electric power</li>
</ul>
<ol>
<li>Competition for transmission capacity</li>
</ol>
<ul>
<li>Greater number of power marketers looking to wheel power</li>
</ul>
<ol>
<li>Reduced "return on assets" if unable to get rid of excess generation capacity</li>
<li>Dealing with new entities such as the Independent System Operator and the Power Exchange</li>
<li>Additional NERC requirements to ensure system reliability<font SIZE="2"> </font></li>
</ol>
<p>As a result, energy services providers and retailers need to excel at the following
business processes in order for sustained competitiveness and profitability. <ol>
<li>Demand / load profiling and forecasting</li>
<li>Supply management </li>
</ol>
<ul>
<li>bilateral agreements, </li>
<li>short-term trading on power exchanges such as the California Power Exchange and APX </li>
<li>optimizing power generation assets and capacity, </li>
</ul>
<ol>
<li>Risk management </li>
</ol>
<ul>
<li>NYMEX, </li>
<li>OTC Futures, and </li>
<li>SWAPS - Contract for difference</li>
<li>TCCs</li>
</ul>
<ol>
<li>Scheduling with Independent System Operators (ISOs) and/or scheduling coordinators on an
hourly basis</li>
<li>Settlements processing for transactions with Power Exchanges, ISOs and bilateral parties</li>
<li>NERC tagging</li>
<li>OASIS reservations</li>
<li>Providing Flexible Pricing Retail billing Options</li>
<li>Customer Service</li>
<li>Sales and Proposal Generation</li>
</ol>
<p>Without full use of information technology, organizations will not excel at the above
business processes and will undoubtedly suffer as a result. </p>
<font SIZE="4"><u><p>Integration is Key</u></font></p>
<p>Taking each of the business processes listed above and applying information technology
independently is not sufficient to achieve the level of automation, efficiency and
information access required to compete effectively. </p>
<p>It is essential that organizations formulate an integrated systems plan and
architecture before attempting to address each of the business processes. The business
processes are highly inter-related and inter-dependent such that, without a strategy for
integration, an organization is unlikely to reap the business benefits to be competitive. </p>
<p>As an example, without the proper integration of risk management with supply
management, an organization will always fall short on its risk management execution. </p>
<p>It is likely that each of the business processes will be addressed in different ways
with respect to information technology. In some cases, packaged software may exist in the
commercial marketplace that an organization purchases and implements. In other cases, an
existing legacy system may be sufficient or the organization may decide to custom develop
a system. </p>
<p>Given that each of the business processes may be addressed in a variety of ways using a
variety of technologies, an organization’s integration strategy must accommodate each
of these variations. </p>
<p>There is a tremendous amount of commercial software that is available today that
addresses many of the needs of the de-regulated era energy service provider and retailer.
However, no single vendor offers an integrated suite of products that addresses all the
needs. Furthermore, because of the time pressures to get their own products to market,
none of the vendors have made any significant effort to integrate their products with the
products of other vendors. It is unlikely that this will change in the foreseeable future
as new requirements are placed upon them to upgrade their products as de-regulation forges
ahead. </p>
<p>Thus the energy services provider and retailer must assume the responsibility for
integration. The energy service provider will need to ensure that it has a strategy in
place to integrate the products and that any commercial products it chooses can in fact be
integrated. Thus product evaluation is key to achieving the integration goal. A product
must have APIs and hooks exposed so that it can be integrated. Otherwise, the organization
will be left with a hodgepodge of systems that do not provide it with the benefits
necessary to be competitive. </p>
<font SIZE="4"><u><p>Systems Classification for the De-Regulated Electric Power Industry</u></font><font SIZE="2"></p>
<p>In order for quicker time-to-market, many organizations will likely purchase commercial
software rather than custom develop where feasible. The table below shows the different
classes of systems that are required in the de-regulated era and the vendors that are have
offerings in each of the areas. </font></p>
<div align="center"><center><table BORDER="1" CELLSPACING="1" BORDERCOLOR="#000000" CELLPADDING="7" WIDTH="98%">
<tr>
<td WIDTH="63%" VALIGN="TOP" BGCOLOR="#000000"><font size="2" color="#FFFFFF">System
ClaSSIFICATION</font></td>
<td WIDTH="37%" VALIGN="TOP" BGCOLOR="#000000"><font size="2" color="#FFFFFF">VENDORS WIth
Offerings</font></td>
</tr>
<tr>
<td WIDTH="63%" VALIGN="TOP"><font SIZE="2">Trading and Supply Management<p>(includes both
Physical and Paper Trading and Position Management)</font></td>
<td WIDTH="37%" VALIGN="TOP"><font SIZE="2">Triple Point Technologies – Franklin<p>KW
International – kW2000</p>
<p>Unified Information – ACES</p>
<p>Nucleus </p>
<p>Powertrade – Indigo</p>
<p>Altra Energy</p>
<p>TransEnergy Management</font></td>
</tr>
<tr>
<td WIDTH="63%" VALIGN="TOP"><font SIZE="2">Risk Management / VAR</font></td>
<td WIDTH="37%" VALIGN="TOP"><font SIZE="2">Zainet<p>ORS – RiskWorks</p>
<p>Sava Risk Management</p>
<p>C*ATS</font></td>
</tr>
<tr>
<td WIDTH="63%" VALIGN="TOP"><font SIZE="2">Scheduling</font></td>
<td WIDTH="37%" VALIGN="TOP"><font SIZE="2">Unified Information – ACES<p>Nucleus</p>
<p>Powertrade – Indigo</font></td>
</tr>
<tr>
<td WIDTH="63%" VALIGN="TOP"><font SIZE="2">Wholesale Settlements</font></td>
<td WIDTH="37%" VALIGN="TOP"><font SIZE="2">Powertrade – Indigo<p>Triple Point
Technologies – Franklin</p>
<p>Nucleus</p>
<p>TransEnergy Management</font></td>
</tr>
<tr>
<td WIDTH="63%" VALIGN="TOP"><font SIZE="2">Customer Information & Customer Service</font></td>
<td WIDTH="37%" VALIGN="TOP"><font SIZE="2">Energy Interactive<p>ConneXT</font></td>
</tr>
<tr>
<td WIDTH="63%" VALIGN="TOP"><font SIZE="2">Retail Billing</font></td>
<td WIDTH="37%" VALIGN="TOP"><font SIZE="2">Energy Interactive<p>ConneXT</font></td>
</tr>
<tr>
<td WIDTH="63%" VALIGN="TOP"><font SIZE="2">Sales Support & Automation</font></td>
<td WIDTH="37%" VALIGN="TOP"><font SIZE="2">Energy Interactive</font></td>
</tr>
<tr>
<td WIDTH="63%" VALIGN="TOP"><font SIZE="2">Interfaces to External Parties and
Organizations</font></td>
<td WIDTH="37%" VALIGN="TOP"><font SIZE="2">PowerNavigator<p>Continental Power Exchange</p>
<p>California Power Exchange</p>
<p>California ISO</p>
<p>Unified Information – ACES</font></td>
</tr>
<tr>
<td WIDTH="63%" VALIGN="TOP"><font SIZE="2">Financial Accounting</font></td>
<td WIDTH="37%" VALIGN="TOP"><font SIZE="2">Peoplesoft<p>Lawson</p>
<p>Computron</p>
<p>SAP</p>
<p>Oracle Financials</p>
<p>JDEdwards</p>
<p>Platinum Software</p>
<p>Ross Systems</p>
<p>Walker Interactive</font></td>
</tr>
<tr>
<td WIDTH="63%" VALIGN="TOP"><font SIZE="2">Load Profiling & Forecasting</font></td>
<td WIDTH="37%" VALIGN="TOP"><font SIZE="2">EPRI CEED</font></td>
</tr>
</table>
</center></div><p>All of these vendor offerings undoubtedly utilize different technologies
and architectures. </p>
<p>An attempt to integrate these systems or any in-house custom developed system on a
pair-wise basis would lead to a situation where there would be N*(N-1)/2 (where N is the
number of systems) potential interfaces to develop and upkeep. Furthermore, any change in
a system or an addition of another system would require one to potentially visit N
different interfaces.</p>
<p>Instead, what is needed is an integration framework which consists of an integration
data model (or object model), a business process execution engine and a translation layer
that serves as a conduit between all the systems. The next section discusses more fully
how such a framework would work and what it would take to build such a framework. </p>
<font SIZE="4"><u><p>Integration Framework</u></font></p>
<p>As an example let us take a look at a conceptual integrated system for the California
Market that integrates the following subsystems. These subsystems can either be commercial
packages or custom developed systems.<ol TYPE="a">
<li>A Trading and Supply Management System</li>
<li>A Position Reporting & Risk Management System</li>
<li>A Pricing System</li>
<li>A Wholesale Settlement System</li>
<li>A Scheduling System with an interface to the ISO and an external Metering System</li>
<li>A Generation Planning System</li>
<li>A Load Profiling and Forecasting System</li>
<li>An interface to the California Power Exchange for day-ahead market (a.k.a. Thin Trade
Client)</li>
<li>An interface to the Automated Power Exchange for 2-week ahead trading.</li>
</ol>
<p>The illustration below shows the various interfaces between these systems. To develop
and upkeep each of these interfaces would be a monumental task. </p>
<p align="center"><img SRC="../images/daswani1.gif" border="0" WIDTH="474" HEIGHT="355"></p>
<p>A simpler approach would be to use an integration framework which would require at most
N (where N is the number of Systems) interfaces to be developed. </p>
<p>Each interface would intercept and forward events/requests from their corresponding
system to the business process execution engine. The interface would also translate the
event/request from the native format to that of the integration data/object model format.
Similarly, the interface would also accept all events from the business process execution
engine, translate to the native format and forward on to its corresponding system. </p>
<p>The business process execution engine is responsible for interpreting the event/request
and then forwarding the event/request to all interfaces that require it. Under the
presence of an integration framework, the system would appear as follows:</p>
<p align="center"><img SRC="../images/daswani2.gif" border="0" WIDTH="479" HEIGHT="359"></p>
<p>The business process execution engine, as an added benefit, could contain a repository
of all inter-system events. This information would be useful for both tracking the
business as well as for tracking down "lost events/requests". </p>
<p>The question that remains is what technology is available to create an integration
framework such as the one described above. While an integration framework specific to the
electric power industry does not exist, there are several generic middleware products that
can be leveraged to develop such a framework. </p>
<p>These products include the TIB from Tibco, Tuxedo from BEA Systems, and various
implementation of the CORBA ORB from several vendors such as IONA and Visigenic. </p>
<p>There are also some products that allow one to create integration frameworks at a
higher level, most notably, Connector/Collaborator technology from Crossroads Software. </p>
<p>Enterprise Automation Advisors, Inc. is in the process of defining an integration
data/model specifically for the de-regulated power industry that can also be leveraged for
such an integration framework.</p>
<font SIZE="4"><u><p>Summary</u></font></p>
<p>In summary, the de-regulated power industry is one where the success of an organization
will depend on how well it leverages information technology. There are a tremendous number
of new business processes and requirements that are being placed upon the energy service
provider and retailer in the de-regulated environment. Those that are able to address
these requirements with the proper use of information technology will succeed. This paper
has explained that proper use means having an integration strategy in place because it is
integration that adds the greatest value. </p>
<p>There are a tremendous number of commercial software packages available today for the
new de-regulated marketplace. These packages need to be evaluated not only on the basis of
their functionality but also in terms of their integration capability and how they fit in
with an organization’s integration strategy.<font SIZE="2"> </font>To properly
evaluate a package is a time consuming process. If not done properly, an organization is
likely to be left with a hodgepodge of systems that can not be integrated, resulting in
significantly reduced payback from its technology investments. </p>
<hr width="98%" color="#000000" size="1">
<blockquote>
<p><strong>Author Contact Information:</strong></p>
<blockquote>
<p>Dilip Daswani<br>
President<br>
Enterprise Automation Advisors, Inc.<br>
1670 S. Amphlett Boulevard, Suite 307<br>
San Mateo, CA 94402<br>
</p>
<p>(650) 655 2060 tel | (650) 655 2057 fax<br>
<a href="mailto:[email protected]">[email protected]</a></p>
</blockquote>
</blockquote>
</td>
</tr>
</table>
</center></div>
<p align="center"><a href="daswani.htm#top"><img src="../images/b-t-top.gif" alt="Back To Top" border="0" WIDTH="71" HEIGHT="35"></a></p>
</body>
</html>