Norbert Vierheilig,Siemens AG, Nuremberg, Germany Maximilian Urban,Siemens AG, Vienna, Austria

With the introduction of deregulation in the energy markets all over the world, utilities are being forced to dramatically cut costs. Productivity enhancement is therefore key, and new IT solutions can help to improve business processes and maximise synergies for cost reduction.

To become fast and flexible in a competitive environment, utilities need IT solutions covering not only one specific task but supporting complete business processes. Many of these business processes need more than one IT system, so utilities need integrated IT solutions to increase their productivity.

The deregulation of the energy markets also causes structural changes in the utility world. The traditional vertically organized utilities have had to unbundle their operations in the areas of generation, transmission, distribution and supply. But the electricity value chain remains principally the same in spite of these changes. In modern deregulated times the value chain is covered by separate companies for generation, transmission, distributionand supply.

In some areas in Europe the bilateral trading activities are intensive, so market players look for a liquid market place to cover a part of their deals. Thus a price index is generated, which can also be used in bilateral negotiations. In other areas, an independent system operator (ISO) has been implemented that runs the market.

It is the responsibility of transmission companies and ISOs to enable competition among the generation companies by providing non-discriminatory access to the transmission facilities, ancillary services and a secure system operation. The distribution companies have to guarantee free access to the network to promote the competition on the supply side. In order to accomplish their new challenges, these utilities need new IT solutions and new software applications.

An American ISO

Figure 1 shows an overview of the IT solution and applications provided for an ISO in the USA to support its business processes. The backbone of this IT structure are its ICCP links (inter control centre protocol) to all control areas.

The open access same-time information system (Oasis) is the information hub between the ISO and its transmission customers, transmission providers and ancillary service providers. It is used to submit transaction requests to the ISO, receive approval of transactions from the ISO, post available transmission capability (ATC) values and tariffs, and provide data for energy accounting. The Oasis interfaces with the ATC calculator. Oasis also provides interfaces to COP (current operating plan) and ICCP for accessing approved transmission reservations and ancillary service requests. In addition, the scheduling and accounting system may retrieve data from Oasis for further processing to fulfil accounting functions.

This set of real-time and study applications is a traditional set of tools to analyse power system security conditions. A new set of applications has emerged in the deregulated environment, for example Siemens’ ATC calculator (Figure 2).

The ATC function is a scheduling function, i.e. it determines the schedule of ATC values for the predefined transfer interfaces and a predefined time range. In this particular case, the transfer interfaces are made up by source-sink combinations that assign a subset of ATC zones to source and sink respectively. The time range is set to an hourly schedule for the next week, a daily on/off-peak schedule for the next month and a monthly on/off-peak schedule for the next year.

The ATC calculation features two options that can be selected individually for each source-sink combination. The first option is the linear ATC (LATC) function which is based on power transfer distribution factors (PTDF) for preselected monitored branches. The LATC function is able to consider thermal branch ratings limiting the ATC value. The second option is the continuation power flow (CPF), which is able to consider thermal branch ratings, voltage limits and even the voltage collapse as limiting constraint determining the ATC value.

Either approach includes contingencies that are evaluated for ATC calculation in addition to the base case. Although the LATC function is based on a linear network model, its calculated ATC values are accurate enough as long as the ATC value is limited by thermal branch ratings. Both approaches consider a power transfer based on load increase or generation decrease in the sink zone.

Supporting competition

In the new deregulated environment, a transmission company needs to conduct its business process by facilitating transmission and ancillary services. This functionality is primarily supported by transaction management systems. Siemens Sinaut Spectrum tran$mart addresses these needs. tran$mart is fundamentally a scheduling function with a data repository based on Oracle database and Oracle forms UI, designed to manage energy market contracts, implement transmission tariffs, facilitate electronic tagging and enhance the scheduling of energy related products. tran$mart supports several transactions:

  • Transmission service transactions
  • Ancillary service procurement
  • Traditional energy transactions.

The transmission company needs to share the above information with transmission customers, ancillary services provider, power marketers, etc. Those needs are met by providing interfaces to:

  • External scheduling sources, e.g. market operation systems
  • Scada/EMS systems
  • Accounting and billing systems
  • Energy trading systems
  • Web-based remote access.

tran$mart’s scheduling functionality is a versatile tool providing the user with great flexibility in providing all scheduling tasks.

Other applications are also becoming mature enough for use in real-time environment for evaluation of system security. These functions are voltage stability analysis (VSA) and dynamic stability assessment (DSA). Also in the new environment, the scheduling of generation is a function of the energy market. If the established business process is limited due to network congestion, then it is necessary to reschedule generation to alleviate congestion. Rescheduling can be performed, either by an optimal power flow (OPF) based tool or a transmission loading relief (TLR) procedure that closely reflects the ISO business process. Since the value of the PTDFs measures the impact of a power transfer on a branch, they can be used for congestion management. PTDFs can be calculated for:

  • Requested, approved, scheduled or already dispatched transactions with given points of delivery and receipt
  • Power transfers between source and sink zones as it is done for ATC calculation
  • Base case condition
  • Limiting contingency condition.

For properly chosen conditions, the PTDFs may support an ISO or transmission company in several tasks:

  • If a branch is violated in real-time, the PTDF for the scheduled and dispatched transactions identifies the transactions that are supposed to hold their schedule to prevent further overloading.
  • The PTDFs can identify the transactions that are supposed to be curtailed in order to relieve an existing or expected overload. The PTDFs provide the information on how much a transaction needs to be curtailed to relieve the congestion.
  • The PTDFs of requested transactions can identify those transactions that may relieve an existing or expected overload, so that the ISO or transmission company may prefer those transactions for approval. The amount of line loading relief coming along with this transaction can also be assessed by PTDFs.
  • The PTDFs of source-sink combinations allow an easy pre-assessment of coming up transmission requests, whether they worsen or relieve an existing overload.
  • The PTDFs of source-sink combinations may help the ISO or transmission company in identifying those possible transactions that may relieve existing or expected overloads. This is important in deregulation models, where overloads have to be relieved by the market.

Distribution solutions

Distribution companies that have medium and low voltage grid responsibility as well as contracts with final consumers will face new competitors in the deregulated market place: the energy service companies (EsCo’s). These new players buy energy on a large scale and sell it ‘in pieces’ to the customers without owning generation assets or transmission and distribution lines. The energy is bought on the market either bilaterally or at the power exchange, and after arrangement of the transmission, the energy is delivered.

EsCo’s have a different cost structure compared to a distribution company and are able to put strong downward price pressure on the market. EsCo’s also establish strong marketing and sales departments and a trading floor.

Distribution companies all over Europe divide themselves into a grid department and a very flexible energy service department for sales and marketing. Whereas the distribution grid has the technical and secure medium and low voltage grid in its operational focus, the sales and marketing part of the distribution company is totally customer oriented.

For the grid operation, distribution companies need Scada/DMS (distribution management systems) where the main focus is distribution network analysis and outage management. Due to mergers and cost pressure, the grid area covered by one distribution control centre is increasing. Therefore integrated solutions with geographical information systems (GIS) and maintenance systems can support the operators with needed information. This allows streamlining of the business processes to handle network disturbances and normal network operations.

Current discussions in Europe show that wheeling management is also a very hot topic for distribution companies. The focus is set on handling the large number of customer contracts – residential, commercial and industrial – and the allocation of costs. This requires a very intense interface between control centre systems and meter data management systems.

The energy service departments of distribution companies depend on readily accessible customer information. Today, successfully managing greater numbers of customers and even greater volumes of customer information in the utilities sector requires a completely new way of thinking – a truly customer oriented approach to satisfy the demands of the consumer.

The most fundamental requirements for the customer-driven company in the core utility market are boosting competitiveness and customer orientation through strategic orientation towards existing and prospective customers.

Thus the new customer information systems (CIS) must fulfil the following tasks:

  • Ensure customer satisfaction by putting the customer in the centre of all activities. Customers now expect more information and also a better service delivery.
  • Increase productivity by optimizing the relevant business processes. This enables the utility company to save costs, to increase the service level and also to improve customer satisfaction.
  • Be flexible for adaptation to changing requirements in terms of market, functionality or corporate organization. In future it should be possible to reflect changes directly in the CIS (e.g. new types of contracts with very flexible timeframes).
  • Implement a huge number of different tariffs to become more customer oriented.
  • Bill any kind of services offered from utilities to their customers.

The integration of a CIS with a call centre is another important element. By integration it is possible to show important customer data on the screen during incoming calls. That makes the response to the call competent and efficient.

IT integration


For a network company (NetCo), strict regulations have been introduced with the deregulation of the energy markets. This causes constant re-engineering of the operation to meet the new market conditions. Beside this new definition of internal processes, the integration of IT systems can increase productivity and improve customer service by building solutions which support the complete core business processes.

To compete effectively in a deregulated market a NetCo has to become very efficient and effective in its operation and serving the customers. To achieve this goal, the key point is to manage the information flow as well as its availability at the right places in the company and the accuracy of data across the entire organization. The basic requirement is the integration of various existing and new IT systems in such a way that the information needed by the user can flow from a given system to its ultimate destination without manual intervention. In other words, if the user needs a piece of information and it is not available locally, the integrated solution can obtain this information from the enterprise network.

To facilitate the smooth exchange of this information between systems, a network information server according to Figure 3 can be used. This integration of a facilities management (FM) database, a GIS, a CIS and the DMS allows every piece of data to be entered and maintained only once but is available on all connected systems.

In a deregulated environment utilities have to focus on their profits. Therefore the next step coming up in the market is the integration of the technical and the commercial IT world in the utilities. The necessary solutions for energy trading, booking of transmission capacity as well as the support of complete business processes demand for interfaces between the traditional and new IT applications.

In enterprise resource planning (ERP) systems many utility companies use standard application software coming from software companies like SAP, Oracle, BaaN etc. The business management components such as financial management, cost controlling, balance calculation, asset management or human resources do not differ much from solutions in other industries. But there are sector specific solutions necessary for an optimal support of the business processes within a utility.

All relevant figures regarding the business management situation of the company must be constantly accessible. Flexibility, openness, internet capability and process orientation are the most important requirements for modern ERP solutions.

The integration of an ERP system with the other applications of their IT landscape enables utilities to manage assets through their entire life cycle or to develop products and services that attract and retain customers in a highly competitive market.

Only integrated solutions enable utilities to monitor, plan and develop their business on a new level. Future IT solutions will have to provide up-to-the-minute facts and figures to respond dynamically to the increasing management information demand. An ERP system integrated into the other segments of the IT landscape puts the utility firmly in control of the key business processes.