Helping UK energy bring down prices

When UK's National Grid Co, the company that balanced the electric power generated with that extracted, needed an IT system delivered fast, they turned to TCS, which delivered in eight months flat.

Gas and electricity in Great Britain are a buyer's market today - a far cry from the UK's first move to privatise the electricity industry. Choosing suppliers is as easy as changing them, just a point-and-click away: shop on the Net, find the best deals and terms. And register.

UK Minister for Europe Peter Hain

Competition, moreover, has delivered considerable savings. The average electricity customer saves between £20 and £35 a year, while the gas customer on a standard tariff can save up to £70.

The revolutionary system was launched as the New Electricity Trading Arrangement (NETA) on 27 March 2001 by UK Minister for Europe Peter Hain, then the nation's energy minister.

NETA operates on the "balancing mechanism" principle. The framework embodies fundamental reforms in electricity trading and purchase, allowing companies to contract competitively in the forwards and futures markets.

Implications of the "balancing mechanism" principle

In 1990, UK-based National Grid Co (NGC), a wholly owned subsidiary of London-based National Grid Group plc (NGG), won a bid from the UK government that made it sole licensor for electricity transmission across England and Wales. In this territory, NGG owns and operates some 7,000 route-km of 275 kV and 400 kV lines. NGG, with 2001-02 operating profits of £875 mn and an annual turnover in excess of £3.8 bn, is an FTSE 100 company that builds, owns and operates complex electricity, gas and telecommunications networks around the world.

NGC, the subsidiary, took on the task of continuously balancing the electrical power supplied by generating units and other network connections on the high-voltage power transmission grid with the power extracted by distribution companies, large industrial customers and others. As system operator, NGC had the mandate to accept bids and offers from market participants in real time, match electricity supply with demand on a continuous basis and ensure power system health, security and supply quality. NGC would keep tabs on power generators who failed to honour their stated positions. Its statutory duty was to develop, maintain and operate an efficient and economical system of electricity transmission. Involving responsive, 24/7 high-quality service to generation and distribution companies and large industrial customers, NGC's role was crucial.

But, under these new market dynamics, NGC would need a centrally administered, long-term, reliable, consistent and up-to-date system to collect and archive balancing mechanism data for analysis and decision support. At the time, however, NGC's legacy MIS ran on an array of standalone databases that sat on a range of platforms and were costly to manage, maintain and support. A solution would have to be built around a nationwide economic data warehouse (NED).

National data warehouse system brings significant savings

NGC needed an experienced system integrator to deliver a Web-based solution that dovetailed the best packaged products with a data warehouse. The software system would need to capture and archive user data, process these overnight to offer a single, comprehensive, query-driven, user-customisable online view and allow easy and secure deployment. All this would have to be done for a huge customer base spread over 151,000 sq. km.

NGC needed an IT system delivered fast, and one that would be foolproof.

In April 2000, NGC and TCS signed up for the system integration contract. TCS carried out the work from Birmingham, UK and Mumbai (formerly Bombay), India. In eight months flat, TCS designed, implemented, integrated and customised a raft of heterogeneous products from Sun, Oracle, FAME, Cognos and Microsoft to create a system that, today, has brought down wholesale electricity prices by 40%, as compared with when the reforms were first announced in 1998. The TCS-engineered NETA system has pushed generation costs - which make up the lion's share of a typical consumer's bill - lower than ever before.

Users today access this unified view through a Web browser over corporate intranets. Analysis results are displayed as standard tables and graphical trend reports, interactive user-defined queries and interactive multidimensional views. More than 1.5 mn records, spanning more than 400 distinct data items, are collected daily. These include submissions by participants of intended forward positions, bid and offer prices and volumes, commercial contracts and actual operational metered values. Information is routinely refreshed from a central database every half hour, with critical business data updated every minute for closer scrutiny.

Top-of-the-line technology

TCS selected a 3-tier Sun Solaris/Veritas-based, multi-terabyte Oracle 8i data warehouse that offers maximum performance, flexibility and backup. The solution's Cognos components - UpFront for the Web portal and PowerPlay and Query for data extraction - contribute efficient, easily deployable business intelligence features. The FAME database management system allows time-series analyses. The ASP applications are seamlessly executed on the Microsoft Web servers. And the Compaq NT servers make hosting the Web interfaces secure. Said Ranjan Mohanty, the TCS project manager: "The product mix of the NETA system resulted in eminently scalable servers, reliable integration support and hassle-free upgrading of system components."

In addition to developing the software for the NETA system, TCS selected, purchased, installed, deployed and tested the hardware and software. It also devised a backup and recovery strategy, organised training for users and developers and is maintaining the system for 3 years to ensure that NGC's systems work like a breeze. The system, designed to hold data for 3 years, can be scaled up to handle 7 years' data.

Source : TATA

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