Collaboration at Work - Supporting one of the World’s Most Successful Deregulated Retail Utility Markets
“Since 1998, Capgemini has provided a consistently high standard of SVA Operations services and its tender demonstrated an ability to maintain this at a reduced cost” ELEXON spokesperson
- Industry
- Energy, Utilities and Chemicals
- Region
- UK
- Solution
- Applications Management
- Business Intelligence
- IT Outsourcing
- Transformation Leadership
The Situation
Introduction of electricity competition for UK residential customers in the late nineties posed significant challenges. Previously, only the largest 50,000 enterprises selected their supplier, each with a meter measuring consumption in half-hour cycles. New market arrangements allowed over 20 million customers to choose their supplier, and removed the mandatory half-hourly measurements. New systems and procedures were needed to support the much larger number of customers and to use load-profiles to estimate each customer’s consumption in individual half-hourly periods.
The industry selected Capgemini to develop and run the new processes over a 4-year contract, extended by four annual renewals since. Capgemini was responsible for processes to calculate daily wholesale payments due from each supplier for electricity used by its customers. When new electricity trading arrangements were implemented in 2001, Capgemini continued as the Supplier Volume Allocation Agent (SVAA) to process consumption data provided by suppliers and allocate correct volumes of electricity taken from the transmission system.
ELEXON, the Market Operator, undertook a competitive re-procurement of services in line with EU procurement directives. The result: Capgemini was awarded the contract for a further four years.
The Solution
The combination of high-quality, timely and adaptable services with a progressive reduction of costs made for a compelling proposition. Capgemini worked at the heart of the trading arrangements to:
· successfully manage the initial project to implement and prove services prior to the start of new trading arrangements
· develop and deploy sophisticated data marshalling and performance reporting tools to support the operational service
· support the core operational team with specialist staff providing technical support, database administration and help desk services
· participate in resolution of settlement issues and provide presentations and training to market participants in the settlements process
· seamlessly deliver Applications Management, Infrastructure Management, Consulting and Project services via a dedicated team.
Business continuity is of critical importance to ELEXON - the Capgemini service includes effective, fully tested disaster recovery to ensure this.
The Result
Capgemini has consistently delivered on time. It has adapted the service by partnering with ELEXON’s service and change delivery teams to meet changing industry requirements. After the Regulator opted to phase the deregulation timetable, Capgemini facilitated operation of a ‘dual market’ to allow a gradual transition of electricity companies into the competitive market.
The new SVA Operations contract provides a number of additional benefits to ELEXON and the industry. These include planned improvement, a more comprehensive contract management regime, and further development of services like an extension of the SVA Operations services to Scotland that added two new geographies to the allocation process. The new contract absorbs costs of extending services to Scotland.
How ELEXON and Capgemini work together
Under the Balancing and Settlement Code (BSC), electricity suppliers ensure metering, collection, processing and submission of consumption data into settlement. These obligations are met by appointment of Agents (like the SVAA) accredited under the BSC. ELEXON as the Market Operator ensures that systems are in place to implement rules and facilitates governance of the balancing mechanism and imbalance settlement processes in Great Britain.
Capgemini and ELEXON have worked closely together from the very outset to develop processes to ensure validity of data calculation of wholesale electricity volumes, their timely receipt together with distribution of outputs to participants. In addition, the service includes:
- production of daily demand profiles for different types of customer based on factors such as noon temperature, sunset time, etc.
- management of Market Domain Data, including interfaces to 50 market participants
- business services, including assessment of changes to trading processes and problem management
- technical services, including evaluation and impact assessment of technology change on processes, applications support and development
- a national help desk
- hosting of the infrastructure in a Capgemini Data Centre.
The service demands very close levels of collaboration. The industry processes are subject to continual change — ELEXON and Capgemini ensure that SVA processes remain aligned.
“Capgemini has proven its ability to deliver and maintain a robust and reliable system to enable the central allocation of energy volumes, and their associated costs, to Suppliers. The new contract will deliver our commitment to achieve year-on-year cost reductions for the industry without compromising the benefits of a reliable and experienced Service Provider”.
Brian Saunders, Chief Executive of ELEXON
