Energy Market Unbundling

8th German African Energy Forum 2014
13.-15. April 2014 Hamburg
Energy ICT – Innovative ICT Solutions for the
Energy Sector in Africa
Hamburg, 15.04.2015
Energy ICT – Innovative ICT Solutions for the Energy
Sector in Africa
The Panel setup, Agenda
Moderation
SAP, Fritz Schwarzländer
Energy market unbundling and liberalization in the EU –
Applicable for Africa?
Panelists and breakdown topics/examples
T-Systems
Rolta
Helena Herselman
Pankit Desai
Flexible Smart Metering with
a Focus on Pre-Paid
Solutions for the African
Market
Driving business
outcomes through
Operational Excellence for
the Energy Sector
© 2014 SAP AG. All rights reserved.
2
8th German African Energy Forum 2014
13.-15. April 2014 Hamburg
Energy ICT – Innovative ICT Solutions for the Energy Sector in Africa
Energy market unbundling and liberalization in the EU –
Applicable for Africa?
Fritz Schwarzländer, Industry Advisor Utilities, EMEA/MEE
Hamburg, 15.04.2014
Agenda
History of Unbundling and Market Liberalization in the EU
Existing Models, Lessons learned
Common Characteristics & Requirements, Trends
Applicable for Africa ?
SAP Offerings for Market Liberalization and Unbundling
© 2014 SAP AG. All rights reserved.
4
History of Unbundling and Market Liberalization in the EU
History of Legislation for the Internal EU market
The liberalization of the energy market in the EU started in 1996 with
the Directive on the electricity internal market 96/92/EC followed by
the corresponding gas directive 98/30/EC in 1998 (" the 1. Package")
This was followed by the so called "Accelaration Directives" in 2003:
2003/54/EC for electricity and 2003/55/EC for gas
Ending up so far in the "3th package" today consisting of 5 directives/
regulations:
•
•
•
•
•
ACER Regulation (EC) No 713/2009
Electricity Cross-Border Regulation (EC) No 714/2009
Gas Cross-Border Regulation (EC) No 715/2009
Electricity Directive 2009/72/EC
Gas Directive 2009/73/EC.
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6
Laws and Regulations within the Utility Industry Result in
Identical Requirements, but Different Solutions
Energiesparverordnung
(EnEv)
Example Germany
Gesetz für
den Vorrang
Erneuerbarer
Energien
(EEG)
Einstieg in
Ökologische
Steuerrefor
m
Neufassung
Gesetz zur
EnergiewirtFörderung der
schaftsgeset
Kraft-Wärmez
Kopplung
(EnWG)
Stromsteuergesetz
Stromeinspeisungsgesetz
Dritte
Wärmeschutzverordnung
1991 1992
1995
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Anpassung
Mineralölsteuergesetz
1998
1999
Nationales
Programm zur
Reduktion von
Luftschadstoffe
n
Erste Novelle
EEG
Niederspannungsanschlussverordnung
(NAV)
Anreiz-
Gesetz über
Meter
Gesetz zur
den Handel mit
Operator
regulierungs
Erhaltung,
Berechtigunge
(IDEX-GM)
Modernisierung
n zur
verordnung
und Ausbau
Emmission von
(AregV)
Gasgrundder KraftTreibhausversorgungs
Wärmegasen
-verordnung
Kopplung
(TEHG)
(GasGVV)
(KWKG)
Erste Novelle
KraftwerksEnWG
NetzanschlussDynamic gas
consumption
Änderung
-verordnung
billing
(G685)
MineralölNovelle
(KraftNAV)
steuerEnergieAtomgesetz
gesetz
steuergesetz
Gesetz zur
Zweites (EnSTG)
Änderung
Fortentwicklung
Gesetz zur
Mineralölder
Neuregelung
steuerÖkologischen
des EnSTG
gesetz
Steuerreform
Novelle
Heizungsanlage
nverordnung
Mineralölsteuergesetz
Erste Novelle
EnEV
Niederdruckanschlussverordnung
(NDAV)
Stromgrundversorgungs
-verordnung
(StromGVV)
2000
2001
2002
2003
2004
2005
2006
2007
2009
2010
Quelle:
BMWi (2008)
7
The progress of Unbundling in the EU
From 1.7.2007
Status quo 2003
Forms of unbundling
Accounting-related
unbundling
Information-related
unbundling
Organizational
unbundling
Managementrelated unbundling
Legal unbundling
Organizational implementation
Holding
Distributor
Supplier
Holding
Distributor
Supplier
Holding
Distinguish from
Accounting and yearend closing of
divisions
Information within an
organization
Distributor/Supplier
Departments within an
organization
Holding
Distributor Supplier
Organization and
decision management
Holding
Supplier
Distributor
Companies for different
divisions
Property rightsrelated unbundling
Owner of divisional
company
Degree of unbundling
State intervention
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8
General Situation in the EU today
The markets for commercial and industrial customers (C&I) are all open; for
household customers to a very far extend. Germany also has liberalized metering
(also UK and NL to some extend)
The switching rate – the activity of the markets – is completely different mainly
due to still regulated prices for household customers (57% of all households in
the EU) and still missing detailed rules for market communication in some countries.
The rules for market processes and communication differ from country to
country. There is only one common approach among the members of the ebIX-group
but with different implementation per country (only CH is using 100% „pure“ ebIX).
Only the nordics countries decided to harmonize their rules so far (until 2015)
© 2014 SAP AG. All rights reserved.
9
„Going live“ of Liberalized Markets
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10
Levels of Switching Activity 2012
Classification of retail market
According to VaasaETT
Classes of Switching rates
Dormant <1%
-Cool
Active 1-3 %
Active 3-7%
-Warm
active 8-14%
Hot>15%
-Super
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hot >20%
11
Existing Models, Lessons learned
How the Utilities World is Changing…
Understanding Unbundling I
Dimensions
• Processes (e.g. change of supplier, billing of grid usage, balancing)
• Communication (intra- and intercompany, network processes, communicationhubs)
• System architecture (1 and 2 contract models, split clients, split systems)
• non discriminating access to data, compliance, regulatory reporting
Different extend of unbundling per country
• account-, informational/ organizational-, legal-, ownership unbundling
• deminimis rules
Concerned Market roles/-participants
• Supply, Distribution, Transport, Metering, (Generation)
• liberalized / regulated and non regulated lines of business
© 2014 SAP AG. All rights reserved.
13
How the Utilities World is Changing…
Understanding Unbundling II
Different national stages of maturity concerning processes and
communication
• weak, e.g. Italy (no elaborated standards for processes, minimum
dataexchangeformat = csv; currently under way to build a clearinghouse)
• elaborated, e.g. Germany (mandatory standard process descriptions for most
relevant processes and corresponding dataexchange messages – EDIFACT)
• high sophisticated, e.g. UK (300 processes and corresponding data formats)
Different approaches to communication and process execution
• peer to peer (or network with new market roles) in most countries
• first countries with central market systems (usually not enforced by regulator, but
set up by an association of utilities). Countries differ strongly in their coverage of
tasks
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14
Level of complexity of market requirements in comparison
SAP’s point of view
lower
IDEX-AU Austria
IDEX-CH Switzerland
IDEX-NL Netherlands
IDEX-IT Italy
IDEX-SK Slovak Republic
IDEX-GE/GG Germany
IDEX-ES Spain
IDEX-CZ Czech Republic (Clearing house)
IDEX-UK United Kingdom
higher
© 2014 SAP AG. All rights reserved.
15
European influence on Energy solutions
Expectations on the Harmonization Roadmap
Long-term outlook
Mid-term outlook
today
(according to ERGEG)
1 ~ 10 years from now (est.)
~20 years from now (est.)
time
ERGEG’s 8 Regional Markets (currently only Electricity)
© 2014 SAP AG. All rights reserved.
Northern
South West
Baltic
UK & Ireland
Central East
Central West
Central South
Liberalization Hub
(Connecting markets)
16
Harmonization challenges
According to ebIX Organization
Several bodies are involved in making e-business standards in the
European energy market
The rules, legislation, organization and level of deregulation differs
between countries and regions
Complex and changing business processes
Cooperation across boundaries:
• Electricity and gas
• Whole-sale (upstream) and retail (downstream)
Moving towards ONE European energy market
Special planning requirements for electricity
Huge data volumes
© 2014 SAP AG. All rights reserved.
17
Standardization at EU level – The ebIX organization
National
ebIX groups
ebIX, EFET and ENTSO-E
Harmonisation group
Eurelectric/ebIX
Liaison group
EMVR
National
projects
ETC
EMD
CuS
EMVR
Observers:
Austria
Bulgaria
Estonia
Finland
France
Greece
Nord Pool
Members:
Belgium
Denmark
Germany
Norway
Netherlands
Switzerland
Sweden
ETC
CuS
EMD
New meber in 2010:
Slowenia
ebIX Technical Committee
ebIX Exchange of Metered Data project
ebIX structuring of the energy market (Customer Switching) project
ebIX and ETSO Metered Value Report project
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18
ebIX, EFET and ENTSO-E
Harmonized Role Model
1.
2.
3.
4.
Harmonization of vocabulary
Definition of terms
Identification of roles and domains
Shows responsibilities
Identification of geographical
and functional
domains
Identification of
Roles of actors
© 2014 SAP AG. All rights reserved.
19
Harmonization: The Example of the Nordic Market
NordREG has formulated its vision for
development of electricity markets:
Objective of the Nordic end-user market
integration is:
All Nordic electricity customers will enjoy
a free choice of supplier, efficient and
competitive prices and reliable supply
through the internal Nordic and
European electricity market.
The roles and responsibilities of different
market actors and the processes
between them are adequately
harmonized in the Nordic countries to
make it smooth and feasible for the
suppliers to start operating also in the
other Nordic countries. Also the
framework of customer empowerment
should be adequately secured so that
the customer can buy electricity from any
supplier with a confidence.
(Source: NordREG publication)
© 2014 SAP AG. All rights reserved.
20
Harmonization: Nordic Market Principles
Definition of the market model
Definition of the processes
Contracts between the market participants (including also customers)
Involved processes
•
•
•
•
•
•
•
•
Creating and ending contracts
Billing
Supplier switching
Moving
Balance settlement
Metering
Information exchange during supply
Access to customer data
© 2014 SAP AG. All rights reserved.
21
Common Characteristics & Requirements, Trends
Prerequisites for Competition and a Functioning Retail Market
Unbundling (up to legal unbundling) across the value chain including
separation of retail and distribution (so far the case in EU with a few
exceptions regarding retail and distribution)
Clear definition of roles and responsibilities of market roles and market
participants (a task for the regulator)
Clear codes / decrees on (a task for the regulator) for
- Grid access
- Grid fees
Clear definition of market processes and relevant (automated) market
communication (data formats, use cases - a task for the regulator)
© 2014 SAP AG. All rights reserved.
23
IT Solutions for Liberalized Markets
… cover the communication between (deregulated and regulated)
market participants, such as the communication between Retailer,
Distributor, Meter Operator etc. – aiming at national legal compliance
towards:
• message formats
• the market communication process
… over the process management
• message-triggered processes such as change of supplier, move-in, move-out, device
disconnection, distributor invoicing, supplier payments etc.
… maximize the automation of market message processing, so that
the Utilities‘ call center staff can be minimized and can concentrate on
working on the message exceptions only.
© 2014 SAP AG. All rights reserved.
24
Example market setup (roles and market participiants)
Supplier
mp
Point of
delivery
Party
Connected
to Grid
Balance
Responsible
Party
Balance
Supplier
Trade
Responsible
Party
DGO
Metering
Point
Admin
Grid
Access
Provider
Grid Operator
“meter operator”
Meter
Administrator
Meter
Operator
Register
metering
Metered Data
Responsible
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Metered
Data
Collector
service
Meter
Metered Data
Aggregator
25
Example process
Change of Supplier
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26
Typical Business Processes Across Roles
Contract Management




Quotation
Change of Supplier
Move-in / Move-out
Customer / Contract Change
Start of supply / End of supply
Technical Services
 Quotation processing (triggered from
Supplier)
How often does the
regulator change
the rules?
Meter to cash
 Meter reading result transmission
 Distributor invoice
Grid usage
billing
 Supplier payment
 POD technical changes
Energy Settlement
 Device Exchange
 Forecasting (Supplier)
 Disconnection / Reconnection
 Profile Aggregation (Distributor)
request
 Other master data changes
Smart Meter
 Other service requests Internal processes
 Tariff table setup
 Error management
 Disconnection /

(Process)
Monitoring
Reconnection
Regulatory reporting
 Statistical / history reporting  Other home automation
services
© 2014 SAP AG. All rights reserved.
27
Trends in Grid Usage Billing
Country Analysis
Consumption based
(S)
Legal Invoice per PoD
Legal Invoice per Retailer
 The DSO sends
for each point of
delivery a bill to
the retailer
 Calculation
details on PoD
level
A
 Tax statement
on Retail level
B
P
D
F
IRL
2009
 Billing details on
PoD level
NL
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GB
SK
NL
Capacity based (Fixed charges only)
 Calculation on
aggregated
consumption per
PoD group
 Calculation on
aggregated
number of PoDs
per capacity
class
2012(?)
NL
28
Trend for Clearing Houses
Reduction of Complexity
OTE, Czech Republic
Emix, Sweden
Nubix, Norway
ESDN (ECH), NL
MRSO, Ireland
“energinet”, DK
“DCC”, UK
Belgium, Atrias (planned)
Italy (in implementation)
Poland (in preparation)
Germany (rising hub discussion – SM-Gateway)
NEMMCO Australia
Texas
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29
High level Functionality of a Clearing House
“Generic max. Approach”
The staggered elements of a Clearing House in general
Allocation
Settlement
Reconc.
(Infeed)
(Data preparation)
Consumption
Grid fee
(calculation only)
Meter data
Energy Data Management
Metering Point
Administration
Structuring
(CoS, Move..)
(PoD, Device, Customer,
Supply Szenario …)
Analytics, Statistics, Business Intelligence
© 2014 SAP AG. All rights reserved.
30
Customer Example Architectures
System split
Variant 1:
Integrated System R/3 – IS-U
1 System, 2 Clients
SEM/ BW (CORE)
CRM
BW (IS-U) REG
BW (IS-U) VSG
SAP-System
Mandant LIEF
Kommunikation
zwischen
Marktpartnern
IS-U
SEM/ BW (CORE)
CRM
BW (IS-U) REG
SAP-System LIEF
Mandant NETZ
Lieferant – BKRS
YYYY
Variant 2:
Integrated System R/3 – IS-U
2 Systems
IS-U
SEM/ BW (CORE)
Kommunikation
zwischen
Marktpartnern
IS-U
BW (IS-U) REG
Mandant LIEF
Mandant NETZ
Lieferant – BKRS
YYYY
CRM
Netz – BKRS XXXX
BW (IS-U) VSG
Core + IS-U-System
SAP-System NETZ
Mandant LIEF
Netz – BKRS XXXX
BW (IS-U) VSG
Variant 3a:
Integrated System R/3 – IS-U
1 System, 2 Clients, Core in LIEF
Mandant NETZ
Buchungskreis
Lieferant YYYY
Buchungskreis
Netz XXXX
Kommunikation zwischen
Marktpartnern
IS-U
IS-U
IS-U
Minimal-Core
FI
FI
FI
FI
FI
Logistik-Module
Logistik-Module
Logistik-Module
Logistik-Module
Controlling
Controlling
Controlling
Controlling
Buchungskreis
Netz XXXX
FI
Logistik-Module
ALE - Schnittstelle
Logistik-Module
Intercompany Abbildung
Variant 4:
Separated System R/3 – IS-U
2 Systeme, 3 Clients
SEM/ BW (CORE)
CRM
BW (IS-U) REG
BW (IS-U) VSG
Variant 5:
Separated System R/3 – IS-U
2 Systems, 4 Clients
SEM/ BW (CORE)
IS-U – System
Mandant LIEF
IS-U
Minimal Core
CRM
BW (IS-U) REG
IS-U
Kommunikation
zwischen
Marktpartnern
Minimal Core
Mandant LIEF
IS-U
Minimal Core
ALE - Schnittstelle
ALE - Schnittstelle
Core-System
Core-System
Mandant LIEF
Mandant Core
Netz – BKRS XXXX
FI
Logistik-Module
Logistik-Module
SEM/ BW (CORE)
Controlling
© 2014 SAP AG. All rights reserved.
Lieferant – BKRS
YYYY
FI
CRM
BW (IS-U) REG
BW (IS-U) VSG
Core + IS-U-System
Mandant NETZ
Kommunikation
zwischen
Marktpartnern
BuKr-übergreifendes
Controlling möglich
Variant 6 (3b):
Integrated System R/3 – IS-U
1 Systems, 2 Clients, Core in NETZ
IS-U – System
Mandant NETZ
Lieferant – BKRS
YYYY
FI
BW (IS-U) VSG
Controlling
IS-U
Minimal Core
Mandant NETZ
Buchungskreis
Netz XXXX
IS-U
Mandant LIEF
Kommunikation zwischen
Marktpartnern
Buchungskreis
Lieferant YYYY
IS-U
Minimal-Core
FI
Mandant NETZ
Netz – BKRS XXXX
FI
Logistik-Module
Logistik-Module
Controlling
Controlling
Logistik-Module
Buchungskreis
Lieferant YYYY
FI
ALE - Schnittstelle
Logistik-Module
Intercompany Abbildung
Controlling
BuKr-übergreifendes
Controlling möglich
31
Applicable for Africa ? (Authors view)
Unbundling of Transmission – Yes, as an independent grid access provider and
system operator
Unbundling of Generation – Yes, to attract foreign investors also approach on
VPP’s for renewables could make sense.
Unbundling of Distribution (incl. retail) –
 Partial / remaining part as a consequence – not competitive (regional, regulated monopole)
 Depending on market structure, reasonable sizes are required for appropriate grid
maintenance. In some case mergers or shared services might work better
Unbundling between Distribution and Retail – definitely no, may be in some
countries in 10 years
Unbundling of Metering – no (even for EU – complexity too high)
© 2014 SAP AG. All rights reserved.
32
SAP Offerings for Market Liberalization and Unbundling
• SAP Utilities Competence Center
• IDEX Country Solutions
• Add-Ons for Liberalized Markets
• Clearing houses
•
System Landscape Optimization team (SLO – Unbundling architecture)
•
Regulatory reporting
Thank You!
Contact Information:
Fritz Schwarzländer
Industry Advisor Utilities
SAP Deutschland AG & Co. KG
Hasso-Plattner-Ring 7
69190 Walldorf
eMail: [email protected]
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