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A Flexible Market Model for UK Smart Metering

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This white paper, published in 2008 was aimed at stimulating industry debate by outlining the case for a range of common, industry scale functions, AKA ElectraLink\'s Smart Interoperability Portal.

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A Flexible Market Model for UK Smart Metering

  1. 1. A Flexible Market Model for UK Smart Metering White Paper • 1st July 2008
  2. 2. ElectraLink Ltd • A Flexible Market Model for UK Smart Metering
  3. 3. Introduction will be available to support the additional features to ensure that The roll out of smart meters evaluation of a UK smart metering authorised parties can access across the UK SME and residential roll out. In particular industry meter data and functions at various markets is widely expected to cost models for a roll out based stages of operation of the metering deliver a broad range of benefits on existing market structure, and point, relative to appropriate to consumers, Suppliers and regional franchise models, could UK market processes. Meter Network Operators. Much be further refined and assessed. devices must meet a suitable work has been done to date minimum specification to ensure to model the costs, benefits, Consolidating standard smart that meters deployed can provide deployment and technical metering data management the minimum range of functions options of such a roll out. Whilst functions into industry scale foreseen by energy Suppliers and logistical roll out variants and services can deliver economies their customers. However further communications technologies of scale where those functions development and innovation in have been assessed in some would otherwise need to meters and devices should also be detail, the effects of centralised be repeated at each of the promoted to allow manufacturers communications backhaul, data stakeholders. Furthermore to innovate and develop further processing and integration have improvements can be expected value adding services over time. not yet been explored in sufficient in areas of stakeholder to The use of an industry scale Smart detail to understand the impact meter interoperability, dual Interoperability Portal can help these factors may have on the fuel operations, data quality, here; firstly by providing a web strengths and weaknesses of the supply market entry and services portal through which base options. This paper aims competition for services, over Suppliers (large, small or new to stimulate industry debate by comparable fragmented and entrant) can access the standard outlining the case for a range of regional implementations. range of functions available from common, industry scale functions, meters; secondly by providing hereafter referred to as the Mandating a fully managed, or authentication for direct access to Smart Interoperability Portal. The new and replacement cycle the value adding meter functions provision of common functions based roll out might support the and other services where will minimise the overall costs and confidence needed for investment Suppliers choose to commission risks of a UK wide smart metering in industry scale shared services. them; and finally by allowing roll out, and improve the quality The benefits of such an approach multiple technical standards to of data and processes benefiting are likely to be significant and exist between meter and Portal. all stakeholders. The extent to therefore this factor should not be This last point can allow existing which these concepts strengthen overlooked in the evaluation of smart meter deployments to be or weaken roll out options, the roll out options themselves. integrated into an interoperable meter specifications and market environment thus ensuring models should be noted by energy return on current smart metering Suppliers, Network Operators, Interoperability investments. The communications meter manufacturers, metering The need for an efficient Change aspect of the Smart Interoperability service providers, settlement of Supplier process is fundamental Portal is independent of any bodies and government policy to customer experience and communications methodology makers during the next stages operation of the competitive and will support the full range of evaluation and planning for a supply market. The seamless of existing and emerging UK roll out of smart meters to transfer of smart metered sites communications technologies. SME and residential markets. between Suppliers is therefore a By providing Suppliers access key challenge in the preparation through the portal to both for a UK wide roll out. Unlike standard and optional non standard Market Models solutions for AMR roll outs meter functions, the potential By considering the advantages of commissioned in predominantly risks of stifled innovation due to shared and centralised smart meter vertically integrated situations, a ‘lowest common denominator’ functions, further information UK energy markets will require effect can be avoided. 1
  4. 4. Process Improvements from a lack of integration with smart meter data is seamlessly By rationalising smart meter data existing processes, and additional integrated into existing processes, and functions into industry scale operational complexity may the portal could produce the services, the overall risk and cost present a ‘cliff face’ for operations associated meter reading, advance of a UK roll out can be reduced. staff across the industry, and and Supplier purchase files adversely affect the quality required for seamless integration The potential to implement of shared business data. with existing gas and electricity the next generation of market By implementing an industry market processes defined by the processes, business transactions scale Smart Interoperability MRA, BSC and UK Link. During and data types as a function Portal, smart meter functions the period following a UK roll of rolling out of smart meters can be integrated with existing out, the Smart Interoperability is rightly anticipated by many ’Supplier hub’ processes. A further Portal could facilitate a managed stakeholders with a great deal of advantage of this approach is that migration to the next generation optimism. The next generation smart meter roll out is de-coupled of market processes as required. of business processes will require from business process re-design Competitive retail energy markets open standard asynchronous thus avoiding a dependency on in the UK may disadvantage transactions, near real time latency, new processes impacting the a UK smart metering roll out and excellent data quality. These lead time to roll out. Immediate when compared to vertically market processes will support benefits of smart metering data integrated implementations collaborative data sharing whilst such as opening and closing in Italy, France, Sweden and maintaining process efficiency, reads on Change of Supplier, North America, however the quality and security of data. improved billing accuracy and deployment of a shared Smart time of use data, can all flow Interoperability Portal offers a However, the risks of introducing immediately whilst at the same unique proposition that can enable entirely new market processes time avoiding the operational UK markets to access similar in a ‘big bang’ implementation hit of a big bang changeover benefits and employ appropriate are great. Exceptions arising to new processes. To ensure technology whilst minimising Network Smart Operator Meter GSM / GPRS GSM / SMS 3G Communications Interoperability Portal WiMAX Standard XML Web Services LPR DSL PLC ISDN Concentrator WAN Communications Local Communications Figure 1: Smart Interoperability Portal - Communications Interoperability ElectraLink Ltd • A Flexible Market Model for UK Smart Metering
  5. 5. commercial and operational Portal would provide an integrated being the ultimate beneficiaries. risks that might otherwise customer switching process to Bundled services provided compromise commercial synchronise access control and on a regional or national basis and technical architecture. ‘clear’ communications costs would provide less choice, between the parties in line with potentially stifling innovation and existing and future Change competition for these services. Competition and Innovation of Supplier processes. The Central to the case for a Smart same mechanics (Figure 1) will By providing robust Interoperability Portal is the provide energy Suppliers the interconnections to concept of competition at all levels degree of control required to communications Network of end to end smart metering support commercial flexibility Operators, the Portal would service provision. Logistical and in the communications market allow all authorised parties to commercial benefits may be enabling large scale migration of interact with any meter through available to Energy Suppliers if metered sites between Network a range of industry agreed the potential for any ‘lock in’ can Operators. Whilst the treatment ‘standard’ XML web services. be reduced. Suppliers may opt of SIM devices by mobile to buy commercially attractive operators may hamper this in A managed communications bundled services but the market the short term the situation will Portal could also ease the logistics model should support unbundling almost certainly change in future of a UK smart metering roll where it may be required. The and may even be overcome by out by acting as the “common provision of a common platform innovative marketing options in access database for metering would provide a mechanism for the short to medium term. installations” referred to in the energy Suppliers to register a Mott MacDonald Smart Metering metering point and ‘take on’ the Commercial flexibility at all levels Cost Benefit Appraisal Report. meter and its associated services of smart metering service provision under framework agreement will encourage innovation and In addition to providing a standard terms. The Smart Interoperability competition with consumers communications interface a Smart Industry (legacy) process integration Meter data head end systems Authentication and Access Control Smart Meter Meter Data Management Authorised XML Binary data Party Interoperability interoperability XML Web Services Site Meta Data Interval Data Figure 2: Smart Interoperability Portal - Meter Data Management 3
  6. 6. Interoperability Portal would the overall risk and cost of Network Operators, Suppliers, provide the range of common data implementing the UK solution for Metering Services companies and management functions covered smart metering. By adhering to the Data Aggregators, have benefited in the next section of this paper. agreed service descriptions, and from the reliability of the data It is important to emphasise the associated schema, stakeholders transfer network and central data point that the proposed use of can integrate with the portal processing infrastructure (DTN). centralised data management by developing B2B interfaces ElectraLink has established a resources is intended to support, risk free from interoperability reputation for specialisation and rather than replace, distributed issues and vendor ‘lock in’. service excellence in transferring data management functions. It business critical data in a secure, is natural that energy Suppliers Parties accessing the portal reliable and cost effective way. will seek, to differing degrees, services will benefit from low cost ElectraLink has used its core to gain competitive advantage bandwidth and the self describing, delivery capability to deliver through additional layers of data self validating nature of easily further data transfer services to management. However, access re-usable and adaptable XML file its customers in the electricity to consistent source data will formats. On the portal to meter and gas markets in support of provide a sound foundation for, side, device and WAN network their requirements for DUoS and facilitate further distributed volumes are minimised by using e-billing, gas metering, RGMA gas data management. The common binary data protocols, thus saving developments, REMA electricity data management services bandwidth and device resources metering developments and will provide core functionality at the meter and concentrator. improving the customer transfer to support effective market process through the NOSI flows. operation for new entrants and By providing robust links to In addition we have diversified established businesses alike. existing industry processes the our technical delivery capability Smart Interoperability Portal can to include web service design, allow smart metered sites at all development and delivery. Architecture stages of lifecycle to be handled in It is essential that the Smart a seamless way ‘en route’ to the Since 1998, the national data Interoperability Portal is next generation business processes transfer network and central data designed and implemented to when near real time transactions processing infrastructure (DTN) open standards. To meet this and collaborative parallel data has continued to serve the data aim the Smart Interoperability processing will become the transfer requirements of the UK Portal services (Figure 2) are norm reducing lead times and energy industry specified within fundamentally defined and bringing a significant improvement the Data Transfer Catalogue presented as XML web services in customer experience. (DTC). The EDI like, batch based within a Service Oriented transaction file format specified Architecture (SOA). The use by the industry in 1998 has of a SOA will provide the About ElectraLink remained largely unchanged since. commercial flexibility to allow ElectraLink Ltd is 100% owned by the Smart Interoperability the UK energy industry and was In 2004, we replaced the Portal to be procured from, established in 1998 for the specific underlying national data transfer and operated by, a single or task of creating and operating a network and central data multiple service providers. fast, reliable and secure electronic processing infrastructure (DTN). means of communicating data This allowed us to take advantage Being vendor independent, the between participants in the of technology advances since 1998 selection of web services as the competitive electricity market. and the new service provides basis for the Smart Interoperability This requirement was met through users with even higher levels Portal services is a key enabler the establishment of the Data of guaranteed service levels for to integrating stakeholders to Transfer Service (DTS). Since security, availability and speed of the common services available our creation, organisations such data transfer. Users of the DTN at the Portal and hence reducing as Settlement bodies, Distribution are now able to enjoy all the ElectraLink Ltd • A Flexible Market Model for UK Smart Metering
  7. 7. benefits of the most modern electricity market throughout this months ElectraLink will contact networking technologies and time and is enabled to meet the as many industry participants as services, including meshed wide future data transfer requirements possible to discuss the concepts area MPLS network, industry of the UK energy industry. described in this paper. scale Enterprise Application Integration (EAI) platform, Importantly the data transfer Service Oriented Architectures network and central data Contact Us (SOA), and web services based processing infrastructure Please contact Neil Beckwith on standard IP and related (DTN), is not limited to EDI at ElectraLink to discuss any protocols, service discovery and file formats, batch operation or aspects of this white paper description standards including existing business processes. The or to request ElectraLink TCP FTP HTTP/HTTPS, XML, , , technology that is in place today representation at appropriate SOAP WSDL, UDDI, WSDL , can equally support XML, web smart metering events. and XSD. ElectraLink provides services, SOA and near real time centralised industry strength transactions. In addition ElectraLink Neil Beckwith data and transaction processing supports and can de-risk industry ElectraLink Ltd centres and a nationwide data initiatives to reduce the complexity Ground Floor communications network. of existing gas and electricity Grafton House market processes. The goal of 2-3 Golden Square Whilst the DTN has increased ‘next generation’ dual fuel business London its capability and maintained processes is a significant challenge W1F 9HR currency with modern technical and one that should be de-risked standards, since 1998 there has as far as possible. ElectraLink, neil.beckwith@electralink.co.uk been little industry appeal to any our technology partners and the Tel: 0207 4323016 fundamental changes in 1998 data DTN, are ready to help meet Fax: 0207 4323015 formats, business processes and these requirements as soon as Mob: 07876 502333 systems. This disinclination on the our customers identify a need. www.electralink.co.uk part of the industry to migrate to The next stages of preparation more modern data formats and for a UK smart meter roll out near real time business processes should identify that need. is understandable considering the scale of system investments around 1998 and the legacy Next Steps estate that those investments have ElectraLink is committed to created. Despite a lack of appetite supporting and contributing for large changes in the years since to the work of BERR, Ofgem, Smart Interoperability PortalTM is 1998, the gap left has been filled ERA, ENA, BEAMA and other a trademark of ElectraLink Limited. Copyright © 2008 ElectraLink Ltd. by a steady stream of incremental industry led debates on Smart The trademarks referenced herein and changes, and additions to, working Metering. Hopefully the contents marked with either TM or ® belong practices, process maps and of this white paper will help to to ElectraLink Ltd and other trademark data flow definitions held within stimulate industry debate and proprietors. All rights reserved. The information contained in this document the MRA product set, including promote better understanding is intended to be used as a summary the Data Transfer Catalogue of the capabilities of the DTN. for discussion purposes only. It does (DTC). The complexity of existing To ensure that the points made not purport to be comprehensive energy market processes is a here are further debated to or to render advice of any kind. historic accumulation of the fully assess their merits relative 1998 electricity process design, to a UK Smart Metering roll ElectraLink Limited is a company established in England, company incremental change and segregated out, Electralink will welcome registration number 03271981, gas and electricity processes. the opportunity to engage in whose registered address is Ground The DTN has continued to serve all aspects of the smart metering Floor, Grafton House, 2-3 Golden the needs of the competitive debate, and over the coming Square, London W1F 9HR 5

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