Case Study: Contigo - Delivering outstanding returns for Scotia Gas Networks using Xpress-MP

Summary

Energy Industry IT experts Contigo’s implementation of an integrated Auction Management System is positioned to deliver Scotia Gas Networks significant benefits. Delivered to time and budget, simulation testing has shown the system will deliver a positive return in investment in the first year of operation.

Background

Interruption Reform changes the way the UK gas industry regulates demand on days where there is more gas needed than can be supplied. Previously, large commercial sites with the capability to interrupt their gas supply received a discount on their Transportation fees by nominating the supply point as Interruptible. The new regime, which starts on 1st October 2011 with the first auction in June 2008, introduces a yearly auction process, allowing sites to bid for interruption rights for up to five years.

Scotia Gas Networks (SGN), the UK’s second largest gas transporter, are at the forefront of the changes. As a transporter, they are responsible for delivering the gas to the customers supply point, and they must manage their networks to ensure all firm (non-Interruptible) customers are supplied, even during the coldest weather.

SGN were faced with the complex task of having to analyze their forecast demands for the next eight years. They needed to select the right combination of bids to meet the required demand, in the most economic and cost effective manner. The numerous file interfaces with xoserve, the gas industry sites and meters administrator, had to be managed, and there was also a need to maintain an audit of actions taken.

The approach

SGN engaged Contigo to write the software to manage the whole auction process. Contigo used their combined expertise of energy industry knowledge, rapid software application development approach, proven Jazz Framework libraries, and Xpress-MP 2007B from Dash Optimization, to develop a solution to handle the entire process in a single, integrated Auction Management System (AMS).

The team at Contigo understood that the business optimisation process was the key component that had to tackled early in the development process. The Contigo and SGN teams worked closely to define the business rules, and Contigo developed an auction model using Xpress-Mosel.

As part of the initial work, SGN created a mock auction covering a fictional 5 year auction process, and generated a series of bids which were then manually assessed . "We thought we had picked a good combination of bids to meet our needs, the challenge was to see if the AMS optimiser could do any better", said David Simpson, LTS Commercial Officer at SGN. The first optimised run, covering the first year of the auction, produced a saving of 28% against the best manual profile. Years 2 and 3 produced savings in excess of 37% each. Over the five year mock auction, the optimiser’s results saved £595,000 compared to the manual process.

Once the model was completed, this was seamlessly integrated into the main ASP.Net application, using the .Net wrapper included as part of Xpress-MP. The users operate the entire system through a single web-browser management application.

About Contigo

Contigo provide specialist software application development exclusively to the energy industry. Their .Net development capability delivers enterprise strength custom solutions quickly and reliably. For more details on how Contigo can quickly deliver your business optimisation, visit http://www.contigo.co.uk.