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Transmission System Operators (TSO): the core of an Electricity Market

ISO – TSO, what is this?

Electricity Transmission Companies play a key role in energy markets. They are entitled to manage all the High Voltage infrastructure of a territory in order to technically operate the electric network and secure its stability. Additionally, they work closely with the Energy Market Trading Operator to assure the right management of the purchase and sale of electricity on the spot market.  The creation of the Independent System Operator (ISO) or TSO is traditionally the first step towards market liberalisation prior the unbundling (this is the requirement of segregating the activities of electricity distribution and energy supply). This is, for example, the current step taken in Saudi Arabia (KSA National Grid), Lithuania (LitGrid) or Kenia (KETRACO).  However this is not a must: in countries like Germany, the creation of TSO has not taken place until the unbundling process has not finished.   Trend is to consolidate the TSO role in a single company per country as it occurred recently in Switzerland with the creation of a single country TSO, Swissgrid, from the merge of all the high voltage assets (netork and substations) from the different country energy companies. In Spain, for example, with REE (Spain National Grid) was created each of the country energy companies were entitled with a 10% of the shares of the company in order to assure the fair activities of the company.  SAP has had a close
relationship with TSOs. Besides placing as references the largest worldwide TSO:   China State Grid and the Federal Grid Company of Russia  SAP application portfolio is largely used by TSO across Europe, Middle East and Africa mainly grouped in the European Network of Transmission System Operators for Electricity (ENTSOE)
and the  GCC (Gulf Cooperation Council, ). 


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Summary of Business Processes performed by a TSO

Characteristics of a TSO


What makes special an  Energy Transmission Company?. Think about what is necessary to manage and operate an electricity network in a large territory: 


  • Own property, plants or substations, technical equipments and assets valued in 100s of Millions or Billions €
  • Control and operate Third parties’ Generating capacity, including renewables
  • 1000s of Km of high voltage Transmission lines
  • 1000s of Substations and Transformers
  • Social Impact in the day life of Millions of customers
  • Extend across large territories
  • Large amount of Tools, vehicles, spares

Above all these concepts, mainly supported with the traditional SAP ERP Suite application and analytical portfolio,  is the Increasing sophistication of Energy monitoring, forecasting and balancing tools for the network operations. Adoption of Smartgrid technologies, bring the capacity to understand real time the energy flows (forecast) and  operate remotely these flows in the network (balancing)  as well as enable to integrate the new energy production sources (renewables) are the current projects going on at ISO – TSO organisations and SAP is collaborating in building and standardizing these new generation platforms.  This is Co-Innovation.

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California ISO (TSO) Control Panel for Situational Intelligence as provided by SAP Partner Space Time Insight (STI)

  Energy Data Management


Let’s focus in one of the current interesting subjects example of Innovation.  TSO are currently pursuing new Energy Data Management solutions that can accommodate the new information management processes in their transforming  energy markets. Besides providing critical information for Network Balancing and Forecasting, the Energy Data Management concept spans from automated head end integration to meter data processing and analysis up to business process execution in a collaborative manner with other market participants.  Since market liberalization started, the SAP Industry team  has understood the value of Energy Data related processes and constantly has updated its knowledge on requirements and secured that our solutions can provide a high level coverage to the functional requirements described by TSOs and other market participants such as Distributors, Power Producers and Retailers.  The adoption of HANA technology is enabling a new generation of EDM applications which may  enable TSO leverage other  investments already done in our application portfolio. In recent years, SAP has been developing an energy data management (EDM) solution to satisfy the most complex requirements faced by the utilities industry today. Since 2000, the SAP energy data management concept has been a focus of the SAP for Utilities solution roadmap, incorporating key features to handle time series data, energy settlement processes, and communication to other market participants. More recently, we’ve also incorporated capabilities for AMI (Automated Meter Infrastructure) integration requirements, including handling of big volumes of metering data.


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Key Features of an MDM  (Meter Data Management) System by Gartner and coverage of SAP EDM (Energy Data Management)


SAP has always divided the EDM (Energy Data Management) – MDM (Meter Data Management) functional space in two worlds: the technical – so called MDUS (Meter Data Unification System) – and the functional- Energy Data Management. SAP Energy Data Management is the only solution that can solve the immediate issues around energy data processes at TSO and also provide a solid basis for the smart meters management.

The SAP “MDUS approach” has been very well accepted by the market over the years. Most of the European utilities have decided for a technical MDM in full compliance with SAP EDM, deciding in line with SAP guidance, fully leveraging the SAP AMI Integration capabilities.  Some utilities faced implementation issues with the MDUS implementations. Some of these issues had to do with the functional overlap provided by MDUS and SAP EDM  or by lack of market liberalization capabilities. In face of these issues sometimes the MDUS implementation has been questioned and a SAP EDM stand alone implementation took over.

Following the requests from SAP customers and also the extensive real time capabilities SAP now offers, SAP is now working with leading analysts to provide full visibility on the MDM capabilities available with SAP EDM.


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Holistic SAP EDM (Energy Data Management) concept


The application of this solution has several advantages:  solves current meter handling issues – largely caused by a heterogeneous system landscape  and readies business systems to the integration as large scale of  smart meters and other types of sensor data. The result is a consolidation and system simplification due to the Centralization of meter asset management, energy data collection and settlement in one solution  based on the core system of the TSO

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