Finding the balance

SAS helps Stanwell Corporation (SCL) analyse masses of critical information in real time.

As a result of deregulation, electricity production output is an extremely competitive business. The electricity market is similar to the stock market. Electricity generators must bid their output quantities and prices for each 30 minute time slot of the day to the power exchange, with the marginal electricity generator setting the price. If a company bids too high, its electricity is not dispatched during that half hour segment. On the other hand, if all electricity generators bid too low, no one makes money.

Finding the balance is key. This system translates to over four million items of information issued by the central power exchange to each power generator, and 100,000 items of information generated by internal forecasters and traders in each 24 hour period. As one of Queensland's key providers of reliable electricity comprising of coal fired, hydroelectric, wind and gas turbine plants, SCL must ensure that it can consume and analyse this information, enabling it to effectively trade in an electricity spot market against its three major competitors.

SCL turned to SAS consulting services for help. SAS and SCL have formed a unique business plan, focusing on a partnership between the two companies. "The partnership has proven to be enormously successful and, most importantly, cost effective. The reason why is due to joint development and joint understanding of requirements – risk premiums have not been observed in costs," said Mr Simshauser.

Information in real time
The solution designed and implemented by SAS consulting services allows SCL to share analysed warehouse data across their Intranet. "We must have information at our fingertips, so all Stanwell staff can log into our internal Intranet web pages to see actual andforecast production and prices prior to undertaking maintenance.

"We needed a flexible, modular solution that was going to grow with the company, something that could consume the four million pieces of data we receive per day and store it for seven years," said Mr Simshauser, Trading Manager for SCL.

The Data Warehousing solution works as fast as we want it to, allowing us to crunch the numbers and assess the market fluctuations, which can range between zero and $5000 per unit in each five minute period," said Mr Simshauser. This suits our business needs, as the nature of our industry does not allow us any lag time.We are working strictly on real time and need to know answers instantaneously." "By having all this data readily available, especially through the mobile user application SAS offers, we are able to be pro-active with our turn around time for information. This enables all our staff in the field to access information through the Intranet, allowing them to access the particular power station they are working at, view what the price of power is trading at and if it is on a downturn, enter into risk maintenance," said Mr Simshauser

“For the benefits to be quantified, one only has to look at SCL's annual report for 1999, which stated a profit of $110 million. Our profit for 2000 will be higher again, despite falling spot prices.”

With the company's aim being Australia's foremost provider of environmentally responsible energy solutions, SCL aspires to continually progress its application of technology to ensure that its power stations are operating efficiently. "To achieve this long term goal, we have to have the most effective business intelligence solution possible and we know that SAS Institute's Data Warehousing solution will continue to provide this whilst our company experiences rapid growth," said Mr Simshauser.