Improved business reporting in the energy sector
Extensive data warehouse implemented in just five months
Within the energy market, reconciliation procedures and accurate reporting are becoming increasingly critical. This is especially the case at Nuon Belgium, which boasts a growing customer base and an enormous flow of data to be processed. With the help of Keyrus and SAS, Nuon has been able to greatly improve both its metering data management and its business reporting. The new environment had to be operational in just five months to comply with regulatory deadlines.
Continuous communication between the project team and the business users enabled a smooth development process.
Samuel De Klerck
Senior Performance Solutions Advisor at Keyrus
Project Manager at Nuon
Given the complexity of the manipulations required, Keyrus was convinced that SAS would provide the required added value
Fast growing newcomer on the Belgian energy market
Nuon Belgium is part of the Vattenfall Group. The company supplies both electricity and natural gas. It is the most successful newcomer on the Belgian energy market since its liberalization. Nuon Belgium's market share has grown steadily in recent years and now stands at 5.3 percent for electricity and 5.8 percent for natural gas.
Energy demand is a tricky business: the exact volumes that will be consumed by customers cannot be known beforehand. Therefore, the monthly invoice that Nuon issues to customers is estimated based on past consumption patterns and is held constant throughout the year. When a meter reading is performed at the consumer's home, Nuon receives this data and is able to calculate the actual consumption of the consumer. These same principles apply to the energy that Nuon buys from producers.
At the end of the period, the market then carries out the external reconciliation. In other words, the difference between the previously estimated use and the actual consumption per customer is calculated. These differences are extremely important to monitor and to report on. They also need to be processed in Nuon's accounting system.
New reconciliation and reporting needs
"A new set of external reconciliation rules was published in Belgium in April 2010," explains Antoine Thoreau, Project Manager at Nuon. "As a result, we had to adapt our internal reconciliation models. In addition, we needed to address the growing reporting demands from our management." They need to know, among other things, what energy volumes were sold over the past year as well as the associated costs. Bringing the energy to customers' homes has a cost which must be allocated. This means that all of the energy injected into the grid must be correctly attributed to the appropriate parties.
"We figured that the timing was right to completely adapt our database. To do so, we launched our VolaRe (Volume and Reconciliation) Project. The project thus covered a variety of needs that could best be met through the creation of a new data warehouse. To ensure an efficient development, we decided to look for an experienced partner."
Keyrus has excellent knowledge of the energy sector
"Our reconciliation and reporting needs require computer intensive calculations," notes Thoreau. "Our goal was to have these calculations executed as rapidly as possible."
"We launched a request for proposal and ultimately selected Keyrus, a preferred SAS partner, to develop a technical solution. They had a solid track record in building data warehouses and suggested a solution that was perfectly tailored to our needs and budget. In addition, they impressed us with their in-depth knowledge of the energy sector."
Samuel De Klerck, Senior Performance Solutions Advisor at Keyrus, recalls that the major challenge was the huge amount of data that had to be processed: "We had to deal with an initial load of 700 million records. In addition, Nuon receives metering data for half a million meters every month. This enormous volume of data is typical to the energy sector."
Smooth integration with existing ETL environment
"We initially wanted to develop our existing business intelligence platform. However, Keyrus advised us to use SAS instead, given the sheer volume and complexity of data," adds Thoreau. "SAS offers pre-built procedures and functions, which means that fewer lines of code are required to achieve the same result. This reduced the technical complexity of the project substantially."
In addition, the SAS software smoothly integrates with Nuon's ETL system. While SAS is used for complex calculations and data quality, the existing system primarily handles ETL loading and overall flow control. This integration enables SAS to run in the back-office while business users can continue using the interface they are already used to.
"The transformations and calculations to be made were particularly complex," observes De Klerck. "For instance, we had to make statistical combinations based on load profiles by 15 minute timeframes, taking into account climate correction factors and residue factors." An additional challenge was the short time available for the project due to new regulatory requirements.
Quick wins and strategic benefits
Nuon is already using the new environment to track revenue leaks. This includes, for instance, situations where a smaller consumption has been estimated and billed than what was actually consumed. This alone has generated cost savings virtually from day one. The new VolaRe environment also generates a wide range of business reports. These include reports on estimated volume, metered volume, budget invoice volume, periodic invoiced volume, allocation, and reconciliation volume. All data can be sliced by month and year for financial reporting needs. As a result, the management now benefits from a clearer overview of the business.
System implemented in short timeframe
Only five months elapsed between the start of the mission and the final delivery. "We divided the project into distinct blocks to enable us to work in parallel on the various blocks," states De Klerck. "We also ensured continuous communication between the project team and the business users from the financial team in order to ensure smooth acceptance." The project was completed within the original timeframe and budget.
"Another key benefit is that SAS makes the system easily scalable. Additional developments and adaptations can be made more rapidly. This keeps any future development costs at a reasonable level. The reports can be extended to a wide range of business intelligence needs. It is a foundation that can also be used later for forecasting, what-if analyses, and complex modeling, among other things," concludes Thoreau.
Improve business reporting to comply with new regulations and management requirements
Base SAS® Software
- Compliance with external reconciliation legislation: Nuon benefits from more timely and accurate reports on the differences between energy consumption estimates and actual consumption patterns.
- Immediate cost reductions: thanks to better tracking and identification of revenue leaks.
- Rapid development and within budget: thanks to pre-built procedures and functions in SAS, as well as smooth integration with existing software.