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The Evolution of Electricity Retail Software

February 20, 2012 | Comments: 0 | Views: 168

Electricity retail software has seen a dramatic rise in its level of sophistication over the past decade. This constant evolution has been largely customer-driven; smarter consumers want to know exactly how much electricity they're using, what they're paying and how they can save money. The suppliers, motivated by a need to retain a much more transient customer base, have had to respond by developing software that not only predicts peak demand, but can demonstrate an ability to adapt to a constantly changing market and offer customers greater value for their money. So how did electricity retail software start, and what is the current state of play within this complex area?

A defined market

In 1990, the UK electricity marketplace was broken up into 12 regional areas with each REC (Regional Electricity Company) controlling a geographically defined area. While this simplified the distribution of electricity to both domestic and commercial customers to an extent (at this point there were only three main suppliers - BNFL, PowerGen and National Power), it also brought with it new challenges in the monitoring and control of the flow of electricity. This was particularly true when demand fluctuated at peak times. Software was developed that gave the distributors an overview of the mean averages, allowing them to divert resources where applicable and maintaining a consistency of supply that came as a pleasant surprise to end-users, after years of blackouts, power interruptions and the energy crises of the 1970s.

Things really changed, however, with the 2001 deregulation of the industry. The introduction of the New Electricity Trading Arrangements increased competition and brought a plethora of new suppliers into the marketplace. The principle behind this was to reduce the cost of bulk electricity with a trickle-down effect to the consumer, open up a fair trading policy within the market and to reduce the effects of over-regulation. As the market adapted, so too did the software used by suppliers to manage it.

Software solutions for modern challenges

To ensure that they are on top of their game, electricity suppliers need information. Lots of information. About their customers, demand, price ratios, predicted demand, modelling - you name it, they need it. To be able to datamine a wealth of information to pull out the details that will ensure a cost-effective system that benefits both the supplier and the end users, software has had to advance at a phenomenal rate. Incorporating universally recognised packages like Oracle and Java means that modern software can be integrated with existing systems, thanks to their universal compatibility.

The demands on modern electricity retail software packages are considerable. They have to be able to perform a wide range of complex, multi-function applications, mainly because energy delivery is now much more driven by customer's unique requirements rather than the more generalised delivery systems of old. Customers now have multiple billing aggregation points, exotic pricing structures and bill formatting that puts increasing demands on the software suppliers use to manage the system. Electricity retail software now needs to be flexible first and foremost, while still delivering the same level of information for the supplier to datamine and to determine future demand/capacity ratios. Today, the principles of a customer-driven delivery system dominates the energy sector, and as retail software evolves, it has to take into account the changing demographical demands of a far more tech-aware consumer base. Modern electricity retail software therefore has to be all things to all men - both the suppliers and the consumer.

Graham Paul - Services Delivery Director (EDW Technology). EDW have a long history developing, implementing and supporting best-of-breed software solutions. Since 2000, their electricity quoting software - part of ERS (Energy Retail Suite) has enabled energy retailers with powerful and highly competitive IT systems, transforming customer experience, improving business efficiency, reducing costs and boosting profits.

Source: EzineArticles
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