Success Story: Vattenfall/Nuon

Integrated energy company achieves agility to meet new market model with Axway Interchange

  • Headquarters

    Stockholm, Sweden (Vattenfall) Amsterdam, the Netherlands (Nuon)
  • Industry

  • Challenge

    Needed to quickly adapt to changing market requirements, meet regulatory compliance demands and greatly increase volumes of data exchanges with multiple partners

  • Solution

  • Results

    • Automated data exchange and integration ensures reliable and on-time trading transactions
    • Axway Interchange adapts easily to new market models
    • Standard monitoring tools are provided for easy supervision of transactions
    • Rapid ROI achieved through multiple benefits gained with the Axway solution
    • Regulatory compliance is achieved through stability and reliability provided with the Axway solution
    • Real-time scalability handles peak trading times seamlessly

“Our whole business depends on Axway Interchange. We can’t have bottlenecks or dropped communications with trading partners. Interchange ensures the reliability critical to running our business. We are very happy with the product.” 

Vattenfall is the fifth largest electricity producer and the largest producer of heat in Europe. Vattenfall’s primary products are electricity, heat and gas. Vattenfall operates throughout the entire electricity value chain to provide generation, transmission, distribution and sales. Vattenfall serves 7.4 million electricity customers in Europe. In 2009, consolidated sales for the group amounted to €22.8 million.

In 2009, Vattenfall acquired 49% of Nuon shares, and operational control of the company. The remaining 51% of the shares will be acquired by Vattenfall in the following six years. In the Netherlands, Nuon is the brand name under which Vattenfall operates. Vattenfall’s core markets are in Sweden, the Netherlands and Germany. Vattenfall also operates in Denmark, Finland, Poland, the UK and Belgium. The company’s largest energy trading floor is located in Amsterdam.

Vattenfall strives to reduce CO2 exposure in an effort to be among the leaders in developing environmentally sustainable energy production. In parallel, after a phase of intensive growth, the company is focusing on consolidation of operations to move towards greater accountability and stronger performance.

Energy Market Deregulation Creates New Business Models

In 2004, the energy market in the Netherlands underwent full liberalization. In this open market, each Dutch citizen is free to choose their energy supplier.

The existing and emerging wholesale energy market structure requires trade partners to communicate and transact business seamlessly, for security, access control, scalability and flexibility to meet market changes and regulatory requirements. Floris van der Meulen, Application Consultant in the Energy Trade and Wholesale department at Vattenfall/Nuon, explained the importance of Axway Interchange with respect to the company’s transition to the new market model: “The energy market has grown explosively in the Netherlands through liberalization, and it has become more commercial and more professional. There are many new players in the market and communication requirements have therefore changed. Axway Interchange helps us to implement the new market model by providing a platform to exchange large volumes of data securely during peak trading periods just prior to Gate Closure.” The price and volume of trades increases towards Gate Closure. This is caused by supply and demand factors with a diminishing number of trades likely to be available closer to Gate Closure.

More than 700 messages are exchanged during the last hour and leading up to the final minutes before Gate Closure. Traders are buying or selling gas or power on the trading floor, and the information exchanged is highly time-sensitive and confidential. Van der Meulen continued, “We needed to send contracts, volumes, prices, plant information and grid information in a timely manner and within strict deadlines, while at the same time handling a dramatic increase in data exchanges. We also needed to implement industry-standard exchange formats and protocols such as EDINE and EDIGAS to communicate with our counterparts. Axway enables us to achieve our goals in adapting to the new market model by providing a secure, stable and flexible solution.”

In addition, renewable energy brings new partners and creates new markets and new business models. “With solar power and other renewable energies in which we are investing, the landscape is constantly changing, and we are in a position to easily adapt to these changes with the Axway solution,” said van der Meulen.

Critical Business Processes, Regulatory Constraints and ROI

Formerly, files were exchanged manually so the large volumes exchanged during peak periods could not be handled efficiently. Also, it was often difficult to monitor messages and detect errors. With the Axway solution, the process of sending, receiving, translating and integrating messages has been entirely automated. Axway Interchange provides standard monitoring features to ensure messages are received or sent correctly, and to ensure errors are detected and resolved. “Our whole business depends on Axway Interchange. We simply can’t have bottlenecks or dropped communications with trading partners. Axway Interchange ensures reliability, and that is critical to running our business. We are very happy with the product,” said van der Meulen.

If messages are not sent to the right partner at the right time, trading partners receive costly fines from regulatory bodies. It is mandatory that transactions between partners are conducted and reported in a timely manner. The reliability provided by Axway Interchange helps Vattenfall/Nuon to comply with regulations and avoid hefty fines.

The benefits provided through Axway’s solution are numerous — difficulties with partners caused by undelivered messages are no longer a problem, and there is also much less manual work required from the team thanks to Axway Interchange. It is estimated that all these benefits add up to a return on investment within two years.

“To save time, we simply asked our competitors and trading partners which solution they were using. Our decision was based on the experience and success stories within our industry. We of course looked at price, and we tested the quality of the products ourselves, but the choice was fairly easy since our IT counterparts were entirely satisfied with Axway solutions.”

Axway Recognized as a Renowned Industry Provider

When Vattenfall/Nuon decided to acquire a new solution, it didn’t have time to waste on comparing offers available on the market. Instead, the company queried its competitors and trading partners to find out which solutions they were using. Axway’s name came up again and again as the best and most reliable solution on the market. “To save time, we simply asked our competitors and trading partners which solution they were using. Our decision was based on the experience and success stories within our industry. We of course looked at price, and we tested the quality of the products ourselves, but the choice was fairly easy since our IT counterparts were entirely satisfied with Axway solutions,” van der Meulen concluded.

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