Case Studies

Clarity helps keep South West Water on target

South West Water (SWW) supplies services to 1.5 million customers located predominantly in Devon and Cornwall, and has an annual electricity bill of £13 million. 93% of this spend is in the half hourly market. In April 2005, SWW appointed Total as its half hourly electricity supplier, signing up to a Fully Flexible contract.

Open market

Explaining how this new kind of contract works, Energy Manager, Alan Burgess, said: “We can buy and sell electricity ourselves on the open market, instructing Total to purchase it on our behalf. Every day we look closely at what the market is doing and can buy - or sell - accordingly. The wholesale price for electricity is very volatile so we would sell if prices are falling, with the aim of buying it back more cheaply at a later date. There's great flexibility in choosing which periods we want to buy for. For example, the contract allows us to buy for an entire summer period two or three years ahead or we can buy just a few days or the balance of the current month.”

Forecasts

As part of its contract with Total, SWW's electricity consumption has to remain within + or - 5% of its forecast figure. If it exceeds these figures, SWW could incur significant penalties. As a result, the water company has to be very certain of the amount of electricity it uses on a day-by-day basis. It is helped significantly in this task by having Clarity as its Elexon-accredited HHDC. Since Clarity's launch in October 2002, it has consistently been the top performer in the market, delivering more complete data for more meters than any other HHDC.

Clarity, which is powered by Stark's RT software, reads all SWW's 414 half hourly meters during the night and makes this data available to Alan Burgess and his team before 10am the next morning.

Accurate data

“We simply download the information from Clarity's server each morning and we immediately have a detailed and accurate picture of how much electricity we used the day before,” added Alan Burgess. “We take the figures for the same period last year and use that as the basis for our monthly forecast.”

Forecasting can be hard, as SWW's electricity consumption is dependent on the weather and, consequently, fluctuates considerably. But since the data Clarity provides is typically 98% accurate on Day+1, SWW can be confident that their final outturn for the month will be close to their reported daily positions.

Alan Burgess went on to explain: “When actual consumption is not in line with our forecast, we automatically adjust our forecast for the days remaining in the month in order to reflect actual demand - to keep on target and ensure that we don't break our volume guarantee.”

Clarity also gives SWW increased visibility with any issues surrounding its half hourly data. For example, if there are no particular weather conditions affecting electricity demand, yet the data from a particular meter shows anomalies, it is easy for SWW to identify any faults and fix them quickly.

Savings

“Since we entered into the Fully Flexible contract with Total in April 2005, the data Clarity provides allows us to remain confident that we are keeping within our + or - 5% consumption targets. And that means we haven't incurred any penalty charges,” concluded Alan Burgess. “Having Clarity working with us is an important part of our overall risk management strategy and means that we are not exposed to needless costs.”