As of October 1, 2008, our U.S. business is called Siemens Energy, Inc.

Balancing the Interest of the Public and Market Participants

Operating an energy market requires balancing the complex interests of the public, market participants and the market operator.

Siemens helps market operators meet this challenge through its Spectrum PowerCC Energy Market Management (EMM) system that incorporates the latest market clearing technology in a set of modular, high performance components and engines.

Public interests include reliability of the electric energy supply and the macro-economic interest for the lowest market-clearing price for electric energy.

Market participants need to optimize investments, increase operational efficiency and have timely access to highly accurate information.

Market operators need to be highly efficient in running complex operations, flexible in adjusting market rules and proficient in coordinating grid security while providing highly available market operations.

Spectrum PowerCC EMM meets these needs and more with a highly modular solution that lowers market prices , optimizes business processes and increases grid reliability for LMP-based centralized markets . The components of the Spectrum PowerCC EMM are best deployed as an integrated solution; however, each can be individually applied to an existing market management system to preserve investments already made into legacy systems. Alternatively, market operators can get the benefits of the key components by subscribing to Application Hosting Services provided by Siemens.

EMM is highly adaptable and configurable to meet a wide range of market designs - from a simple Economic Dispatch based market to a complex Security Constrained Unit Commitment market. It also provides a very high degree of flexibility to adapt to changes in market rules within any chosen market structure.

The key components of the Siemens solution for centralized Market Operator Systems include:

Siemens’ EMM is built on a modern n-tier architecture utilizing best practices from similar well established e-businesses. The system is composed of clearly identified functional modules and related standardized interfaces. The technology platform of the EMM system includes leading third party standard and de-facto standard technologies for database services, communications, security, and user interface/web services. The use of industry standards enables deployment of the EMM system on Unix, Linux or Microsoft Windows platforms, offering choices that best fit the specific IT strategy of individual enterprises. Heavy reliance on industry standards and de-facto standards in hardware and software platforms guarantees long term IT investment protection.

For Market Operators:

The Market Clearing Engine is the core of Spectrum PowerCC Energy Market Management and is based on the Security Constrained Unit Commitment (SCUC) software. For the first time ever, the Market Clearing Engine does not impose artificial limitations on the design of centralized electric energy markets. It is now possible to include all relevant production, load and network constraints when clearing the central spot market simultaneously for energy and ancillary services. This solution approach, known as co-optimization of energy and ancillary services, produces the lowest overall clearing prices while meeting all physical constraints and grid security objectives.

Superior Technology; Optimal Solution

The Siemens technology utilizes advanced Mixed Integer Programming (MIP) techniques combined with a Separable Quadratic Interior Point Method to obtain the optimal SCUC solution. The MIP based SCUC represents the next step when compared to the traditional Lagrange Relaxation based SCUC.

The Siemens MIP based SCUC implementation reaches the optimal solution without manual interaction or arbitrary relaxation of constraints. It produces the optimal solution consistently and independent of the operator.

Improving Reliability, Achieving the Lowest Prices

These breakthrough technologies enable market designs based on a full AC network model, allowing Market Operators to manage congestion well before it gets to real-time. This may be inherently more complex, but the Siemens technology is capable of managing the complexity and actually makes day-to-day interactions between Market Operators and Participants simpler and more transparent. Handling a large number of transmission constraints is one of the most important aspects in achieving feasible schedules and avoiding the high cost of congestion management in real-time, when available resources may be scarce and expensive.

One Engine for Multiple Markets – Achieving Flexibility

The Market Clearing Engine is designed for easy activation/de-activation of variables, various objective functions and constraints, enabling easy switching between the different runs such as a full Security Constrained Unit Commitment, a Reliability Commitment, a Security Constrained Dynamic Dispatch or a Security Constrained Economic Dispatch. This built-in flexibility enables the use of the same market-clearing engine in multiple market structures such as a Day-Ahead Market  or a Real-Time Market.

The speed necessary to facilitate the flexibility of solving the different optimization problems using the same engine is achieved by applying Siemens' domain knowledge, the superior MIP technology and innovative computing platforms.

Comparison of Siemens' Market Clearing Engine Capability with Traditional Lagrange Based Methods

At the core of the Market Clearing for centralized markets is the Security Constrained Unit Commitment and Economic Dispatch, a complex optimization problem.

The optimization algorithm chosen must be able to produce a solution within minutes to support all coordination efforts necessary between market operators and participants. A traditional way to meet the time requirements has been to relax the optimization problem and not include all real-life parameters and constraints, risking real-time congestion and unpredictable market clearing prices.

Optimizing Processes and Flexibility

Highest levels of transparency of the market  state and processes is achieved through the integration of notification and instant messaging capabilities, and the presentation and availability of data, all within a secure, Public Key Infrastructure (PKI)-based environment.

User Interface

The Market Participant User Interface is a set of web-enabled, dynamic pages that presents data and information in tabular and graphical forms including scalable displays for network information. It requires no software installation other than a standard web browser and standard Scalable Vector Graphics) SVG viewer and Java plug-ins. All generated pages are pure HTML and Javascript and the scalable displays are in SVG XML format. Dynamic data updates in these displays, as well as dynamic messaging, alarms and notifications are enabled by the use of a Java applet.

Security

A modern, n-tier architecture is used for security with distinct web, application and database tiers. Use of either an existing corporate Public Key Infrastructure (PKI), B2B-enabled PKI or a separate market-dedicated PKI allows the use of digital certificates or biometric devices for authentication and authorization, ensuring non-repudiation for all transactions.

Adapt to Changing Market Rules

The Market Participant Interface incorporates a business rules engine component, which allows immediate validation of input data from the Market Participant. Data submissions from the Market Participant can be immediately verified for compliance to market rules, and feedback provided instantly.

The Market Operator has the flexibility to rapidly adapt to regulatory changes and evolving market rules by using a visual development environment for creating, editing and testing business and market rules. New or modified rules can be deployed without requiring software changes or downtime.