Since 2005, NordREG (Nordic Energy Regulators, Denmark, Norway, Finland and Sweden) has worked towards a harmonised electricity retail market. One important step has been to implement national datahubs in the Nordics. The main purpose of a datahub is to ensure uniform communication methods and standardised processes for professional participants in the electricity market, in order to stimulate competition and optimise market conditions for electricity consumers.
NordREG identified four focus areas that should be prioritised: Combined billing, supplier switching and customer moving, information exchange, and customer interface. Improving efficiency and economies of scale on data handling, business processes and IT systems aims for significant cost reduction. Several important steps have been completed, but the common objective has not yet been achieved!
The Nordic countries still have four separate retail markets, with many similarities and some differences. So far, Norway and Denmark are the only NordREG members that have fully implemented a datahub, and still the market processes in the two countries are different.
Fingrid, authorized by the Electricity Market Act, is in the process of establishing Datahub in Finland, with a target implementation date of early 2022.
Hansen’s views on further harmonisation
The datahubs in the Nordics should strive for further interoperability – ideally to reduce the number of interfaces to only one, independent of the number of markets a retailer operates in.
With hub interoperability, Hansen primarily refer to forwarding of messages between datahubs, so that a retailer could initiate a supplier switch in his local hub, even if the customer resides in another country. Further harmonisation of the process definitions also makes it easier to enable hub interoperability
Lessons learned from the Norwegian datahub project
Ironically, the trend after datahub implementation in Norway is consolidation across the entire market. Due to low margins and tough competition, many smaller utilities are not able to keep up with the pace. This trend is also compounded by the unbundling of utilities.
Lessons so far point towards retailers having gained the most with the datahub implementation. They were the ones who quickly engaged the datahub in a constructive dialogue and made their views known, and thus also made sure that their important processes were implemented in an efficient way.
Hansen’s guidelines for a successful datahub implementation
- Get to know and fully understand the new way of working – post datahub
The processes will change when implementing a datahub coordinating the market. It is important to look for efficiency improvements, not only the milestone around the next corner. If sufficient time is not spent on this early enough, efficiency gains will not materialise themselves. - Dedicate a project team
Get everyone onboard early, and include your whole organisation. Organisations have differences in system composition, and different key areas that are important to preserve through the project. Make sure your systems are able to orchestrate together efficiently. - Evaluate your IT portfolio
You are facing a significant investment in your core system portfolio. Smart investments can be made upfront in systems that you plan to use also post datahub. Many companies wasted time and effort by spending time and resources on legacy systems they plan to replace later. Do not purely look into what you are doing today, but what you reckon will be the key business drivers tomorrow. - Data quality
A datahub requires stricter control of the data, and synchronising across different parties.
Cleaning takes time and needs to be worked on – continuously. And the job is not done when the hub goes live! Get the new routines up and running as fast as possible. - The whole chain needs to work together!
Remember that it is not only the individual processes that need to be approved. It is extremely important that the different processes are working together – in a good way! In addition, please keep in mind that internal processes will be affected by the hub implementation.
Hansen has transformed the business for over 100 utilities in Norway, upgrading their business models and systems for the datahub. Hansen has a key role in the Netherlands datahub project organised by EDSN, as its world class MDM solution manages 15.7 million metering points. Currently, the Hansen team are enabling over 80 utilities in Finland for their journey towards the new Finnish datahub.
To learn more about datahubs in the Nordics and how we can help your transition pre- and post- datahub, send us a note at info@hansencx.com