proforma request for expressions of interest - aemo.com.au aemo/ten… · web viewin this...

Request for Expressions of Interest -Market Clearing Engine Support Services

Australian Energy Market Operator Limited (ABN 94 072 010 327)Level 22, 530 Collins StreetMelbourne VIC 3000Tel: 03 9609 8000Fax: 03 9609 8080

Services: Market Clearing Engine Support Services

AEMO Project Manager: For further information or clarifications (see also section B.5), contact:Peter [email protected] of Interest submissions must not be made to this e-mail address.

Closing Date: 5:00 pm (AEST) 31 July 2015.Expression of Interest submissions to be emailed to: [email protected]

mailto:[email protected]


Request for Expressions of Interest – MCE Support Services

Table of Contents

SECTION A: REQUEST FOR EOI.................................................................................................2SECTION B: INFORMATION FOR RECIPIENTS..............................................................................4SECTION C: EOI REQUIREMENTS AND EVALUATION....................................................................5SECTION D: EOI FORM..............................................................................................................7SCHEDULE 1...............................................................................................................................9SCHEDULE 2.............................................................................................................................10SCHEDULE 3.............................................................................................................................13SCHEDULE 4.............................................................................................................................14SCHEDULE 5.............................................................................................................................15

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SECTION A: REQUEST FOR EOIA.1 Background

AEMO is a company limited by guarantee. It has statutory functions under the National Electricity Law, National Gas Law and Rules made under those Laws, including:

Market and system operator of the National Electricity Market (NEM);

National transmission planning for the NEM;

Market and system operator of the Victorian Declared Wholesale Gas Market;

Market operator of gas short term trading markets, gas trading exchanges and retail gas markets in eastern and southern Australia.

With its broad national focus for the future, AEMO’s objectives are to promote efficient investment in and operation of Australia’s electricity and gas services for the long-term interests of consumers with respect to price, quality, safety, reliability and security of energy supply.

A.2 Request for EOI

The Market Clearing Engine (MCE) is a software system developed on behalf of AEMO that determines the daily operational and pricing schedules for the Victorian Declared Wholesale Gas Market. The model combines non-linear pressure/flow equations, equations relating compressor performance to power use, inlet and outlet pressure, pressure regulation and check valves, and bids for gas deliveries and receipts within an optimisation framework to determine optimal hourly receipts and deliveries of gas based on the bids and physical constraints within the system.

EXPRESSIONS OF INTEREST ARE INVITED for the provision of support services for the MCE.

A.3 Glossary

In this document, a capitalised word or phrase has the meaning as set out in this table:

Addendum Any document issued after the date of this Request for EOI and labelled as an “Addendum” to this Request for EOI; collectively known as “Addenda”.

AEMO Australian Energy Market Operator Limited ABN 94 072 010 327. References to AEMO include, where the context requires, AEMO’s employees, officers, contractors, consultants, advisers and other persons authorised to act for AEMO.

AEMO Project Manager The person specified on the cover of this Request for EOI.

Business Days A day other than Saturday, Sunday and any other day not taken to be a public holiday in Victoria.

Closing Date The date specified on the cover of this Request for EOI.

DWGM Victorian Declared Wholesale Gas Market

EOI or Expression of Interest The submission lodged by the Recipient in response to this Request for EOI.

EOI Form The document contained in Section D.

MCE Market Clearing Engine.

NEM National Electricity Market.

NER National Electricity Rules.

NGR National Gas Rules.

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Recipient A person in receipt of this Request for EOI.

Request for EOI This document, including its schedules, attachments and appendices.

Services The services described in Schedule 2 of the EOI Form.

Statement of Compliance The document contained in Schedule 1 of the EOI Form.

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SECTION B: INFORMATION FOR RECIPIENTSB.1 Legal Status

This Request for EOI is an invitation to treat and is not intended to have any contractual effect. Short-listed Recipients may be invited to submit tenders for the delivery of the Services after the conclusion of the EOI process.

B.2 Confidentiality

This Request for EOI may contain confidential information about AEMO or its operations and markets, and is provided solely to enable Recipients to submit proposals. Recipients must not use information in this document for any other purpose without AEMO’s prior written consent. To the extent that confidential information is provided to Recipients, Recipients must take all reasonable steps (both physically and electronically) to protect the confidentiality of such information.

B.3 No Warranty

Except to the extent required by law:

AEMO makes no warranties or representations on the accuracy, adequacy or completeness of the Request for EOI or any other information provided to a Recipient;

AEMO is not liable in any way for any loss or damage of whatever kind (whether foreseeable or not) however arising (including by reason of negligence), incurred by any person in connection with this Request for EOI or any other information provided to a Recipient.

B.4 No Collusion or Dealings with Competitors

Recipients must ensure that they (and their principals, employees, agents and contractors) do not:

(a) discuss this Request for EOI with any other person they know has received this Request for EOI or might reasonably be expected to have received it; or

(b) engage in any conduct that is designed to, or might have the effect of, lessening competition in the supply to AEMO of the Services.

Recipients who wish to engage in legitimate teaming or sub-contracting discussions with persons who might deliver the Services must gain AEMO’s prior approval to do so.

B.5 Queries

If Recipients find any discrepancy, error, or have any doubt as to the meaning or completeness of this Request for EOI, or require clarification on any aspect of it, they should notify the AEMO Project Manager in writing, not less than 7 days before the Closing Date. AEMO may issue an Addendum to all Recipients clarifying the discrepancy, error, doubt, or query (as the case may be) and may extend the Closing Date if AEMO considers it appropriate in all the circumstances.

No representation or explanation to Recipients in relation to this Request for EOI is taken to be included in the Request for EOI unless it is contained in an Addendum.

B.6 Short-listed Recipients

Following the conclusion of the EOI process, a short list of Recipients will be invited to submit tenders for the delivery of the Services. Tender documentation will be issued to short-listed Recipients subject to receipt, by AEMO, of a signed Confidentiality Agreement (Schedule 5) issued as part of the EOI process. The tender will include the ‘Mathematical Formulation Document’ and ‘Programmer’s Guide’.

B.7 Conditions of submitting an Expression of Interest

Recipients wishing to submit an Expression of Interest must comply with Section C.

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SECTION C: EOI REQUIREMENTS AND EVALUATIONC.1 Submitting an EOI

An EOI must meet the following requirements:

All applicable sections of the EOI Form and Schedules must be completed.

The EOI must be dated and signed (in the case of a body corporate, by a duly authorised officer) where indicated.

All supporting documentation evidencing the matters specified in Schedule 3 to the EOI Form must be included with the EOI, to the extent applicable to the proposed Service.

If a Recipient cannot comply with any element of the EOI Form or Schedules, the Recipient must specify in the Statement of Compliance the nature of, and reasons for, the non-compliance.

EOIs must be lodged in electronic form, to [email protected] , by 5:00 pm (AEST) on the Closing Date.

Additional documentation may be submitted with an EOI if, in the Recipient’s opinion, it is necessary for a proper understanding of its EOI.

AEMO may decide to accept late or non-conforming EOIs, but is not obliged to do so under any circumstances.

C.2 Recipients to perform own due diligence

By submitting an EOI, a Recipient is taken to have:

satisfied itself of the requirements of this Request for EOI;

made all reasonable enquiries, investigation and assessment of available information relevant to the risks, contingencies and other circumstances relating to the Services; and

satisfied itself as to the correctness and sufficiency of its EOI.

C.3 EOIs Commercial-in-Confidence

EOIs will be treated as confidential and will not be disclosed outside AEMO except:

as reasonably required for the purpose of assessing the proposed Services;

required by law, or in the course of legal proceedings;

requested by any regulatory or other government authority having jurisdiction over AEMO, or its activities; or

to AEMO’s external advisers, consultants or insurers,

in which case the Recipient is deemed to have consented to this disclosure by providing the EOI.

C.4 No reimbursement for costs of EOI

No Recipient is entitled to be reimbursed for any expense or loss incurred in the preparation and submission of its EOI or for any costs incurred in attending meetings with AEMO during the EOI process.

C.5 No publicity

Recipients must not make any public or media announcement about this Request for EOI or the outcome of this Request for EOI without AEMO’s prior written permission.

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C.6 EOI Evaluation

AEMO’s assessment of EOIs may include, but is not limited to, an evaluation of the following matters as relevant to the provision of the Services: Proven ability and experience delivering similar services Proven ability, as evidenced by references, to deliver equivalent services to best practice standards Recipient’s capacity and resources, including personnel and facilities.

C.7 No obligation to debrief

AEMO is under no obligation to debrief any Recipient as to AEMO’s evaluation of EOIs, or give any reason for the acceptance of or non-acceptance of any EOI.

C.8 Confidentiality Agreement

Recipients are required to sign the Confidentiality Agreement in the form of Schedule 5. This Agreement will apply to parties short-listed to submit tenders, following the conclusion of the EOI process. The tender document will include the ‘Mathematical Formulation Document’ and ‘Programmer’s Guide’.

C.9 AEMO not bound to proceed

AEMO is under no obligation to proceed with, or accept any EOI, complete the process outlined in this Request for EOI, invite any Recipient to submit a tender, or ultimately purchase any goods or services that comprise any part of the Services.

AEMO may amend the process outlined in this Request for EOI by issuing an Addendum.

C.10 Intellectual property rights

Unless otherwise indicated, AEMO owns the intellectual property rights in this Request for EOI. Recipients are permitted to use and copy this document for the purposes of submitting an EOI.

AEMO will retain and own all EOIs lodged as a result of this Request for EOI. Apart from AEMO’s right to copy and distribute EOIs for the purposes of evaluation, Recipients’ intellectual property rights in their EOIs are not affected by AEMO’s rights under this Section C.10.

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SECTION D: EOI FORM

To: Australian Energy Market Operator LtdLevel 22, 530 Collins StreetMelbourne VIC 3000

Expression of Interest for Market Clearing Engine Support Services

From:

Recipient:

ABN:

Address:

Contact Person: Name:

Title:

Telephone no:

Facsimile no:

E-mail:

1. EOIThe Recipient expresses its interest in providing the Services in accordance with the requirements of the Request for EOI as specified in the Statement of Compliance in Schedule 1. If submitting this EOI in hard copy and electronic form, the Recipient must ensure they are identical and agrees that AEMO may rely on either version when evaluating the EOI.

2. Agency/Joint EOIThe Recipient is/is not1 acting as agent or trustee for another person, or lodging an EOI jointly with other persons.

(If the Recipient is acting as an agent or trustee, full details must be provided in this section)

3. Services The Recipient provides the supporting information required by Schedules 2 and 3 for the Services to be provided.

4. Addenda to Request for EOI (only if Addenda received)In the preparation of its EOI, the Recipient acknowledges having received the following Addenda, if any, to the Request for EOI:

Addendum No. 1 Dated


1 Delete as appropriate.

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5. How did you hear about the Request for EOI? (please tick)

□ The Australian IT Section

□ The Australian Business Section

□ The Weekend Australian

□ Other ____________________________ (please state how you heard of the Request for EOI)

NOTE: Capitalised terms in this EOI Form and Schedules are defined in the Request for EOI.

Dated this day of 2015

EXECUTED by [NAME OF RECIPIENT] by its duly appointed representative in the presence of:

)))

..............................................................……..Witness

..............................................................……..Name of witness (print)

..............................................................……..Authorised officer

..............................................................……..Name of authorised officer (print)

..............................................................……..Title of authorised officer (print)

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SCHEDULE 1

STATEMENT OF COMPLIANCE

I [Name] confirm on behalf of [Recipient] that this EOI conforms in every respect with the Request for EOI.

OR

I [Name] confirm on behalf of [Recipient] that this EOI conforms with the Request for EOI other than in the following respects:

1.

Recipient's name _________________________________

Recipient/Authorised officer signature _________________________________

Date _________________________________

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SCHEDULE 2

BACKGROUND AND SERVICE REQUIREMENTS

1. Background

1.1 Market Clearing Engine (MCE)The MCE is software used by AEMO (and predecessor organisation, VENCorp2) to schedule gas flows and to provide data for gas settlement, including prices. It comprises two solvers – an operational schedule (OS) and a pricing schedule (PS). The OS explicitly represents the gas transportation network constraints and is used to as the basis for scheduling physical gas flows. The PS is essentially identical to the OS other than collapsing the network into an infinite tank model which allows a single common gas price to be determined for each schedule.

Both the PS and the OS are solved each time the MCE is run. The MCE is an inter-temporal problem comprising up to 24 one-hour problems. When solved for a full gas day a solution is determined for all 24 hours. However, the MCE is also run during a gas day for the remainder of the day.

Both the PS and OS optimise gas injections and withdrawals based on daily bids and offers. The objective function is to maximise the value of bids cleared less the cost of offers cleared. The objective function includes a number of additional terms related to tie-breaking and prioritisation of constraint violation. Bids are associated with withdrawal pipeline points and offers are associated with injection pipeline point points. There may be multiple bids or offers at a given pipeline point. A diverse array of constraints can be applied to a bid or offer and to pipeline points. These include minimum and maximum limits on daily or hourly flow and ramping limits. In addition there are limits on how quickly or whether flows can be changed at a reschedule. There are features of the modelling which encourage injections or withdrawals to be at a constant rate over time with rules about when to relax these situations.

The OS represents the network as comprising pipeline segments, compressors, pressure regulators and check valves. Gas flows and linepack3 are represented as a linear piece-wise linear function of origin pressure and pressure change across the pipeline or compressor. On its own, this representation is non-convex. An additional ‘successive iteration’4 routine iteratively resolves the problem, imposing constraints that force the final solution to consistent with a convex solution. Initial linepack levels are derived based on initial pressures while end-of-day linepack is required to satisfy minimum limits. The OS also determines gas consumption by compressors. While not used in the market, the OS generates a marginal cost based price at every location in the network for every hour.

The PS employs the same initial linepack and end of day linepack limits as the OS but imposes no upper or lower limits on linepack. This means that there is a common gas price at all locations and all in periods.

The MCE formulation includes a diverse array of penalties and adders to address features such as tie-breaking and to maintain constant rates of gas flow where possible. There are many orders of magnitude between the smallest and largest number used in the MCE formulation. This has created numerical accuracy issues in the past. To manage this the standard solution method has been to solve both the OS and PS iteratively – with the first solve excluding the small tie-breaking adders to determine the correct quantities over the day, while the second solve fixes quantities over the day (within tolerances) and imposes the small adders to achieve tie breaking. The first and second solves are run with the barrier method and in the case of the OS include additional successive iterations. The final solve is performed with the solution largely fixed and is solved with the simplex method to generate prices.

While out of scope of the MCE, market settlement employs the OS solution (potentially over-ridden by operators) as the official schedule for settlement purposes. Settlement prices come from the PS. To the extent that there are differences between the OS and PS schedules for a particular bid or offer, settlements can calculate additional compensation.

2 AEMO was formed in 2009 by merging a number of entities, including VENCorp.3 The gas stored in pipelines.4 AEMO is exploring replacing the successive iterations approach with a non-linear flow representation or a mixed integer methodology for addressing non-convexity.

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A 180+ page formulation document provides a comprehensive and up to date description of the MCE formulation. This formulation document has been used as a basis for independent testing (i.e. certification) of the software and consequently provides a very complete description of the formulation.

1.2 MCE Programmers Guide and MCE Mathematical Formulation document

The MCE Programmers Guide has a description of the software used to implement the MCE. It is intended to provide a detailed reference of the software components, how they fit together, and what each does.

The MCE Mathematical Formulation document provides more detail on the database design and algorithms in the MCE and an understanding of these is necessary for understanding the MCE Software.

The tender document will include the Mathematical Formulation Document and Programmer’s Guide.

1.3 MCE Current Operating Technical Environment

AEMO (production) environment: Dell PowerEdge R710 with Intel(R) Xeon(R) CPU X5560 @ 2.80GHz CPU, running Solaris 10, CPLEX version 12.2, and Sybase Software Developers Kit Sun Sol x64 Version 1550. MCE compiled with C compiler gcc version 3.4.6.

Database is Sybase ASE version 15.0 running on a VM on a SPARC T4-2 with SPARC T4 2.8GHz processors.

2. Service Requirements

2.1 Support ServicesThe service provider is to provide support services relating to incidents and service requests, as advised by AEMO. This will include, but not limited to, activities such as:

changes to the software as requested by AEMO;

creation and provision of workarounds and code fixes for restoration of any production incidents, with software fixes developed as part of the support services to be emailed to AEMO with a stated resolution and any new operating instructions that may be required as a result of the fixes;

updating the error report with the detail relating to the corrective action taken;

updating any documentation to reflect any changes made to the software as a result of the correction to the error;

providing AEMO with details related to resource time expended managing the MCE; and

other items as agreed by the parties in writing.

2.2 Software DevelopmentIn response to requests from AEMO, the service provider will provide proposals to perform enhancements and modifications to applications developed by the service provider for AEMO. These requests will be accompanied by detailed functional specifications that have been approved by AEMO. If accepted by AEMO, the service provider will perform the tasks specified in its proposal as fixed price tasks for the costs and delivery schedule indicated in the proposal and subject to acceptance criteria. The service provider will provide a soft copy of the modified documentation (such as updates to the mathematical formulation document and/ or programmers guide).

AEMO will provide access to a test and development environment via a virtual private network.

Release of the MCE into AEMO environments to be carried out by AEMO personnel, with installation and configuration instructions to be provided by the service provider to AEMO.

Examples of software development and testing relating to the Market Clearing Engine could be implementing changes for defects, enhancements, solution issues or network model changes.

2.3 Documentation ManagementThe service provider is to update the mathematical formulation document and the programmer’s guide each time a change is made to the Market Clearing Engine. Any updates to the mathematical formulation document and the programmer’s guide are to be provided to AEMO with all source code related to software development and

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testing of the Market Clearing Engine, such as implementing changes for defects, enhancements, solution issues or network model changes.

2.4 Expertise requiredThe maintenance and development of the MCE requires a mixture of skills.

Optimisation. The current MCE is based on linear programming technology but this could be moved to non-linear or mixed integer solutions in the future.

Software development. The current MCE is written in c, uses a CPLEX LP solver and a UNIX operating system. This could be moved to alternatives such as c++ or Mosel, Xpress and windows in the future.

Gas flow representation. Note that AEMO can provide support in this area, but the service provider should have the capability to develop and refine gas flow models or representations of components of the network based on their own research or knowledge. The service provider may be called upon to help analyse and explain software solutions and to aid in improving the accuracy of the model. Gas experience could be provided jointly with another company.

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SCHEDULE 3

RECIPIENT CAPABILITIES TO PERFORM THE SERVICE REQUIREMENTS

In this section, please detail your capabilities with regard to how you will meet the Service Requirements detailed under Schedule 2.

In doing so, please provide details of your specific expertise regarding the Service Requirements and your approach to service management activities and framework such as:

Service request fulfilment

Incident management

Problem management

Change management

Service level management and reporting

Project management

If the support is intended to be provided from outside of Australia, where this is located, and how it will be managed.

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SCHEDULE 4

SUPPORTING DOCUMENTATION

In support of its EOI, the Recipient must provide the following information:

A. OverviewProvide a brief introduction to your organisation.

a. Provide brief background of your organisation, and the business unit (if applicable) responsible for work such as that outlined here.

b. Your proposed approach in terms of service delivery with regards to use of third parties, partnerships and joint ventures (if any).

B. Relevant experience in providing support servicesAEMO is seeking to understand the level of experience of the Recipient in delivering similar services. State your experience and provide examples of delivering services with requirements similar to those outlined in this EOI. Of particular interest is the Recipient’s experience in providing operational support to systems in production. Provide details, specifying:

a. Who was the client?

b. What structure did you adopt for the delivery of your services (e.g. sole provider, prime contractor with sub-contractors, sub-contractor to another organisation, etc.)?

c. What were the major challenges of the role? What did you bring to the role that helped overcome any obstacles?

d. What resources were utilised and are these resources currently employed by you.

e. Knowledge management processes, in particular, what safeguards you have in place to ensure that the knowledge key resources have is retained within your organisation.

C. References

Please provide a minimum of two reference customers that AEMO could contact related to the supply of support services. Please provide the following details for each reference:

a. Organisation

b. Contact name

c. Contact telephone

d. Contact email

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SCHEDULE 5

CONFIDENTIALITY UNDERTAKING

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