A discussion that came up during a visit to OpenLink’s Vienna office recently was what the definition of optimization was. OpenLink has historically sold its IRM optimization software but is optimization actually a defined and understood software category? I think that we concluded that probably it wasn’t a very well understood or defined term and could use some clarification.
What OpenLink’s IRM solution actually does is provide a number of integrated components under the heading optimization that includes things like Long/Mid/Short term supply-demand planning including transport and storages for multi-commodity portfolios, Gas portfolio optimization including pipe and bulk (LNG) transport, maintenance scheduling, unit commitment and economic dispatch, re-commit and re-dispatch for intra-day. To do all of this, they utilize both deterministic and stochastic analysis. The solution includes workflow, time series management, auditing and an integrated ETRM solution as well. However, using an open architecture approach, the IRM optimization suite can also be used with other OpenLink systems as well as with third-party ETRM solutions.
In terms of multi-commodity portfolio coverage, the IRM team emphasized that they can handle a lot of complexity such as heat, steam, power, ancillary services of various types, LNG liquefaction, gasification and much more. For hydro optimization, OpenLink believes that they uniquely include head optimization that is very important when looking at hydro cascades or the impact of renewables.
In retrospect, the term optimization appears to mean modelling of complex assets and systems in the physical energy business and OpenLink IRM, with 60 customers, has been one of the leaders in this area for many years.
The company has also been quietly working on updating and renewing its code and approaches. For the last 4-years they have been working on a new 64 bit matrix generator in C++ that will allow longer planning horizons and larger portfolios to be handled. The new matrix generator will be launched sometime in 2016. The company has also added multiple value buckets for time series that allows essentially a best available value approach particularly useful for natural gas.
However, it is the work the company has done on open architecture that intrigued me as much as anything else. OpenLink IRM has defined both an Open Architecture that it terms the user defined extension framework (UDEF) and Software Development Kit (SDK) to allow users to build incremental functionality outside of the core software meaning that users can customize their IRM components but still take upgrades from OpenLink IRM. IRM uses the same UDEF area to add functionality as well and cited the EMIR and Remit functionality as having been built using UDEF allowing customers to take it without requiring an upgrade. Third-party models can also be added using this approach essentially opening up the IRM optimization framework.
An all new management team, a new office and facility in Vienna and a new role all seems to suggest that OpenLink is positioning IRM to become increasingly visible while helping to define what optimization is. It will be interesting to watch.