European utilities create B2B portal

A group of 12 major European utilities companies have agreed to create a European business-to-business (B2B) portal for procurement exchange, Italian electricity company ENEL announced last week.

The companies will create an electronic market for buyers and suppliers in the utilities sector, initially focusing on the electricity and water industries, ENEL said in a written statement. The consortium intends to begin online exchanges in the third quarter, making use of online auction mechanisms.

The portal will be operated by a specially created independent company 80 per cent controlled by the signatories of the agreement. The remaining 20 per cent will be available for industrial and technological partners, suppliers and management.

So-called ‘coopetition portals' can reduce transaction costs by up to 70 per cent and sales costs by up to 50 per cent by streamlining the procurement process online, according to Peter Graf, vice president for Internet technology at SAP. "In coopetition, competitors get together to create a marketplace," Graf told the SAP Sapphire conference in Berlin last week.

"It helps them to work together when purchasing but lets them compete again when selling."

The companies participating in the project with ENEL are EDF of France; RWE of Germany; Spanish companies Endesa and Iberdrola; Electrabel of Belgium; British companies United Utilities, Scottish Power, Northern Electric and National Grid Company, along with Vattenfall of Sweden and NUON of the Netherlands.

The portal will use an independent and open technology platform with the aim of integrating online procurement practices of participating companies and of allowing broad access to suppliers, the statement said.

Overall procurement by the 12 companies currently amounts to about 30 billion euros ($48.5 billion) per year, with a large portion of that amount expected to move on to the new portal, ENEL said.

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