ILOG CPLEX Helps Spain's Red Eléctrica Save up to €100,000 a Day in Production Costs

ILOG Software Helps Utility Reduce Its Carbon Footprint By Two-And-A Half Percent

MADRID – June 24, 2008 – ILOG® (NASDAQ: ILOG; Euronext: ILO, ISIN: FR0004042364) today announced that Red Eléctrica de España (REE) - the company in charge of managing the power supply systems in the Canary Islands, Balearic Islands and the cities of Ceuta and Melilla – is using ILOG CPLEX® along with ILOG Optimization Decision Manager® and ILOG OPL Development Studio® as key components of its power supply strategy. Thanks to ILOG optimization technology, REE reduced production costs of these systems by one to two percent, which translates into savings of between 50,000 and 100,000 Euros per day. At the same time, REE has reduced its carbon emissions by two-and-a-half percent - which represents approximately 100,000 tons of CO2 annually.

Red Eléctrica de España was created in 1985 to manage the Spanish transmission system and operate the electricity generation. One of the most difficult challenges facing the utility is the “Unit Commitment,” which refers to the process of dispatching available power sources at the lowest possible cost. In parallel, due to the need to comply with the measures established by the Kyoto Protocol, Red Eléctrica de España needed to increase the use of renewable energy sources and to reduce CO2 emissions in Gran Canaria, dispatching all the available wind energy.

Prior to the implementation of ILOG optimization solutions, REE’s “Unit Commitment” responsibility was managed using an interactive mathematical methodology. Since calculating unit commitment requires a large number of variables to be considered, such as available generating capacity and other costs and restrictions over a time horizon, this home-grown solution had reached its limits.

REE selected ILOG CPLEX along with ILOG Optimization Decision Manager and ILOG OPL Development Studio to achieve an optimal “Unit Commitment” program. ILOG OPL Development Studio is used as the integrated development environment for building and maintaining the model of the “Unit Commitment” problem that is solved by ILOG CPLEX. Added during the second phase of the project, ILOG Optimization Decision Manager has brought the ability for planners to compare different scenarios, programs and production costs. It also enabled active users’ participation during the development phase and interactions during the solution search process. Thanks to these tools, REE’s Operations Research personnel can now test generation scenarios quickly and easily. In addition, from a development and maintenance viewpoint, there has been a significant reduction in associated costs, as well as in the duration of the processes.

”ILOG provided us with the right tools to better program the demand coverage in our power system,” said Mustafa Pezic, project director at Red Eléctrica de España. “This project also confirmed the fact that the integration of new mathematical methods into the optimization tools could enable us to design models of the power supply system complex features.”

ILOG Technology Supports Renewable Energy Strategy
Red Eléctrica has since extended its new “Unit Commitment” process using ILOG technology to include renewable energy sources. As a result of the application of ILOG optimization tools, the utility has been able to integrate safely the highest possible wind energy in the system. In addition to carbon pollution, REE was also able to use ILOG technology to determine that they could cut in half the use of noisy generators at night and therefore reduce its noise pollution.

More than 1,000 commercial customers, including 160 members of the Global 500, use ILOG optimization tools, engines and applications to solve the world’s most challenging planning and scheduling problems. These customers include APL, BNSF, JR East, Logistics, Maersk, Schneider, SNCF, United Airlines, the United States Postal Service and UPS in transportation and logistics; and Airbus, Coors, Dell, Hansol Paper, Michelin, Mitsubishi Chemicals, Nippon Steel, Nissan, Porsche, Saint Gobain, Thyssen Krupp, and Toyota in manufacturing. ILOG optimization products are also used by a majority of leading Supply Chain Management software vendors, including i2, Infor, Manhattan Associates, JDA, Oracle, Red Prairie and SAP, as well as in research programs at over 1,000 universities around the world, making the products the “gold standard” for performance and solution quality in the Operations Research community. For more information, please visit www.ilog.com/products/optimization.

A propos d’ ILOG
ILOG delivers software and services that empower customers to make better decisions faster and manage change and complexity. Over 3,000 corporations and more than 465 leading software vendors rely on ILOG's market-leading business rule management system (BRMS), supply chain and planning and scheduling applications, as well as its optimization and visualization software components, to achieve dramatic returns on investment, create market-defining products and services, and sharpen their competitive edge. ILOG was founded in 1987 and employs more than 850 people worldwide. For more information, please visit www.ilog.com

ILOG, ILOG CPLEX, ILOG Optimization Decision Manager and ILOG OPL Development Studio, are registered trademarks of ILOG S.A. and ILOG, Inc. All other company and product names are trademarks of their respective owners.