Five of the six GB distribution network operators (DNOs) are currently trialling the Piclo platform, which aims to become an online marketplace for buyers and sellers of demand-side flexibility.
Piclo CEO and co-founder, James Johnston, says the emergence of new buyers of flexibility and simultaneous growth of new sources creates the need for a common platform.
While Piclo is currently a ‘matchmaking service’, providing visibility of where flex is needed and where it is currently available, it also aims to add auction functionality. But Johnson is acutely aware of the need to “start basic”.
“A lot of the industry is trying to run before it can walk, but the first functionality is visibility,” says Johnston. “Visibility on where there is congestion and where DNOs are looking for flex in the near future provides value to sellers. For buyers, the value is around visibility on what flex assets are available and where – they currently do not have that information.”
Providing that visibility requires data. Aggregators have that data, as do some suppliers and other third parties. Piclo wants them to put it onto the platform.
While such data is commercially sensitive, Johnston says they can control the level of data they provide, it can be anonymised, and data is not shared with any other flex sellers – only buyers.
“Uploading your data allows you to participate in tenders – it is a requirement for prequalification,” says Johnston. On the flip side, he says it is mutually beneficial for aggregators seeking new sources of revenue.
“DNOs need a bit of comfort that if they are going to be looking for flex, that it is actually out there and they are not wasting their time. If more people upload their data, it creates momentum [for more flexibility markets].
While Johnston and others believe in the need for common platforms, he agrees it is too early to think about that now.
“It is very useful to have emerging platforms. Standardisation in a transitioning market will lead to bad results. But I believe there will be natural consolidation,” says Johnston. “Look at the stock market, it is not a regulated monopoly but there are only two in the UK. I think that will eventually emerge in flex. There are a small number of parties focusing on different niches, so let that play out,” he adds.
“And if there weren’t any other players, we would be quite worried.”
This article was originally published in the 2018 DSR report. It also contains views on DNO flexibility procurement from UK Power Networks, which is using the Piclo platform, and Western Power Distribution, which does not.
Download the report, free of charge, here.