Demand For Flexibility Leads To Trading Platforms

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Distribution system operators need more flexibility to manage congested networks

This article was originally published by Fereidoon Sioshansi in the EEnergy Informer newsletter. Fereidoon can be reached at Reprinted with permission.

As variable renewable generation increases across the globe and consumers turn into prosumers and prosumagers, the once predictable and unidirectional flows of electrons in the distribution networks become multidirectional and unpredictable. The situation is likely to get worse with the rising numbers of electric vehicles (EVs), which need to be charged – and potentially discharged – at homes or work. The combined effect of behind-the-meter (BTM) distributed generation, storage, and EVs are likely to put increased stress on an aging distribution network that in many parts of the world barely manages to keep the lights on.

Not surprisingly, distribution network operators (DNOs) in many places are looking for better ways to cope with the increased complexity of flows without having to invest massive amounts on upgrading the network – which are not necessarily uniformly stretched to their limits everywhere and/or at all times. With better tools, they can identify where the network is stressed, why and when, allowing them to better manage flows across the network. Having flexible loads, storage, or generation — which they can manage in real time — are among the least cost solutions for relieving stress on the distribution networks.

A number of start-ups have emerged in the last few years to assist DNOs in this task, including Piclo, a London-based company offering flexibility services via an open platform, previously featured in this newsletter.

Piclo has managed to get all 6 large DNOs in the UK to join a trial of Piclo Flex, its flexibility marketplace. In a press release in early Dec 2018, Piclo said a more flexible network could save £17–40 billion ($22–51 billion) across the UK’s electricity system to 2050.

Among other things, Piclo Flex provides visibility of the DNO’s need for flexibility and offers streamlined procurement services and online auctions.

Western Power Distribution (WPD) recently joined 5 other DNOs, UK Power Networks, Scottish and Southern Electricity Networks, Electricity North West, Northern Powergrid, and Scottish Power Energy Networks to trial the Piclo platform, according to the press release.

All DNOs are looking for making better use of available flexibility across their franchise license areas by enhancing the visibility of their unmet flexibility needs thought sharing the data on Piclo Flex’s open platform. Ben Godfrey, WPD’s Network Strategy Team Manager said, “Allowing our flexibility needs to be displayed on Piclo Flex should drive more participation and build upon the visibility already available on our website’s Network Flexibility Map.”

James Johnston, CEO and Cofounder of Piclo, added, “For the first time, flexibility providers will be able to access virtually all flexibility opportunities on the network across Great Britain through a single platform, via the same format and using common processes.”

Johnston explained that all flexibility providers – including aggregators, electricity suppliers, energy brokers, local councils, community groups and large industrial customers – can join the Piclo Flex platform for free. By doing so, they can view all existing DSO flex opportunities and be notified when new opportunities arise. They can use the matching tool to check if their fleets of flexible assets match with DSO requirements before progressing to online auctions.

As an open platform, Piclo Flex is agnostic to all types and scales of assets, from industrial batteries and demand response schemes, to residential storage heaters and electric vehicles and/or those with EV charging stations. The aim is to bring all buyers and sellers of flexibility services on the network to an electronic marketplace to trade.

Innovative companies such as Piclo stand to play an important role by offering flexibility services to DNOs. As in any platform business, success depends on scale, and the platform gains from the network effect — the more traffic that is directed to the platform, the more popular it becomes and the more services it can offer at lower costs, hence attracting more customers to the same site while offering expanded services. ■

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