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As part of the Business, Energy and Industrial Strategy (BEIS) FleX competition, Piclo has collaborated with National Grid ESO and Flex Providers across the energy sector to develop an online exchange for flexibility markets.
Read Part 1 “Diving into Capacity Market secondary trading” our co-blog with LCP here.
We are now excited to launch Piclo Exchange, a secondary trading marketplace that allows users to buy and sell existing flexibility contracts from other qualified users. The first secondary market open to users for trading is the Capacity Market (CM) and for the first time, Capacity Market Providers can register to sell and buy contracts on the marketplace.
If you are interested in registering or signing up for a demo, please email exchange@piclo.energy.
Why Piclo Exchange?
The goal of the project was to add additional value streams to the Piclo Flex marketplace, such as through optimising participation and enabling revenue stacking across multiple flexibility markets (ESO and DSO), via one interface. We focused on secondary trading markets because of their strategic importance to the development of liquid, accessible and competitive flexibility markets. Secondary markets benefit Flex Providers by providing additional revenue streams and de-risking participation.
You can read more about this in our previous blog “five things you should know about secondary markets''.
The Piclo Exchange marketplace aims to bring the same benefits of visibility, competitive prices and streamlined processes to secondary trading, as Piclo Flex has to DSO flexibility markets. The first secondary market open to users is the Capacity Market, although the marketplace is adaptable to enable secondary trading in other markets (such as DSO flexibility markets).
Through conversations with both National Grid ESO and CM participants, we learnt that a big obstacle to secondary trading in the Capacity Market is a lack of visibility. This is because the existing process for CM secondary trading relies on individual emails and phone calls to find and negotiate trades with other CM participants, with there being little visibility of who was looking to trade.
Enabling secondary trading on a marketplace platform, such as Piclo Exchange, will increase the visibility of opportunities by locating them all in a single place, facilitate a more streamlined process for trading agreements and drive more competitive pricing through a bidding auction.
How to trade on Piclo Exchange
To execute a trade on Piclo Exchange, users go through a set of simple steps:
*Piclo is working with the EMR team at National Grid to understand the requirements to integrate Piclo Exchange and the National Grid EMR platform to avoid participants having to do this step.
As Piclo Exchange is in its early stages, we are looking for ways to continually improve the experience for users and are encouraging as much usage and feedback as possible. If you are a Capacity Market participant and would like to register and get a demo of Piclo Exchange please contact us at Exchange@piclo.energy.