Sign-up to receive monthly updates from Green Angel Syndicate, including analysis, commentary on recent news and information on wider events.
27 March 2019 (London) – Energy-tech company Piclo and Scottish and Southern Electricity Networks (SSEN) have signed a milestone deal for SSEN to use Piclo’s world-leading software platform to trade electricity flexibility. The commercial agreement is the first between Piclo and a UK distribution network operator (DNO). It allows SSEN to use Piclo’s pioneering flexibility marketplace to buy smart energy from providers through simple, transparent online auctions and identify areas of network congestion. This will push electricity prices down by increasing the transparency and availability of flexible energy supply and reducing the need for investment in new generation or network.
The deal follows Piclo’s successful 2018 BEIS-supported trial with all six UK DNOs and 175 smart and flexible energy providers comprised of 4GW or 2.8 million households worth of flexibility. It is Piclo’s first commercial contract as the company moves out of beta.
James Johnston, CEO and Co-Founder of Piclo commented:
“Today’s deal with SSEN is really important for Piclo following our successful UK-wide pilot. We’re delighted to be partnering with SSEN to strengthen its flexibility ambitions. Piclo was founded in response to the growing problems posed by UK electricity grid congestion which is restricting growth of low-carbon power, causing significant costs to consumers. Whilst some physical changes to the network will be required as we decarbonise, Piclo’s platform significantly reduces the need for new investment, minimising the cost to the consumer whilst maximising the role of flexible, low-carbon plant in the overall mix.
This deal will hopefully be the first of many, not only in the UK but with other grids across the globe which suffer from the same limitations. The potential reach for our software is enormous.”
Stewart Reid, Head of Future Networks at SSEN said:
“I am delighted that SSEN and Piclo are taking this significant step forward in delivering SSEN’s Proactive Flexibility programme, which could play an important role in supporting the UK transitioning to a low-carbon economy.
“SSEN is committed to being a neutral facilitator of local and national markets that are created by the transition to a flexible network. To do this successfully visibility, transparency and accessibility will be key. Too often asset owners that may be considering providing flexibility services find that the process is neither clear nor simple.
“By working with Piclo we are hoping to address that challenge, and in working with the communities provide a level-playing field that supports local solutions and builds a network of flexibility providers.”
Piclo’s tech platform enables visibility of areas of network congestion and correlates them with flexibility providers in nearby areas. This includes: demand-side-response (for example the way large supermarket warehouses can turn off fridges and freezers for an hour overnight to reduce overall demand on the system); batteries (for example back-up batteries in big banks and trading houses) and behind-the-meter generation (for example hospitals with onsite back-up generation). All these types of flexibility can be leveraged to minimise bottlenecks within the network.
The platform also gives DNOs control of local production, consumption and storage of power which will enable further integration of renewables and electric vehicles into the grid in a cost-effective way. It provides unprecedented transparency over the flexible plant available in network operator’s jurisdictions. Without Piclo’s solution, DNOs would be forced into expensive and potentially disruptive network reinforcement with implications for the consumers who pay for it and the local communities affected.
Payment for providing flexibility services will commonly consist of an availability payment and a utilisation payment, and typically be around £300/MWh. Providers will also benefit from a new streamlined approach to the procurement, auction, contracting and settlement processes that Piclo provides.
SSEN and Piclo previously worked together in making six sites across SSEN’s licence area, where there was constraint on the system, open to tenders for flexibility. Scaling the call for flexibility across the entirety of SSEN’s network creates the ability for more people to engage and benefit from the tremendous opportunities afforded by the transition to a smarter, more flexible electricity network.
As Piclo grows, the company is actively seeking more flexibility partners across the UK, expressions of interest from potential international clients and welcomes enquiries from investors and software developers to help support this exciting period of growth.
FTI Consulting +44 (0)20 3727 1000
Piclo develops software to make electricity grids smart, flexible and sustainable. The London based company has been building software for the energy industry since 2013. It has secured £2.5 million of funding, including grants from DECC and BEIS and private investment from Ian Marchant, former CEO of SSE and ran a successful pilot across all six UK DNOs and 175 flexibility providers in 2018. Piclo, chaired by Volker Beckers, has been named by Bloomberg as one of the UK’s top 50 Business Innovators and won Startup of the Year in 2015 at European Utility Week.
About Scottish and Southern Electricity Networks
Scottish and Southern Electricity Networks (SSEN), operating as Scottish Hydro Electric Power Distribution (SHEPD) and Southern Electric Power Distribution (SEPD) under licence, is responsible for operating and maintaining the electricity distribution networks supplying over 4.1 million homes and businesses across central southern England and north of the central belt of Scotland, the Mull of Kintyre and the Scottish islands.