Upgrade to Pro — share decks privately, control downloads, hide ads and more …

Flexibility markets: a UK case study

Piclo
December 13, 2022

Flexibility markets: a UK case study

James Johnston's presentation from Enlit 2022, featured at the Democratisation Hub

Piclo

December 13, 2022
Tweet

More Decks by Piclo

Other Decks in Business

Transcript

  1. © Open Utility Ltd
    Enlit 2022
    Flexibility Markets:
    A UK case study

    View full-size slide

  2. 2
    © Open Utility Ltd
    ● End-to-end platform to connect
    DSOs and flex service providers
    ● Competition-based approach to
    sourcing flex at lowest cost per MW
    ● Proven methods for engaging
    market & driving participation
    ● Ecosystem of FSPs to accelerate
    market liquidity
    Piclo is an independent marketplace for flexibility services
    Select clients
    2

    View full-size slide

  3. 3
    © Open Utility Ltd
    Local Flexibility markets set to be worth $10bn+ by 2029
    3
    DSO Flexibility Markets Participating Capacity and
    Revenue by Region, World Markets: 2020-2029
    Source: Chart data from Guidehouse Insights, Flexibility Markets and Enabling Technologies (Q3 2020)
    Flex revenue ($millions)

    View full-size slide

  4. 4
    © Open Utility Ltd
    Local flex
    flywheel effect
    4
    DSOs gain
    confidence
    ↑ need for
    flexibility
    ↑ FSP
    confidence
    ↑ market
    liquidity
    Increased stresses
    on the network
    Local flex
    transactions
    Stronger regulatory incentives
    More investment
    into flexibility assets
    Improved marketplace services

    View full-size slide

  5. 5
    © Open Utility Ltd
    Stronger regulatory incentives: RIIO-ED2 in the UK
    5
    The RIIO framework for Distribution System Operator revenues has shaped the UK into a leading market for flexibility
    services.
    New RIIO-ED2 begins in April 2023:
    ✓ Totex Incentive Model drives the most cost-effective solutions
    ✓ New DSO Incentive Mechanism
    ○ Baseline expectations: network development, network operation, market development
    ✓ £80m/year by 2028 on flexibility services outlined in DSO business plans
    Incentives
    Revenue Innovation Outputs
    + +
    =

    View full-size slide

  6. 6
    © Open Utility Ltd
    6
    DSOs are gaining confidence: UK market growth 2019 to 2022
    2019 2020/21 2022

    View full-size slide

  7. 7
    © Open Utility Ltd
    7
    Grids across Europe and US have accelerating levels of stresses based
    a multitude of factors:
    ● Continual increase in demand: new housing and growing urban
    centres, data centres and new industry
    ● Electrification of transportation and heat
    ● Distributed renewable generation
    ● Climate change and extreme weather
    ● Aging infrastructure
    Severe bottlenecks and grid stability issues are already present in
    multiple areas, these will only exacerbate further and spread across
    wider regions as we go through the energy transition.
    Increased stresses on the electricity networks

    View full-size slide

  8. 8
    © Open Utility Ltd
    Ad-hoc issues: support for maintenance works, abnormal power flows due to faults, extreme weather
    Voltage constraints: active and reactive power issues due to concentration of DER
    Network restoration: starting-up the local network again following power outages
    Increased need for flexibility
    8
    Forecast thermal congestion: reinforcement avoidance or deferral
    Unlocked with increased DSO ability
    Primary use case for local flex today
    Capacity allocation: better allocation and trading of capacity rights amongst connected parties
    Fault levels and inertia: ensuring system strength under high DER deployments
    Powerline loss: minimising losses through local balancing
    Asset conditioning: maximising lifetime of assets
    Networked microgrids: management of islandable, interconnected microgrids
    Future use cases
    Emerging use cases for local flex

    View full-size slide

  9. 9
    © Open Utility Ltd
    Improved marketplace services
    9

    View full-size slide

  10. 10
    © Open Utility Ltd
    Greater FSP confidence
    10
    Marketplaces translate greater need for flexibility into greater opportunities for Flexible Service Providers (FSPs).

    View full-size slide

  11. 11
    © Open Utility Ltd
    More investment into distributed flexible assets
    11
    Greater FSP participation leads to further
    investment into distributed flex assets - such
    as EVs, batteries, demand-response and
    generation.
    This is important as there is currently a
    greater need for flex than the current
    availability of flex.
    Assets registered on Piclo 2019–present day

    View full-size slide

  12. 12
    © Open Utility Ltd
    Increased market liquidity
    12
    Year
    Standalone
    capacity
    procured (MW)
    Number
    of bids
    Aggregate contract
    award (£M)
    2019 77 100 £1.1M
    2020 88 694 £14.5M
    2021 547 6,060 £40.0M
    Volume procured on Piclo by auction year Contracted volume by service month
    Sample of companies
    winning contracts

    View full-size slide

  13. 13
    © Open Utility Ltd
    Flywheel effect:
    lessons learned
    13
    DSOs gain
    confidence
    ↑ need for
    flexibility
    ↑ FSP
    confidence
    ↑ market
    liquidity
    Increased stresses
    on the network
    Local flex
    transactions
    Stronger regulatory incentives
    More investment
    into flexibility assets
    Improved marketplace services

    View full-size slide

  14. Book a demo
    [email protected]
    www.piclo.energy
    Get in contact

    View full-size slide