First GB secondary capacity market trade recorded on Piclo Exchange

Piclo Exchange’s first secondary capacity market trade was completed between Vattenfall and Enel X for 2,847MW worth £185,000 (US$222,000).

The trade marks the first competitive bidding for contracts on the secondary market in Britain and was the outcome of three contracts receiving a total of five bids.

Piclo Exchange is an extension of the Piclo Flex independent marketplace for trading flexibility services, which has been adopted by distribution network operators in Britain and elsewhere.

Piclo Exchange emerged out of the government supported FleX Exchange trial, which was undertaken with National Grid as part of its electricity market reform activity and capacity market providers to address barriers to secondary trading in the market.

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With the capacity market intended to encourage investment in generation capacity, demand side response and storage to meet peak energy demand in the medium to long term and current government proposals focussed on strengthening the market including its penalty regime, secondary trading between providers of Capacity Market Units (CMUs) that are no longer wanted or unable to be fulfilled opens the way for optimisation of the market.

James Johnston, CEO of Piclo, said the company was pleased to have delivered its first secondary capacity market trade.

“While we see huge potential for secondary markets in the efficient decarbonisation of existing CMUs, further reforms to secondary trading mechanisms are needed to better support this crucial sector.”

Since its launch in 2021, 33 capacity market providers have registered on Piclo Exchange, enabling them to find, bid to buy and sell existing contracts with other qualified providers in a single marketplace and 35 contracts have been advertised.

Tony Whittle, head of Enel X UK & Ireland, highlights the role of digital tools in enabling energy transformation.

“Thanks to Piclo, we were able to identify this secondary trade opportunity and efficiently complete the transaction, ultimately allowing us to deliver more value to our I&C customers whose operational flexibility supports the security of electricity supply for all.”