The Department for Business, Energy and Industrial Strategy (BEIS) has revealed the winners of a competition to accelerate development of flexibility exchanges, awarding £2.2 million across two projects.
The lion’s share of the funding – £1.6 million – will go to the TraDER project, which aims to create a market for multiple flexibility services.
It is expected to go live within the next few months and will for the first time allow generators to buy space on the power grid by trading network capacity with flexibility providers. This could include, for example, a windfarm paying a gas generator to turn down during windy weather.
The consortium running the project is led by the tech start-up Electron. Co-founder and chief executive Joanna Hubbard said: “We want to make it easier for distributed energy resources to play their full role in lowering the cost and carbon intensity of managing the grid.
“This starts with delivering the world’s first marketplace for network capacity: a market in which renewable generators can pay flexible assets to make space for them on an increasingly congested grid. This means we can bring more low cost, low carbon generation into the system and create new revenue opportunities for clean technology operators.
She continued: “Longer term, TraDER also presents us with an opportunity to bring together previous work on aligning and simplifying asset registration processes and coordinating flexibility markets through price signals. We believe that these are the key enablers for transparent, liquid markets that will support the transition to net zero.”
The consortium also includes EDF Energy, Elexon, Scottish and Southern Electricity Networks, the Energy Systems Catapult, Community Energy Scotland, United Utilities and Kaluza.
“Today’s infrastructure fails to grasp the full value at its fingertips,” said Kaluza head of flexibility Conor Maher-McWilliams.
“Through an intelligent energy platform, connected devices in the home are already providing flexibility to the grid and saving customers money off their energy bills. However, this new flexibility will be able to go so much further if traded within a co-ordinated, agile system that responds in real time to the grid’s needs.”
Meanwhile, Piclo has been awarded £562,000 of funding to expand its existing Piclo Flex platform – which is already utilised by all six of the distribution network operators (DNOs) in Great Britain to help manage network constraints – into a “one-stop shop” for all types of flexibility services.
Among other things, the Piclo Flex Exchange will allow the secondary trading of balancing and ancillary services for the National Grid Electricity System Operator (ESO). It is expected to go live later this year.
Piclo co-founder and chief executive said: “This project marks the beginning of a very exciting phase for Piclo. It draws on our experiences of running the UK’s leading platform for DNO local flexibility procurement and our prior experience of developing the UK’s first peer-to-peer local energy trading platform.
“I believe the Piclo Flex Exchange will be a game changer for the UK electricity system, providing participants with a first tangible glimpse of what systems and platforms will be required to run a democratised and decentralised net-zero energy system.”
As well as the ESO and DNOs, the trial will involve the more the than 250 flexibility providers already registered on the Piclo Flex platform.
They include the solar developer Anesco, whose asset management director Mike Ryan said: “Piclo Flex Exchange is a decisive step in the right direction, creating a nimble marketplace with low barriers to entry, where multiple parties with a variety of assets can offer up and be rewarded for the flexibility they offer. All of Anesco’s assets are registered on Piclo’s platform and we are excited to see the results of the project.”
Commenting on the funding announcement, energy and clean growth minister Kwasi Kwarteng said: “If we are to end our contribution to climate change by 2050, it is vital that we explore innovative methods to integrate low carbon sources into our energy system.
“Building an online marketplace where households and businesses can trade flexibility will make our system more efficient and reduce energy bills.”
Both trials will conclude in March 2021 and report back to BEIS by the following December.