Piclo launches trading exchange for Capacity Market contracts

Piclo has launched a secondary trading exchange for Capacity Market contracts where participants can buy and sell existing contracts with other qualified providers.

Piclo Exchange was developed with the help of National Grid Electricity System Operator – the delivery body for the Capacity Market – as part of the Department for Business, Energy and Industrial Strategy’s Flex Exchange innovation project.

Piclo said the marketplace will make trading opportunities visible and available in one place, deliver the best prices through competitive auctions and streamline the trading process. It noted that there have been almost 300 secondary trades of Capacity Market contracts in the last two years, worth between £15 million and £35 million.

The company also operates the Piclo Flex marketplace used by distribution network operators to conduct local flexibility tenders. It said the new exchange could also be opened up to secondary trading of these and other contracts in future, enabling participants to stack and optimise revenues.

James Johnston, chief executive and co-founder of Piclo, said: “Piclo Exchange is an industry-first and will directly contribute to creating a more transparent and effective secondary market in the Capacity Market. Previously, a lack of visibility in the process for Capacity Market secondary trading was a barrier, with no open way to know who was looking to trade or how to get the best price.

“Our new marketplace offers compelling new revenue and de-risking opportunities for Capacity Market providers which will make the market more efficient and liquid. We are looking forward to welcoming new Capacity Market providers and encourage them to register to join the growing number of ten plus active providers who have already come on board.”