Having recently co-led an £8.3 million Series B investment round in the flexibility services marketplace provider, Piclo, we sat down with the deal team, Jan Palasinski and Anna Trendewicz, to learn more about our investment in Piclo and the opportunity we see in flexibility as part of the future energy system.

 

Why does FEV find flexibility interesting?

Grid flexibility is nothing new, but historically, it’s been done on the supply side with imbalances compensated by spinning reserves in coal and natural gas plants. As the power grid infrastructure was significantly oversized, grid congestion was never an issue. But those days are gone. As renewable electricity becomes the foundational energy source for most areas of economic activity, demand and supply patterns are changing. The power generated by wind and solar assets is intermittent, less predictable and decentralized by nature, which means that supply side flexibility is rather limited, at least until much more short- and long-term storage solutions are built out. This is accompanied by rapidly growing electricity demand, meaning grid bottlenecks are becoming a challenge and location becomes an important parameter for power system balancing. In this new system architecture, flexibility is becoming more of a demand side feature in the form of battery energy storage (both utility scale and behind the meter), intelligent charging of electric vehicles, and the steering of consumption (e.g., heat pumps, white goods) with time of use energy tariffs.

The distributed energy market has created many business opportunities resulting in a growing number of digital-first startups including flexibility aggregators, energy trading platforms, grid management software and flexibility marketplaces. And it’s an enormous potential market: the flexibility market could reach $260 bn by 2050, a 20x increase from today’s size, meaning there are abundant opportunities. In addition to the financial prospects, flexibility also has a high climate impact potential; we calculated that up to 5GtCO2 of cumulative savings are possible by 2050, which is equivalent to approximately 12.5% of today’s global annual greenhouse gas emissions[1].

It’s for these reasons we’ve been following the flexibility space with great interest for some time and ultimately decided to invest in Piclo. Piclo is a startup that has developed the leading local energy flexibility marketplace in Europe and has been recognized as one of the companies best positioned to solve tomorrow’s clean technology challenges in this year’s Global Cleantech 100 list.

 

Why did you invest in Piclo?

Since it was established 10 years ago, Piclo has become the UK market leader, and has started its international expansion into Ireland, Italy, Lithuania, Portugal, and the United States. In addition, the company recently won its first competitive tender issued by a transmission system operator, National Grid ESO, to help address one of the fastest growing costs of operating the UK power grid – the Local Constraint Market. This brings the company to the next level in terms of scaleup potential. And we believe there’s much more still to come.  When it comes to solving grid congestion, Piclo’s flexibility platform is the only proven-at-scale and ready-to-deploy solution in the market, which makes us believe that most grid operators will engage with piclo at some point.

One other thing we particularly like about Piclo, is its role as a facilitator; it’s ability to unlock increased profitability for all market players, thus generating value for the whole energy system. The more grid and flexibility operators use Piclo’s platform, the deeper Piclo will be able to support them through the development of new functions and services, eventually bringing distribution, transmission, and wholesale flexibility markets closer than ever. This is the bold vision of Piclo’s founders – James, Alice, and Andy – and it’s a vision we share. And that’s why we invested in this Series B round and are so excited to embark on this next stage of the flexibility journey together!

If you want to learn more about Piclo, please don’t hesitate to reach out: contact@fev.vc

[1] /flexibility-the-key-to-accelerating-energy-transition/

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