05 - How local flexibility markets work with James Johnston (CEO @ Piclo)

Hi, guys. I'm here with James. We're in London at Piclo HQ, and today, we're going to talk about all things flexibility and flexibility markets. So James, let's do it. Great to have you on, and thank you for hosting us in your new office.

Thank you very much. Pleasure to be here.

So first thing I want to start with is, who is James Johnston? How are you here? What's Piclo? Why are we talking?

So I'm the CEO and co-founder of Piclo.

We've been running Piclo now since 2013. Prior to then, I was in academia trying, to believe it or not, design the internet of energy.

Being inspired by how the internet has transformed communication and through decentralization. And taking some of those lessons and trying to apply them in the energy world.

And yes, it's tough trying to really innovate and transform the energy system. It's really important, but it's a big challenge, as I'm sure you know as well.

Yeah, definitely. So how long has Piclo been going now?

We're in our ninth year.

QUENTIN SCRIMSHIRE: Wow. Congrats.

I like to think of it as a story of two halves.

We actually started off our journey going down a different path, and we did classic start-up pivot about four or five years ago. Which was really an interesting and challenging moment for the company. So in a way, we feel quite young because we've been focusing on our current problem sets for only the last number of years.

And Piclo, the company, what's the problem that you solve? Who's the customer, and what's the problem that you solve for them?

Great. So Piclo is an independent flexibility marketplace, which means we have two customer sets. We have the buyers and the sellers of flexibility. So on the buyer side, we have the distribution networks or the distribution system operators, DSOs. And then on the seller side, we have flexibility providers.

So DSOs like UK Power Networks, Western Power Distribution, WPD, those kind of companies? Just for the folks who are listening who maybe don't know the jargon?

Yeah. Another way of thinking of it is I like to do analogies with the road networks. So you got the transmission networks, who are the equivalent of the motorways run by national--

or owned by National ExaGrid in England. And then, you've got the A and B roads, which are the distribution networks, where they take the power to the last mile to the home.

So we're working with the distribution side of things, and it's very interesting. It's a new application for flexibility. So flexibility, as we know, has been around for a while.

QUENTIN SCRIMSHIRE: OK, James. What is flexibility?

Backtrack a second. And flexibility is a really interesting concept because first thing I like to say is it's actually invisible. It's actually filling in the gaps where, for example, to get to a decarbonized energy system, we all know we need a lot more renewables.

Renewable energy is intermittent, and flexibility is essentially filling in the gaps when it's not sunny or when it's not windy. That's a key role of flexibility. It's being able to change demand or generation to meet the external requirements. In this case, balancing renewables.

An alternative use case, and this is the new use case that we're looking at, is managing congestion on the network. So where there is too much concentration of demand in a specific location--

For example, if a whole entire street of people install Tesla superchargers and try and charge them at the same time, you're going to create a problem on the network. So that would be a use case for essentially providing a service or flexibility service to the grid operator to manage the grid effectively.

So smart management of traffic jams on the B roads, to use your analogy?

JAMES JOHNSTON: Yeah, exactly. Exactly.

So you've managed to explain flexibility in a way that we've been trying for months and haven't really been able to figure it out. Neil is nodding, our sound guy.

So what's the vision of Piclo? What's the opportunity? And where are you guys aiming at? Aiming for? Aiming at?

I think what we have carved out is a new business model, that of an independent marketplace. Because there are quite well-defined, traditional models. There's the aggregator model. There's the DSO model. There's energy suppliers. There's developers, but this independent marketplace model in flexibility is brand-new.

So we're cutting new ground with this, and I think the challenge for the last couple of years is really working out what we are as an entity.

Where can this go?

What is the big-picture vision for the company? And I think there's a really exciting journey for this sort of platform marketplace in the future.

Not just on the local congestion needs with the distribution grids, but actually supporting all different kinds of flexibility and potentially even wider energy products to be traded. So the vision is basically--

Big.

It's big. It's providing an open, transparent market platform where anyone that has an energy product that needs to be--

They need to buy, or purchase, procure, they can advertise on the platform, and anyone who has something to provide that service, they can meet that, and bid in, and win those contracts.

Cool. So I think that all makes sense. What I'm going to try and do is tell you what I think Piclo is, and then you're going to tell me it's wrong, right? So my experience of Piclo until now, from when I worked at kiwi power--

And you guys are coming--

Man, you guys moved so fast. So kudos for moving fast and building products that look really nice.

Aggregators and asset owners for people who own generators, or have some flexibility, or pumps, or DSR, and that kind of thing. They can register those assets on your website, right? On your platform?

The other side of the customer, the other side of the marketplace, which is the DNOs. They can procure that flexibility from them. Is that right?

So they can pay the generator to switch on, or the pump to run slower? Or the DSR to kick in, or the air conditioner or whatever is connected? And you guys are the matchmaker in-between. Is that right? I almost said Tinder for.

[INTERPOSING VOICES]

Everyone's on Tinder for.

Don't go down there. Don't go down that route.

I'll accept eBay for energy, but let's not go any further down that route. Yes. Broadly speaking, that's right.

I like to think of it as the first step in the marketplace is visibility, and it's not just--

It's visibility in both sides. So visibility of what flexible assets are out there.

That's really important for the DSOs and system operators in general. And on the other side, it's visibility of the need of flexibility, the requirements that the network has. And we provide that bidirectional visibility.

The second part is yes, the matchmaking process, and that's--

Again, it's part of quite a regulated procurement process that we're supporting. And as procurement processes go, it has to be open, transparent, fair and all that sort of stuff. And there's a number of different steps from qualifying the providers, the companies, but also qualifying the technical solutions.

Then the third part is the auctions.

So ensuring that the best price is put forward for these contracts.

And that's what we got on offer in the UK market to date. Now, the exciting thing is coming this year is we're actually expanding the product suite quite a lot.

The next step, we're--

If you step back a moment, what we've built so far is a really effective procurement tool for DSOs to procure flexibility. The next obvious step for us is moving into the operation space. So helping the DSOs and the flex providers with both availability declarations--

So if an asset is no longer able to provide a service, declaring that to the DSO and dispatch notifications. So finding a streamlined way of receiving instructions to actually operate your asset.

And we're not stopping there. We're going even further.

So the next thing we're working on, and we'll be releasing later this year, is our settlement module. So actually plugging into the meter data, using the information on what was dispatched, looking at the performance that was actually delivered by the assets, and generating an invoice on behalf of the flex work there.

So fully integrated?

That end-to-end service. It's really exciting. We're going from 1/3 of the offering to the full offering in one year.

Awesome. That sounds ambitious.

Yes, it is.

And how are they doing this at the moment? Is this humans doing this with spreadsheets? And then you guys are going to put it in the cloud and do it all automatically?

Yeah. In essence, yes. Yeah. It makes a lot of sense to bring it onto one platform.

For example, you look at the concept of settlement where ultimately, you're creating an invoice. This is really important for providers. How are they going to get paid? In order to calculate that, you need to have access to the contract information.

What's the agreed service that you've put forward? You need access--

Are these like frequency response services? Like store services? Do you get paid for about availability--

Let's take it back a step.

What are the services? What does a service mean?

In the UK, the DSOs have defined four standardized services. Now, when you look internationally, they're using slightly different names, but in essence, they're the same concepts. And the way I like to break it down is into how far in advance you are looking for that service, or you're committing that service.

So you could be getting a contract, which is an availability contract, availability and utilization, up to seven years in advance. And the DSO is getting some sort of certainty that there's going to be an asset there that can provide a service. And essentially is paying quite a lot for them to be available and then pays them an additional amount once they get dispatched.

And that's kind of like a capacity market-type arrangement but on a local level.

That's a long contract. I didn't realize they went that long.

Yeah, yeah, yeah.

And then you've got day ahead or near real-time, which can just be utilization only.

Oh no, I've got an issue on the network I need to solve. Is anyone able to provide a service?

And that's just utilization. So you have quite a range, and then you have post-faultish contracts as well, re-store. Kind of like Black start but, again, on a local level.

I'm going to pretend I'm a company who has a backup generator, and I don't really use it. And I want to make some money with it. And the local distribution network substation is not overloaded, but it's constrained. And instead of building more transformers, they go, I'll tell you what, Quentin.

We'll pay you to use your generator when we need it, and we won't have to spend money on reinforcing that substation. That's the idea, right? So then I get a contract for seven years, and the DNO pays me for what? I know this is a service, and there's four types of service. Do I have to switch on at the same time every day? Do I have to ramp up? How does that work?

Again, there are different types of contract. There are scheduled ones, which are pre-agreed. Yes, you switch on at this time of the day for this service, or they're more bespoke ones, which are like you agree to be available for these two hours a day. But you don't need to do anything unless we call on you and say, actually, now we need you.

Now, what we see quite typically, and this is where the real interesting thing is. The number of utilizations is actually quite low because the grid is actually quite well-designed. So the number of times where a constrained network is actually close to its limits in any given year is very infrequent.

So being available and providing that service, being on-hand to provide a couple of hours of service a year, is so much more cost-effective than upgrading the entire network for those few hours a year.

This gives so much away, though, about how overbuilt our network capacity is yet underutilized most of the time. How much additional copper is there installed that perhaps isn't necessary for 99% of the time. It's an optimization problem, and you guys are solving it, which is incredible.

I love the way that Piclo are coming about this. This is a software and optimization problem, not a put more copper in the ground problem, which is awesome. We should be using these systems smarter, not building more systems.

Yeah.

And the subtlety is we still need to have--

We still need to invest in more infrastructure because you're going to double the energy consumption of the UK over the next couple--

electrical energy with EV and heat coming onto the grid. But instead of doubling the size of the grids in 10 years, it's been here for 100 years. We're going to double it in 10 years. That's just not going to happen.

You can have a more sensible, in terms of targeted investments--

We really need to build more network infrastructure here. But actually, over the 90% of the cases, it's just a flexibility contract. For a provider, let's say a storage provider, that is actually stacking up revenues from all the National Services as well. And this is just an extra chunk of revenue that you can add onto the stack.

QUENTIN SCRIMSHIRE: Nice.

Can we talk about energy storage for a second? Because at Modo, we're obsessed with energy storage, and it's a key part of the future energy system. New assets like energy storage, new systems like Piclo for optimizing the new energy system, and then people participating in these systems in a different kind of way.

So if I'm building battery assets in the UK, should I be getting excited about accessing revenues through Piclo for these assets? And how do I quantify that? How should I think about that?

I think it's a really interesting one because when you look at distribution constraints, the sweet spot is actually the smaller assets because just statistically, there's more of them. You're more likely to get in the right location. So actually, residential-level assets are perfect if you can get enough of them.

But low megawatt, single-digit megawatt battery systems and more numerous of them is a better strategy to even just target the DSO revenue streams. If you've got a very large, 10, 20, 30 megawatt group, the chances it's going to be in the right location are lower.

So that's the subtlety, but I think the point is the DSOs are very much trying to think about this as a complementary service to all the other revenue opportunities. So if you happen to be in the right location--

Or if even you've got a choice to choose between various other locations, just check out where the flex--

the DSO flex opportunities are. Because it's additional revenue. It's additional service. You're going to get better return on investment.

So if I'm developing a site, or I'm choosing--

The funny thing is, and we've seen a lot of these at Modo.

There's a lot of developed sites out there. Everyone, if you're trying to sell developed sites, you may sell potential future benefits that can't really be realized yet. And something that often appears in slide decks in the sales packs is future flexibility revenues from being connected to a DNO substation, which is constrained.

But there's no number on it. There's no pound figure. There's nothing like that. They'll just go, watch out in the future. You'll be able to access Piclo or something like that, and you'll be able to figure it out. And it's in a great location to make money. And we're always a little bit skeptical of this.

So can customers log in to Piclo, put in their post code, and see what's available at that substation? Is that something they can do?

Yes.

Awesome. So for all the folks who are listening to this and developing sites who are interested, so they can go to that site. They can find out where it's connected and find out information through your service about whether there's future revenue streams on offer right now?

Yes.

Exactly. And one thing that we're going to be bringing on is actually being able to look at the historical contracts as well because that might give you an indication where there might be opportunities as well in the future. So yeah. But yeah, you can log in. We've recently released our post code checker service, so yeah, that's all available.

Awesome. And what do you think about--

How are DNOs thinking about energy storage? Because you know DNOs probably better than everybody. How are they thinking about energy storage? And what are the opportunities for storage in this new world of decentralized, distribution-connected flexible assets?

And not just big.

Small storage, too. Storage in general.

Obviously, they're thinking, first of all, this is a level playing field, so they're not targeting specific technologies. They're open to all technologies. Let the best technology win, both in terms of being able to provide the right service in the right location at the right cost. What we're seeing is storage is one of the fastest-growing areas alongside vehicle charging, smart vehicle charging.

I think it's one of the exciting areas, and I think from residential up to small single-digit megawatt scale systems. And I think it's probably because the reason why it's quite an exciting area is, excuse overuse of the word flexible--

As long as it's not the word blockchain.

But I guess the flexibility of you can have Greenfield sites, or you can choose where you're going versus I think some of the challenges around demand response is you're working with an existing system. So I think there are some inherent benefits about being able to move faster and provide a service to the DSO. We're seeing a wide variety of different technologies.

I want to talk about numbers for a second. I'm going to put you on the spot because you haven't done any prep for this. I know because I didn't give you anything to prep for. So how much money goes through Piclo's service?

How much value is being created on Piclo's service? And how many megawatts--

I guess you're on gigawatts now.

--are connected to the system that you have data on and can participate in these services?

Yeah.

Well, I did a quick scan just before just because I knew you were going to catch me out.

So some numbers for you. So in terms of contracts awarded on the platform, so we've been live for three years. So over the past three years, there's been 55 million pounds of contracts, and it's growing rapidly.

So last year was approximately 80% of that volume.

So it's going up and to the right, as they say.

So 55 million. That's translated into 670 megawatts of contracts.

In terms of the assets, which are registered on the platform, it's much higher. So we have 15 gigawatts of assets.

Roughly half of these are operational. They exist in the UK system, and the other half are in various stages of planning, or development, or connection process.

And that's quite an interesting distinction because you don't need to have an existing operational asset to take part in DSO services, especially if it's for a long-term contract. You can take part of a planned asset.

So I guess anyone who's building an asset anywhere in the UK should be registering their assets on Piclo to figure out--

Just to have a look, and then you will notify them, I imagine, if something comes up for their assets?

JAMES JOHNSTON: Yeah, yeah. Exactly.

So it's a no-brainer. You're developing an asset, make sure it's on Piclo.

Yeah.

Cool. And you said 55 million pounds of contracts. So that's a lot of money, and is that--

How much of that is utilization? And how much is availability? I'm really putting you on the spot.

I don't know, but I think a bunch of that is the multi-year contracts. So I wouldn't say 55 million is the size of the DSO market per annum. It's probably about a fifth of that. But yeah, over the course of multiple years--

Because, again, it's like the model is more similar to capacity market contracts where you're signing up a multi-year contract.

Now, I think the DSOs are very interested in signing up more operational assets as well and getting more into the shorter-term requirements. And I think that's going to be a real area of focus for this coming year, too.

Awesome.

So do you cover all DSOs in the UK?

All geographies? Or is it just some? How does it work?

So we're working with three in the UK at the moment. So that's UK Power Networks, SP Energy Networks, and Electricity Northwest.

With those three clients, there's a real good coverage from--

Actually, we cover England, Scotland, and Wales. So yeah.

Can people register assets in locations that aren't under those three? Can they still put those assets on your system--

They can. Yeah, yeah. Exactly. Yeah.

Cool. One thing that we've got to talk about is the regulator--

the regulatory environment. So your customers, if you like--

One of the customers. You're a matchmaker. But one of the customers is a highly-regulated, monopolistic company. A lot of them, but monopolistic companies in those particular areas, the DNOs, who are going through this massive change to become much smarter and more ready for the 21st century, really.

How do you find engaging with those kind of customers? Because they're heavily regulated, and they've got rules they have to follow.

Kudos for getting three of them to sign up contracts with you. Because I imagine the sales cycle is really long, and the contracts are really complicated. And there's a bazillion people who have to check them.

So what's it like working in the heavily regulated side of the industry? And how do you do business there?

I think, yes, on the surface, it's probably the most regulated part because of the inherent design of the market. But when you look into it, with the fact the real methodology where the DSOs are--

And by the way, I interchangeably call them DSOs or DNOs.

I know there's a bit more of a formal definition, but I like to think of them as all DSOs. Or at least notionally.

Did I call them DNOs? Did I get it wrong?

The plot thickens when you look internationally because in Europe, they only call them DSOs.

They don't have the DNO name, so if you use the European lingo, it's all DSOs. And that's what we're using. But in the UK, they've split it into two where the DNO is the incumbent business model infrastructure, and the DSO is the smart part that they're transitioning into.

But we just focus on the smart part anyway, so we call them all DSOs. And you look at the way that they're incentivized, and their business model leaves a lot of room for innovation and basically doing new approaches. And the UK, and GB specifically has set this standard worldwide.

What you call this TOTEX model, which is not CAPEX, just CAPEX-focused. I.e. install more capital networks, but actually, if you find a smarter way of managing the networks through an operational OPEX solution, then you get rewarded and incentivized to do that. And this is a really key, niche--

the really important tool for networks to have the mandate to do these innovative things.

And as I said, the UK--

Sorry, the GB DSOs have had this mandate for a long time, since 2015. Other countries are just catching up now.

And what that means is there is actually quite a lot of space for new ways of doing things. So when we developed a marketplace in the first instance with UK Power Networks as our first partner, there was no prescribed way of doing this.

We basically went to first principles. We spoke to the users, both on the DSO procurement teams and the flex provider teams.

And from first principles, we worked at what problems they had, and we developed the marketplace from there. So it's actually, compared to, for example, the retail market, which is highly prescriptive--

And there isn't actually much room for, in my view, innovation in the retail market--

How pretty is your app, basically?

Well, you know.

And there's a lot of consumer protections and worries around that, et cetera.

And compared to parts of the DNO value chain, for example, the network charges and et cetera, which are also very prescriptive. When you look at flexibility, it's actually quite wide open about how this is all going to work.

So there's a little niche here where there's not a huge amount of prescribed rules, and Ofgem is taking quite an enlightened view of going, learning by doing is a really good approach. Let's just make sure that we create an ecosystem, and we move things forward. And other countries are starting to look and copy this, which is really exciting.

Yeah, let's talk international now. So you guys, you say your product's been up for three years. Platform's been going three years in the UK, and you pretty much signed--

You're widely-known as the flexibility people for DNOs.

So now, the question is, where do you go internationally? Which countries are you most excited about? What's the plan?

I think the way that we look at our business growth is looking at actually three dimensions of growth.

The first one, I already mentioned around an end-to-end system, operations, and settlement. The second area of growth, which we can come back to, is actually adding on additional markets to the platform, additional types of products to trade. And then the third one is this international expansion.

Now, the exciting group of countries that we're looking at is the EU, generally, and the reason why this is very interesting is because of an EU directive, the clean energy package. Actually, funnily enough, specifically it puts an obligation on all DSOs in Europe to procure flexibility ahead of reinforcement.

QUENTIN SCRIMSHIRE: That's huge. Not dumb it down, but to explain what that means. That means that DSOs have to look at operating the system smarter rather than spending the money and putting new transformers in the ground and cables, right?

JAMES JOHNSTON: Yeah.

So they have to do that first?

So the EU directive comes in, and basically that needs to be transferred into national law, legislation, regulations, and then get adopted by DSO. So there's a couple of chain reactions that need to go on here before it gets implemented, but what we're seeing is a scramble across all of EU for DSOs and regulators to think about how they're going to do this setting up pilots--

Very excellent lobbying from Piclo. Very well-planned.

Yeah. No, it actually just comes from everyone's looking at what the UK has done and seeing that it's working here. And this is growing. And therefore, they're going, well, let's go down that route. So it's very exciting. There's a whole lot of things to come this year. I can't say too much right now, but watch the space.

And then in terms of back in the GB market, we've made quite a lot of progress on our second market that we've been working on, which is the Piclo exchange. And this is a slightly different model. Instead of a procurement-type model where you've got a regulated system operator on one side and the provider, this is actually more of a bilateral exchange between participants.

QUENTIN SCRIMSHIRE: This is like the open energy days. Not open energy, sorry, the open--

Utility.

QUENTIN SCRIMSHIRE: Open utility.

Yeah.

QUENTIN SCRIMSHIRE: So you've gone back to your roots of peer-to-peer energy trading?

Yeah, yeah, yeah. More or less.

But yes. So the first product that we've looked at is capacity market because secondary trading of capacity market is already allowed and is part of the system.

And it's so messy. I want to hear about it because having been involved in secondary trading transactions, man, what a mess.

Yeah. So you've got the EMR portal where you qualify, you participate--

QUENTIN SCRIMSHIRE: To the people who run the capacity market?

Yeah, yeah. And this is where if you agree with someone to transfer your contract with, you log it in this portal. And the incumbent situation is there's no way to discover, find trades, agree, negotiate with counterparties.

They call you aggregator, right? And then they know everybody, and then they match-make for you.

Yeah. This is why we thought it was a great idea as our next product. Because we already have a load of capacity market participants already signed up, and basically, we've been working with funding from Baize and under the flex exchange program.

Throughout last year, we were trialing under beta, beta environments, to try and see if we can actually improve the dynamic. So it's early days in this project. We've signed up 23 casting market participants. We've had about just under 20 contracts advertised.

We've almost had two transactions, but the pricing and the bidding didn't quite line up. So there's some really interesting learnings there. But I think this is a really exciting growth area for Piclo as well.

So how does it work?

I'm always talking about batteries again. So I own a battery, and I've got some spare capacity on my capacity market contract. And I want to trade it with someone, so someone else can provide that capacity. And so, what I used to do in the old days is call up everyone in my phone book and say, do you know anyone who wants to buy this thing?

And now, instead, I go to Piclo on the--

What's the product called again?

So it's still under the Piclo flex. PicloFlex.com, and then you would have to register to be part of the exchange.

And it's free of charge, again.

You register. You're part of the exchange, and then, you go on. You basically fill out the details of the contract that you want to offload, and then you launch it. And you wait for some bids to come in.

And people swipe right or swipe left, right?

JAMES JOHNSTON: Something like that.

I'm really excited for Piclo, this exchange product, just because hopefully, it will widen the market, and it will provide more transparency. And it should be more efficient as a market, which is good for everybody. You'd think.

Very exciting. And so, the future of that product--

So you're doing capacity market at the moment. Does this mean that potentially in the future, we'll be able to trade, I don't know, a dynamic containment contract and a secondary market by advertising it on Piclo, and someone else buying an EFA block, for example? Is that something that might happen in the future?

Yeah.

We're not limiting our vision for this product.

The way to think about this is you've got an exchange. It's actually got three parties to it. You've got the two parties that want to trade, and then you've got essentially the market owner or the market administrator who needs to be notified of a trade.

And that's the dynamic. So capacity market is the EMR portal managed by national grid here. So basically, you want at the moment--

So this is in the beta version. You'd have to agree to trade on Piclo and then go on to their portal and go through the normal processes. There's clearly some improvements that we can make in that process through an API integration and streamlining it. And that's on our roadmap as well.

But then there's other kind of products. For example, back onto the DSO network, why can't you trade your spare connection capacity? Or if you're seeking additional connection capacity, but there's none available, can you not purchase that from someone that's not using it?

That's cool.

And again, it's that three way work. So you've got the counterparty is negotiating the commercial deals, and then you're getting approved by the DSO, DNO in that area. So that's something we're looking at this year as well.

Anything on grid connections is going to be welcome because really, when push comes to shove, the thing that's stopping energy storage getting built right now? It's not land. It's not capital. It's not investor appetite. It's connections.

There is so much connection capacity out there that's being underused. If we can solve that, that is a massive--

That would accelerate the deployment of energy storage and therefore have a huge impact on our decarbonization goals.

Yeah. Whatever we can do to help you do that, then I'm just saying the door's open at Modo

I'm going to move back in time a little bit now. There's something we've got to talk about because at Modo, we went through a big pivot when we first started the company. We're going to do optimization software and sell it to asset owners. And pretty much nine months in, we threw everything in the bin, and started again, and became the company we are now.

That pivot was almost a pivotal, which, of course, it was by nature. But it was crucial.

Without it, we probably wouldn't have succeeded or got to where we are now. Success is difficult to define, and we've got a lot to do still.

How did you do that? Because lots of companies, lots of people don't get to experience what it feels like emotionally--

It's a start, but operationally as a business to do that. So what did it feel like to do that? How did you make the decision? And where did you start out, and where did you end up--

Obviously, it's Piclo is what it is. But what were you starting off to do? And how did you know that the timing wasn't right? Or the product wasn't right? Or the customer wasn't right? How did you make that decision?

Broadly, our vision and mission has always been the same. It's about creating a marketplace for decentralized energy, and our first approach was because look at the three founders. I come from academia and the theoretical end of the energy market, and my two other co-founders came from the tech world.

We didn't know the first thing about regulations or actual business models, and some might call us naive. And we, from that perspective, from a technological perspective, we developed--

Again, we had some pretty cool technology that was a peer-to-peer transactive energy platform and not based on blockchain, by the way.

You'll never be able to raise money if it's not on a blockchain.

And then we had a solution.

We're looking for a problem, and what we basically ended up on--

We didn't want to become an energy supplier. It wasn't in our DNA. We're a software marketplace, and therefore, we went down the route of partnering with suppliers. We had an innovation project.

And we applied our technology, and basically, it was OK. We had some commercial customers. It was being used, but it you described it as vitamins rather than painkillers. We weren't really solving a really important need. It was like providing a bit of transparency to corporates about where their energy was coming from.

I think that's the real challenge. Knowing when to give up on something and to move on versus just keep plugging on--

keep going and plodding on in the direction. Persist, and you might make it. And sometimes, you're never going to make it on that particular path. You got to go two steps back to go somewhere else.

What enabled us to take the different direction was some innovation funding.

That we could then essentially have these two things living in parallel. That was tough because I had my mind on this future product, and I was pushing it forward. And the rest of the product team were maintaining this old product. And their day-to-day was not great because they knew this thing was dying, but still, we had customers we had to maintain.

The tricky thing, as I was saying, was actually surviving and pivot.

Knowing whether to pivot, I think it becomes pretty obvious when you've had your 100th meeting with a VC, and they had the same message come back to you that way this is not going to work as an idea.

And then you it's a good idea to pivot. But pivoting itself is the hard bit. Keeping the company together in that process.

The type of people, the bravery and the resilience of the people around you to put up with that whole process and stick at it.

It brings you together in a way you can't even imagine. I'm going to get emotional now.

Just to finish up. So let's talk future energy system. What's your vision of the future energy system? What are we looking at in 10, 20, 30 years? And how is technology going to enable it?

I spent a lot of time thinking 10, 20 years in advance, so this doesn't--

This comes easy to me. So I have quite a clear view, and this actually comes back to what I was doing before Piclo open utility and thinking about the internet of energy. I think that, for me, is the right concept of where this--

when the energy system is going to go is think a bit more literally about creating an internet of energy.

Now, one way to describe this is what we're seeing right now is decentralization of energy resources. So the grid edge devices going from a few big power stations to millions of end nodes. But we still have basically one network that's centrally controlled. I think the way to describe this real disruptive change is actually decentralization of network control.

That, for me, rather than thinking of it as one network, having a network of networks, i.e. an inter-network, of connected island--

These networks that can operate in island mode and operate, connect together. And that, for me, is the real disruptive change that the sector's going to go through over the 10 to 20 year time frame.

Now, energy storage is key to all of this. Energy storage everywhere is maybe a nice note to end on. But yeah, that's my view.

Wicked. Well, you heard it here first. James from Piclo says energy storage everywhere. And yeah, it doesn't matter however you think about it.

Decentralization is everywhere. We're getting decentralization of everything outside of energy, and it is going to be really apparent in energy in 10, 20 years.

But let's see. James, I won't take any more of your time. I just want to say thank you for coming on. For anybody who's watching or listening to this, please do remember to subscribe, hit like, and make sure you give some feedback. What did you think of the discussion? Let us know in the comment section, and until next time, thank you very much for coming on.

Thank you.

Thank you.