Piclo Response to UK Government’s decision to reject zonal reform of GB Wholesale Market
Clarity on Wholesale Market Reform Welcomed – Focus Must Now Shift to Pragmatic, Scalable Solutions
London, UK – 10 July – Piclo, the global leader for flexibility marketplaces, welcomes the fact that the UK Government has finally made a decision under its Review of electricity market arrangements (REMA) consultations. The announcement brings long-overdue clarity to the debate over zonal pricing - a discussion that has absorbed significant time, attention and resource across the industry.
Decision Reached – Time to Act
“We’re pleased a decision has finally been made,” said Matthew Billson, Director of Policy & Market Strategy at Piclo. “The energy sector can now move beyond debate and focus collective efforts on practical solutions that can be implemented quickly and cost-effectively.”
Piclo believes that while longer-term changes like zonal pricing may offer future benefits, there are immediate steps the industry can take - using existing mechanisms - to address system constraints, unlock value, and enable a smarter, more flexible energy system.
Local Flexibility Markets Are Ready Now
Local flexibility services, already being deployed across Great Britain, are a proven tool to reduce network stress and lower system costs. Regional constraint zones and local flexibility markets, such as those operated on through Piclo marketplace, offer practical, scalable solutions that can be implemented without delay.
“We don’t need to wait for complex redesigns or further consultations to get started,” added Matthew. “Flexibility markets are delivering today - they reduce curtailment, support renewable integration, and provide better outcomes for consumers and networks alike.”
Ofgem Must Embed Flexibility into Future Price Controls
In parallel with market design reforms, Piclo urges Ofgem to play its part by recognising and embedding the value of flexibility into its upcoming price control frameworks. Ensuring that distribution and transmission system operators are appropriately incentivised to use flexible solutions - not just traditional reinforcement, and embrace those solutions for operational decisions, will be essential to realising the UK’s Net Zero ambitions efficiently.
“Ofgem’s next round of price controls must continue to recognise the central role of flexibility,” said Matthew. “With continued regulatory signals, we maximise the opportunity to scale these solutions and deliver on the UK Government’s target of a decarbonised power system by 2030.”