In the CLOB

Platforms all the way down?

This post ventures into some energy industry history, which we recast as ‘platform history.’ The history was mostly new to me at this depth, I had glimmers of it only. The background is fascinating, and also important, I think, for an informed and well-rounded view of today’s developments…

The more we look at things the more we realise how much more there is to explore. Many of you are experts, who have been part of this history from the beginning and know this material deeply. As ever, please let me know if you find inaccuracies or mistakes, and I look forward to the comments, directly or below.

In our Compare and Contrast series we’ve been looking at companies shaping the future of energy flexibility in Germany, from short-term optimisation to virtualisation and market making. Is there common infrastructure beneath the contrasting approaches, or a platform they all build on?

Compare and Contrast II.

Consider the obvious candidate for an answer to this question: directly or indirectly, most energy industry actors ultimately ‘meet’ on the intraday continuous market. We might say that this is the common transaction layer for flexibility, the one layer nobody can avoid, the ‘plumbing,’ if you like.

A stylised representation of CLOB Plumbing.

Platforms take many forms, from stock exchanges to dating clubs, as Evans & Schmalensee point out. What unites them is that they set rules and infrastructure for interactions.

Let us think of the intraday power market as a shared base layer, as plumbing in the sense of hidden but essential infrastructure, yet also as a platform in the sense of codifying rules of interaction.