Greece is testing a new electricity-market structure that could create an additional revenue stream for factories, EV fleets, commercial buildings and distributed energy assets. The pilots also aim to give grid operators an alternative to some conventional network reinforcement. The work involves transmission operator IPTO, distribution operator HEDNO, power company PPC, market operator HENEX and flexibility-platform provider NODES.
Projects involving IPTO, HEDNO, PPC, HENEX and NODES are examining how distributed resources can sell flexibility to both transmission and distribution networks. The pilots focus on avoiding conflicting dispatch instructions while coordinating national and local network requirements. Distributed resources considered in the programme include commercial and residential demand, water heaters, air-conditioning systems, distributed generation and other controllable electricity assets.
DSO flexibility procurement alongside network investment
A Greek demonstration under the European OPENTUNITY programme is testing a market where IPTO and HEDNO act as flexibility buyers. Aggregators combine distributed resources and offer them into a system intended to coordinate national and local network needs. In this structure, the emergence of the DSO as a potential customer is highlighted as a key commercial change.
In the pilots, distribution operators are described as normally addressing network constraints through infrastructure investment and operational measures. A flexibility market provides an additional option by paying customers to temporarily change electricity behaviour when and where the network is constrained. The approach is framed around situations where a transformer is overloaded only during a limited number of hours each year.
The programme describes demand reduction during those hours as potentially cheaper than immediately replacing a transformer. It also states that flexibility would not eliminate conventional grid investment, particularly where constraints are structural. The pilots indicate that flexibility could defer expenditure, improve utilisation of existing assets and help network companies target capital more efficiently.
The market design described in the pilots links congestion with potential revenue opportunities for market participants. It also distinguishes between the value of local flexibility across locations. Reducing one megawatt of demand in an unconstrained area may provide little value to HEDNO compared with reducing demand behind an overloaded transformer.
Locational product and verified flexibility payments
The programme describes locational flexibility as creating a market where the same megawatt can have different value depending on where it is delivered relative to network constraints. It lists potential participants including factories, supermarkets, hotels, office buildings and EV-charging depots. These assets are described as commercially valuable when they can change demand at the right network location.
The pilots describe the product as not merely electricity but a verified change in electricity consumption or production at a specified place and time. If Greece commercialises the model tested in the demonstration, electricity customers could begin receiving payments partly based on where they are connected to the grid.
Aggregator revenue stacking across balancing and local markets
The programme indicates that local DSO flexibility could expand the business case for aggregators. It notes that an aggregator already participating in balancing markets could add local DSO flexibility as another source of revenue. A portfolio containing factories, EV chargers, commercial buildings, heat pumps or distributed generation is described as being optimised across several potential markets.
In the pilots’ description, an industrial load might be most valuable to IPTO for national balancing at one moment. At another moment, the same asset could earn more by helping HEDNO relieve a local network constraint. The aggregator’s role is described as deciding where each megawatt of flexibility has the highest value.
The programme also links this decision-making to portfolio optimisation requirements for distributed assets whose economics may be difficult to justify from electricity-price optimisation alone. It further states that local network payments could provide an additional revenue stream without requiring asset owners to become electricity traders.
EV fleets and building systems as dispatchable resources
The pilots describe EV fleets as having transport as their primary business rather than electricity trading. When dozens or hundreds of vehicles remain connected for several hours, charging can often be shifted within operational limits. An aggregator could reduce charging during a local network constraint and increase consumption later.
In this framework, the fleet operator could receive a flexibility payment while ensuring every vehicle is sufficiently charged when required. A similar mechanism is described for commercial buildings using air-conditioning, heating, refrigeration or ventilation systems capable of temporarily modifying electricity consumption without materially affecting occupants or operations.
Industrial consumers are described as able to participate through pumps, compressors, thermal processes or other flexible loads. Local flexibility is presented as a mechanism for turning operational flexibility into income tied to network constraints.
Buy-versus-build decisions and longer-term contracting options
The programme identifies distribution companies as having potentially the biggest commercial impact from local flexibility procurement. It describes traditional network planning as capital-intensive due to needs such as new transformers, substations and cables when demand increases or distributed generation creates congestion. Local flexibility introduces a buy-versus-build decision for whether DSOs invest immediately in physical capacity or procure flexibility during constraint hours.
The pilots state that infrastructure will remain the better solution in some areas while flexibility could defer reinforcement for several years in others. They describe this shift as creating a measurable economic benchmark based on avoided or deferred costs of conventional grid investment. The approach is also described as enabling longer-term flexibility contracts rather than purely short-term electricity-market transactions.
A DSO facing constraints for several years in a particular network area could potentially procure guaranteed flexibility from local resources. This is described as providing more predictable revenues for aggregators and asset owners and making investment in automation easier to finance.
HEDGE-IoT data exchange supporting verification and settlement
Greece is also examining related concepts through HEDGE-IoT, involving IPTO, HEDNO, PPC and HENEX. The programme combines flexibility procurement with exchange of operational data among market participants. It describes that data layer as creating another commercial market.
A local flexibility system needs information on where participating assets are located, how much flexibility they can provide, when they are available and whether activation solved the relevant network problem. This creates demand for meter-data platforms, grid analytics, forecasting software, automated dispatch, flexibility verification and settlement systems.
Rules for multiple buyers of one asset
The Greek model tests how one asset can have several potential customers within emerging flexibility markets. It describes cases where IPTO may want an industrial load to reduce consumption for national balancing while HEDNO may need different behaviour due to local congestion at the same time. A supplier or aggregator may have another incentive depending on participation across markets.
The pilots state that rules governing priority, availability and settlement are needed because of these overlapping requirements. They also describe opportunities for companies able to coordinate assets across several markets to capture more revenue from the same physical infrastructure without double selling capacity.
An EV charger, heat pump or industrial process is described as potentially generating value from electricity-price optimisation, balancing services and local network flexibility at different times within coordinated rules aimed at revenue stacking without double selling the same capacity.
Potential expansion into energy services procurement
If pilots move into commercial procurement, the programme describes consequences extending beyond traditional electricity-sector players. Aggregators would gain a new market while industrial companies could monetise flexible operations through participation in local arrangements.
The pilots also describe EV charging companies adding grid services to charging revenues and building-management companies turning HVAC systems into dispatchable assets. Energy-software providers are described as selling optimisation and settlement platforms alongside HEDNO gaining an alternative to some network reinforcement.
The framework further states that electricity customers could begin earning revenue from assets they already own if commercial procurement follows from the pilot work in Greece.