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 approach also aims 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 objective is to avoid conflicting dispatch instructions. The pilots are framed around how flexibility procurement could operate across national and local network needs.
Flexibility procurement for DSO and TSO requirements
In the Greek model, a local flexibility market would allow customers such as industrial consumers, EV charging operators or commercial buildings to receive payments for changing electricity consumption or production. The payments would be tied to when that change has value to the grid. This shifts the customer role from managing electricity primarily as a cost.
For HEDNO, procuring flexibility could provide an option alongside reinforcing cables, transformers and substations. A local flexibility market would therefore create a new local electricity-market value chain. In this structure, HEDNO acts as a buyer of flexibility.
A Greek demonstration under the European OPENTUNITY programme tests a market where IPTO and HEDNO act as flexibility buyers. Aggregators combine distributed resources and offer them into a system designed to coordinate national and local network requirements. The resources can include commercial and residential demand, water heaters, air-conditioning systems, distributed generation and other controllable electricity assets.
The key commercial change highlighted in the pilot is the emergence of the DSO as a potential customer for flexibility. A distribution operator typically addresses network constraints through infrastructure investment and operational measures. The flexibility market adds the possibility of paying customers to temporarily change electricity behaviour when and where the network is constrained.
Locational value and congestion-linked payments
The pilot describes cases where a transformer is overloaded only during a limited number of hours each year. In those circumstances, purchasing demand reduction during the relevant hours could be cheaper than replacing the transformer immediately. It also states that flexibility would not eliminate conventional grid investment where constraints are structural.
Flexibility procurement could instead defer some expenditure, improve utilisation of existing assets and help network companies target capital more efficiently. It also links congestion to potential revenue for market participants. The value of flexibility is described as location-dependent rather than uniform across all areas.
The model distinguishes between reducing one megawatt of demand in an unconstrained area versus behind an overloaded transformer. It says the former may provide little value to HEDNO while the latter could be substantially more useful. This creates a market for locational flexibility where verified changes in consumption or production at specified places and times are traded.
Aggregator revenue pools and participation by flexible assets
The approach is described as expanding the business case for aggregators already participating in balancing markets. Aggregators could add local DSO flexibility as another source of revenue alongside other services. Portfolios containing factories, EV chargers, commercial buildings, heat pumps or distributed generation could be optimised across several potential markets.
The pilot notes that an industrial load might be most valuable to IPTO for national balancing at one moment. At another time, the same asset could earn more by helping HEDNO relieve a local network constraint. In that setup, aggregators would decide where each megawatt of flexibility has the highest value.
The model also highlights that local network payments could provide additional revenue without requiring asset owners to become electricity traders. It points to distributed assets whose economics may be difficult to justify through electricity-price optimisation alone. It further describes how EV fleets can participate through charging shifts within operational limits when vehicles remain connected for several hours.
An aggregator could reduce charging during a local network constraint and increase consumption later using fleet flexibility. The fleet operator would receive a flexibility payment while ensuring vehicles are 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.
Buy-versus-build decisions and longer-term contracting
The pilots describe distribution companies as having the biggest commercial impact from local flexibility procurement. Network planning is described as capital-intensive, with new transformers, substations, cables or other equipment often needed when demand increases or distributed generation creates congestion. Local flexibility introduces a buy-versus-build decision for DSOs.
The choice described is whether to invest immediately in additional physical capacity or procure flexibility during the relatively small number of hours when constraints occur. In some areas infrastructure would remain the better solution, while in others flexibility could defer reinforcement for several years. Flexibility is presented as creating an economic benchmark based on avoided or deferred costs of conventional grid investment.
The pilot also describes longer-term flexibility contracts rather than purely short-term electricity-market transactions. A DSO expecting constraints in a particular network area for several years could potentially procure guaranteed flexibility from local resources. This would aim to provide aggregators and asset owners more predictable revenues and support financing of automation investments.
HEDGE-IoT data layer 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 the data requirements for location of participating assets, available flexibility amounts, availability windows and whether activation solved the relevant network problem.
This data layer creates demand for meter-data platforms, grid analytics, forecasting software, automated dispatch, flexibility verification and settlement systems. It also states that software is needed to connect thousands of customer assets with network operators in close to real time. The infrastructure behind the market is described as potentially becoming commercially important alongside the flexibility itself.
Multiple buyers for one asset under priority rules
The Greek model tests how one asset can have several potential customers within emerging flexibility markets. IPTO may want an industrial load to reduce consumption for national balancing while HEDNO may need different behaviour from the same asset due to local congestion conditions. Suppliers or aggregators may have additional incentives depending on their roles in different markets.
The pilot says rules are needed governing priority, availability and settlement when multiple buyers compete for access to flexible capacity from the same physical resource. It describes opportunities for companies able to coordinate assets across several markets to capture more revenue from shared physical infrastructure. It also notes that an EV charger, heat pump or industrial process could generate value from electricity-price optimisation, balancing services and local network flexibility at different times.
Potential expansion into energy services procurement
If pilots move into commercial procurement, participation could extend beyond traditional electricity-sector players described in the programme materials. Aggregators would gain a new market while industrial companies could monetise flexible operations through participation in these mechanisms. EV charging companies could add grid services alongside charging revenues.
The model also describes building-management companies turning HVAC systems into dispatchable assets. Energy-software providers are referenced as selling optimisation and settlement platforms supporting these services. It further states that HEDNO could gain an alternative to some network reinforcement while electricity customers could begin earning revenue from assets they already own.
The pilots are described as testing whether local network capacity itself can become a market product rather than being solved only through engineering investment. Under this approach, congestion solutions would include purchasing part of capacity competitively from customers already connected to the grid in addition to conventional reinforcement decisions.