Southeast Europe’s regional electricity market is entering a phase in which value increasingly depends on capabilities beyond the power plant itself. Software that controls generation and demand, companies that optimise merchant revenues, and organised marketplaces for longer-term contracts are becoming more central to how assets are financed and operated. Developments involving METLEN, GEN-I and the Hellenic Energy Exchange illustrate this shift.
This article is powered by Virtu.Energy. The examples span asset control, market optimisation and longer-term contracting. Together, they show how competitive performance can depend on who manages an asset, how it is traded and how future revenues are contracted.
Digital platforms combine generation, demand and flexibility
Greek energy group METLEN is expanding its virtual power plant capabilities after acquiring energy-software company Joule and its jHub platform. jHub is being developed to manage portfolios that combine renewable generation, conventional plants, storage and large electricity consumers. The aim is to coordinate these resources rather than manage each asset in isolation.
Early electricity aggregators mainly represented renewable generators in wholesale and balancing markets. They managed forecasting errors and helped smaller plants participate without setting up their own trading operations. The emerging approach is broader, combining renewable generation with flexible consumption, conventional assets and storage so that a portfolio can operate more like a single virtual power plant.
In this model, the commercial objective is to maximise the value of the portfolio as a whole, rather than the revenue of each asset independently. If renewable output falls unexpectedly, another resource may respond: an industrial customer could reduce demand, a battery could discharge, or a thermal unit could adjust output if technically and economically appropriate. Software identifies the available response and turns physical operating limits into commercial decisions.
This is distinct from conventional energy supply. Core capabilities include forecasting, telemetry, automated dispatch, market access and real-time optimisation. Physical assets remain essential, but more of their value is managed through the digital systems that control them.
Energy software enters acquisition strategies
METLEN’s acquisition also points to the potential role of technology purchases in energy-company expansion. Companies have traditionally grown by acquiring generation capacity, customer portfolios or trading businesses, while future acquisitions could increasingly target software firms. Developing an advanced energy-management system internally can require years of technology development, market integration and operating data.
Buying an established platform can provide quicker access to the digital infrastructure needed to manage more complex portfolios. This makes regional energy-software companies strategically valuable. As Romania, Bulgaria, Croatia and Serbia expand the role of aggregation and flexible demand, firms able to control thousands of distributed assets could attract interest from utilities, traders and infrastructure groups seeking regional growth.
The value of these companies may extend beyond software-licence revenue. It can also come from their ability to make hundreds of separate physical assets function commercially like one controllable power plant.
Optimiser performance affects project revenues and financing
A second change concerns the companies that operate flexible portfolios in electricity markets. Slovenian trader GEN-I says its early experience in Bulgaria shows that commercial performance can vary by as much as 30% depending on the optimiser controlling a flexible asset. This is a company observation, not an independently established market average, but it highlights the investment implications of optimisation.
Assets with identical technical characteristics can produce different financial results depending on how they are traded. Results can be affected by market selection, bid timing and forecasting accuracy, as well as how the optimiser manages the asset’s state. Dispatch decisions also need to account for technical limits and equipment degradation.
A weak optimisation approach can leave revenue unrealised even when equipment performs as designed. As a result, lenders financing flexible electricity projects may need to assess more than equipment warranties, engineering, procurement and construction (EPC) contracts, and grid connections. They may also scrutinise the optimiser, including its experience in the relevant market, historical performance, response to changing market conditions and financial capacity to support revenue guarantees.
The optimisation agreement is therefore becoming a core project contract. Investors may need to assess not only the technology but also the counterparty responsible for trading the asset and standing behind any contractual commitments.
Revenue guarantees and market competition shape optimisation
More sophisticated commercial arrangements can allocate market risk in different ways. Under pure merchant optimisation, investors remain exposed to future electricity-market conditions; a revenue-floor agreement transfers part of that exposure to the optimiser, while a tolling structure can shift more market risk away from the investor. Profit-sharing sits between these approaches.
In a typical profit-sharing model, the owner receives an agreed base level of revenue and the optimiser retains part of the additional value above predefined thresholds. This aligns incentives and increases revenue visibility, but the strength of the arrangement depends on the counterparty providing the guarantee. A small technology company may have an effective algorithm but lack the balance-sheet capacity to support a multi-year minimum-revenue commitment.
A larger trader or utility may be able to combine digital optimisation with liquidity, credit support and access to multiple markets, a structure that could favour consolidation. The market may include specialised software firms, large optimisation counterparties and integrated utilities combining both capabilities. For project investors, choosing the optimiser is increasingly part of the investment decision.
Competition is also likely to affect returns. Early flexible assets can earn unusually high revenues when the supply of balancing and optimisation services is limited, but those returns do not necessarily remain unchanged. Greater competition can narrow arbitrage spreads and reduce balancing-service revenues, while market rules continue to evolve.
Optimisers therefore need to shift between opportunities rather than depend on one trading strategy. Algorithmic execution and access to multiple markets become more important as a plant forms part of a wider trading system that can compare value in the day-ahead market, intraday trading, balancing services and other flexibility products. The optimiser needs both the capability to capture revenue and the financial strength to support contractual promises.
HEnEx reports growth in bilateral-contract activity
A third development concerns the contracting of longer-term electricity exposure. On October 21, the Hellenic Energy Exchange (HEnEx) said its bilateral-contract platform had reached 29 members. The number of offers rose 88% year on year to 64, representing 54.4 TWh of offered energy rather than completed transactions.
Expressions of interest increased 78% to 48, and 24 offers were accepted. The figures remain modest compared with large European forward markets, but they mark an expansion in organised bilateral activity. Generators, suppliers and industrial buyers are seeking more structured ways to manage electricity exposure beyond short-term spot markets.
Southeast Europe has developed increasingly interconnected and liquid day-ahead and intraday exchanges, while longer-term contract markets remain less standardised. Generators, suppliers and industrial consumers often rely on private negotiations, brokers and bilateral relationships. A generator seeking a five-year buyer may not know which industrial customers want that product, while an industrial company may receive few proposals because potential sellers are unaware of its interest.
An organised bilateral platform can reduce this information gap. HEnEx’s figures also indicate that longer-term procurement involves more than a headline price: around 60% of negotiations concerned price, 42% covered contract duration and 29% addressed the generation profile.
Contract terms and matching develop alongside the platform
The shape of electricity supply affects its value. A flat annual profile is not equivalent to solar-heavy daytime generation, and a three-year contract carries different risks from a ten-year agreement. An industrial buyer may choose to fix only part of its consumption and leave the remainder exposed to short-term markets, while a generator may prefer several counterparties instead of one long-term buyer.
This creates a portfolio approach to bilateral contracting. The market is not limited to power purchase agreements (PPAs); duration, delivery profile, price formula and credit terms can all form part of the electricity product. HEnEx plans to widen regional participation and improve its offer-matching capabilities.
A platform that only publishes offers functions mainly as a digital noticeboard. If it actively identifies compatible buyers and sellers, it can operate more like an organised contract market. Over time, standardised durations and delivery profiles can make offers easier to compare; greater standardisation can support liquidity, and increased liquidity can attract more participants.
That process could create network effects similar to those that helped develop short-term exchanges. For Southeast Europe, it would address a gap between liquid spot trading and fully bespoke bilateral deals.
Regional markets build out the supporting infrastructure
The METLEN, GEN-I and HEnEx developments cover different parts of an emerging market structure. METLEN and Joule concern control: combining generation, demand and flexibility in a digital portfolio. GEN-I’s Bulgarian experience concerns performance and financial risk, including how effectively a portfolio is traded and whether a counterparty can provide bankable revenue protection.
HEnEx’s platform concerns the infrastructure for managing longer-term exposure beyond spot-market trading. Together, the developments span asset control, optimisation, contracting and financing. Greece provides some of the clearest examples, supported by relatively advanced retail, trading and aggregation markets, but the opportunity extends across the region.
Romania is developing one of Southeast Europe’s largest flexibility markets and is already attracting specialist optimisation providers. Bulgaria is generating early operating experience in merchant asset optimisation. Croatia is widening participation for independent aggregators and redesigning its balancing market, while Serbia is creating the legal and operational separation between electricity supply and independent aggregation.
Montenegro is developing flexibility frameworks at transmission system operator (TSO) and distribution system operator (DSO) levels. As these markets mature, physical electricity assets will increasingly need the digital and commercial infrastructure now emerging in Greece. This could create a regional class of energy companies that own little generation but hold software platforms, flexible customer portfolios, trading algorithms, optimisation contracts and counterparty relationships.
Digital and commercial capabilities complement physical assets
The traditional electricity-sector investment question focused on who owned the plant. The next investment cycle adds questions about who controls and trades it, who carries merchant risk, who finds the counterparty, who guarantees revenue and who owns the data needed to make those decisions.
These questions shift part of power-sector value towards intangible capabilities, although the power plant remains essential. Southeast Europe’s electricity market could be shaped by companies able to connect physical assets to software, software to trading strategies, and those strategies to bankable long-term contracts. This article is powered by Virtu.Energy.