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 while giving grid operators an alternative to some conventional network reinforcement.
Projects involving transmission operator IPTO, distribution operator HEDNO, power company PPC, market operator HENEX and flexibility-platform provider NODES are examining how distributed resources can sell flexibility to both transmission and distribution networks without creating conflicting dispatch instructions.
The commercial significance is straightforward.
Today, an industrial consumer, EV charging operator or commercial building primarily manages electricity as a cost.
Under a functioning local flexibility market, the same customer could also be paid for changing when it consumes or produces electricity at locations where that change has value to the grid.
For HEDNO, meanwhile, procuring flexibility could create a new option alongside reinforcing cables, transformers and substations.
That creates an entirely new local electricity-market value chain.
HEDNO becomes a buyer of flexibility
A Greek demonstration under the European OPENTUNITY programme is testing a market in which IPTO and HEDNO act as flexibility buyers.
Aggregators combine distributed resources and offer them into a system where national and local network requirements can be coordinated.
Those resources can include commercial and residential demand, water heaters, air-conditioning systems, distributed generation and other controllable electricity assets.
The key commercial change is the emergence of the DSO as a potential customer.
A distribution operator normally solves network constraints primarily through infrastructure investment and operational measures.
A flexibility market gives it another option: pay customers to temporarily change electricity behaviour when and where the network is constrained.
If a transformer is overloaded only during a limited number of hours each year, purchasing demand reduction during those hours could potentially be cheaper than immediately replacing the transformer.
Flexibility would not eliminate conventional grid investment, particularly where constraints are structural.
But it could defer some expenditure, improve utilisation of existing assets and allow network companies to target capital more efficiently.
For market participants, that means network congestion itself can become a source of revenue.
Location creates a new electricity price
The important distinction is that local flexibility is not worth the same amount everywhere.
Reducing one megawatt of demand in an unconstrained area may provide little value to HEDNO.
Reducing the same megawatt behind an overloaded transformer could be substantially more useful.
That creates a market for locational flexibility.
A factory, supermarket, hotel, office building or EV-charging depot could therefore have a commercially valuable asset simply because it is capable of changing demand at the right network location.
This is different from conventional wholesale electricity trading.
The product is not merely electricity.
It is a verified change in electricity consumption or production at a specified place and time.
If Greece commercialises that model, electricity customers could begin receiving payments based partly on where they are connected to the grid.
Aggregators gain another revenue pool
The model could significantly expand the business case for aggregators.
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 could therefore be optimised across several potential markets.
At one moment, an industrial load might be most valuable to IPTO for national balancing.
At another, the same asset might earn more by helping HEDNO relieve a local network constraint.
The aggregator’s job becomes deciding where each megawatt of flexibility has the highest value.
That makes portfolio optimisation increasingly important.
The commercial advantage could be particularly significant for distributed assets whose economics are difficult to justify from electricity-price optimisation alone.
Local network payments could provide an additional revenue stream without requiring the asset owner to become an electricity trader.
EV fleets and commercial buildings become market participants
Consider an EV fleet.
Its primary business is transport, not electricity.
But if dozens or hundreds of vehicles remain connected for several hours, charging can often be shifted within operational limits.
An aggregator could use that flexibility to reduce charging during a local network constraint and increase consumption later.
The fleet operator could receive a flexibility payment while still ensuring every vehicle is sufficiently charged when required.
The same principle applies to commercial buildings.
Air-conditioning, heating, refrigeration or ventilation systems may be capable of temporarily modifying electricity consumption without materially affecting occupants or operations.
Industrial consumers could participate through pumps, compressors, thermal processes or other flexible loads.
Local flexibility therefore creates a mechanism for turning operational flexibility into a new source of income.
Grid investment becomes a buy-versus-build decision
The biggest commercial impact may ultimately sit with distribution companies.
Traditionally, network planning is heavily capital-intensive.
When demand increases or distributed generation creates congestion, operators frequently need new transformers, substations, cables or other equipment.
Local flexibility introduces a buy-versus-build decision.
Should the DSO invest immediately in additional physical capacity, or procure flexibility during the relatively small number of hours when the constraint occurs?
In some areas, infrastructure will clearly remain the better solution.
In others, flexibility could defer reinforcement for several years.
That turns flexibility into something with a measurable economic benchmark: the avoided or deferred cost of conventional grid investment.
It also creates the possibility of longer-term flexibility contracts rather than purely short-term electricity-market transactions.
A DSO that knows a particular network area will face constraints for several years could potentially procure guaranteed flexibility from local resources.
That would give aggregators and asset owners more predictable revenues and make investment in automation easier to finance.
HEDGE-IoT creates the data business around the market
Greece is also examining related concepts through HEDGE-IoT, involving IPTO, HEDNO, PPC and HENEX.
The programme combines flexibility procurement with the exchange of operational data among market participants.
That data layer creates another commercial market.
A local flexibility system needs to know where participating assets are located, how much flexibility they can provide, when they are available and whether an activation actually solved the relevant network problem.
That creates demand for meter-data platforms, grid analytics, forecasting software, automated dispatch, flexibility verification and settlement systems.
The infrastructure behind the market may therefore become as commercially important as the flexibility itself.
A successful local market requires software capable of connecting thousands of customer assets with network operators in close to real time.
One asset can serve several buyers
The Greek model also tests a fundamental issue for the emerging flexibility economy: the same asset can have several potential customers.
IPTO may want an industrial load to reduce consumption for national balancing.
HEDNO may simultaneously need that asset to behave differently because of local congestion.
A supplier or aggregator may have another commercial incentive altogether.
The market therefore needs rules governing priority, availability and settlement.
That challenge creates opportunities as well as complexity.
Companies able to coordinate assets across several markets could capture more revenue from the same physical infrastructure.
An EV charger, heat pump or industrial process could potentially generate value from electricity-price optimisation, balancing services and local network flexibility at different times.
The objective is revenue stacking without double selling the same capacity.
Greece could create a new energy-services market
If the pilots move into commercial procurement, the consequences would extend beyond the electricity sector’s traditional players.
Aggregators would gain a new market.
Industrial companies could monetise flexible operations.
EV charging companies could add grid services to charging revenues.
Building-management companies could turn HVAC systems into dispatchable assets.
Energy-software providers could sell optimisation and settlement platforms.
HEDNO could gain an alternative to some network reinforcement.
And electricity customers could begin earning revenue from assets they already own.
That is what makes the Greek experiments commercially more significant than another smart-grid pilot.
They are testing whether local network capacity itself can become a market.
If that transition occurs, Greece would move from a power system in which congestion is largely solved through engineering investment to one in which part of the solution can be purchased competitively from customers already connected to the grid.
The commercial question would then no longer be simply how much electricity an asset can produce or consume.
It would be how much its behaviour is worth to the grid at a particular location and moment.
