Greece is testing a new electricity-market model that could create additional revenue 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 provide flexibility to both transmission and distribution networks without creating conflicting dispatch instructions.
The commercial opportunity is significant. Industrial consumers, EV charging operators and commercial buildings traditionally treat electricity mainly as a cost. Under a functioning local flexibility market, the same customers could be paid for changing when they consume or produce electricity where that flexibility has value to the grid.
For HEDNO, flexibility could provide an additional option alongside investments in cables, transformers and substations. This creates a new local electricity-market value chain built around flexible demand and distributed assets.
HEDNO becomes a buyer of flexibility
A Greek demonstration under the European OPENTUNITY programme is testing a model in which IPTO and HEDNO act as buyers of flexibility.
Aggregators combine distributed resources and offer them into a system where national and local network requirements can be coordinated. These resources can include commercial and residential demand, water heaters, air conditioning, distributed generation and other controllable assets.
The key change is that the distribution operator becomes a potential customer for flexibility services.
Instead of relying only on infrastructure investment to address network constraints, a DSO could pay customers to temporarily change electricity consumption where and when the network requires it.
For example, if a transformer is overloaded for only a limited number of hours each year, purchasing demand reduction during those periods could potentially be more economical than immediately replacing the transformer.
Flexibility will not eliminate the need for conventional grid investment, especially where constraints are permanent. However, it could defer some investments and improve the utilisation of existing infrastructure.
Location creates a new electricity value
Local flexibility has different values depending on where an asset is connected to the grid.
Reducing one megawatt of demand in an unconstrained area may provide limited value to HEDNO. The same reduction behind an overloaded transformer could be considerably more valuable.
This creates a market for locational flexibility.
Factories, supermarkets, hotels, office buildings and EV charging depots could therefore possess commercially valuable flexibility simply because they are connected at a useful network location.
The product is no longer only electricity. It is a verified change in electricity consumption or production at a specific place and time.
If Greece develops this model commercially, customers could increasingly receive payments based partly on the location and timing of their electricity use.
Aggregators gain another revenue stream
The model could significantly expand the business case for aggregators.
An aggregator already active in balancing markets could add local DSO flexibility as another revenue source. A portfolio containing factories, EV chargers, commercial buildings, heat pumps and distributed generation could be optimised across several markets.
At one moment, an industrial load might be valuable to IPTO for system balancing. At another, the same asset could generate greater value by helping HEDNO manage a local network constraint.
The aggregator’s role therefore becomes one of portfolio optimisation, determining where each unit of flexibility can provide the greatest value.
For distributed assets, local network payments could add revenue beyond traditional electricity-price optimisation without requiring asset owners to become electricity traders themselves.
EV fleets and buildings become market participants
EV fleets provide a clear example of how this could work. Their primary purpose is transportation, but vehicles often remain connected to chargers for several hours and may not need continuous charging.
An aggregator could reduce charging during a local network constraint and shift it to a later period while ensuring vehicles are sufficiently charged when needed.
The same principle applies to commercial buildings. Heating, cooling, refrigeration and ventilation systems can sometimes adjust consumption without materially affecting operations or comfort.
Industrial facilities could participate through pumps, compressors, thermal processes and other flexible loads.
Local flexibility therefore creates a way to turn operational flexibility into additional income.
Grid investment becomes a buy-versus-build decision
The biggest impact could come at the distribution level, where network investment is traditionally capital intensive.
When electricity demand rises or distributed generation creates congestion, operators may need additional transformers, substations, cables or other infrastructure.
Flexibility introduces a buy-versus-build decision: should the DSO invest immediately in new capacity, or procure flexibility during the limited periods when a constraint occurs?
In some locations, physical reinforcement will remain necessary. In others, flexibility could defer investment for several years.
This gives flexibility a clearer economic value based on the avoided or deferred cost of network reinforcement.
Longer-term flexibility contracts could also provide more predictable revenues for aggregators and asset owners, supporting investment in automation and control systems.
HEDGE-IoT creates a data layer
Greece is also exploring 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 is essential to a functioning local flexibility market. Operators need to know where assets are located, how much flexibility they can provide, when they are available and whether an activation actually addressed the network constraint.
This creates commercial opportunities for meter-data platforms, grid analytics, forecasting, automated dispatch, flexibility verification and settlement systems.
The software connecting thousands of customer assets with network operators could become as important as the physical flexibility itself.
One asset can serve several markets
The Greek model also highlights one of the central challenges of the flexibility economy: the same asset can potentially have several customers.
IPTO may need an industrial load to reduce consumption for national balancing, while HEDNO may require different behaviour because of a local network constraint. An aggregator or supplier could have another commercial objective.
The market therefore needs clear rules for priority, availability and settlement.
Effective coordination could allow the same EV charger, heat pump or industrial process to generate revenue from electricity-price optimisation, balancing services and local flexibility at different times.
The key is revenue stacking without double-selling the same capacity.
Greece could create a new energy-services market
If the current pilots progress towards commercial procurement, the impact could extend well beyond traditional electricity companies.
Aggregators could gain a new source of revenue, industrial companies could monetise flexible operations, EV charging operators could add grid services, and building-management companies could turn HVAC systems into controllable assets.
Energy-software providers could develop optimisation and settlement platforms, while HEDNO could gain an alternative to some forms of network reinforcement.
For consumers, assets they already own could become sources of additional electricity-market revenue.
That is what makes Greece’s flexibility projects more significant than a conventional smart-grid pilot. They are testing whether local network capacity itself can become a marketable product.
If successful, Greece could move towards a system where some network constraints are addressed not only through engineering investment, but also by competitively procuring flexibility from customers already connected to the grid.
The commercial question would then extend beyond how much electricity an asset can produce or consume. Increasingly, it would be how much its behaviour is worth to the grid at a particular location and moment.
