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. 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.
The work focuses on enabling distributed resources to offer flexibility without creating conflicting dispatch instructions between network levels. Under the model being tested, an industrial consumer, EV charging operator or commercial building would still manage electricity primarily as a cost. In 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.
DSO procurement of flexibility alongside network investment
For HEDNO, procuring flexibility could provide an additional option alongside reinforcing cables, transformers and substations. 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 intended to coordinate national and local network requirements.
The portfolio of resources under consideration includes commercial and residential demand, water heaters, air-conditioning systems, distributed generation and other controllable electricity assets. The key commercial change described in the programme is the emergence of the DSO as a potential customer. A distribution operator typically addresses network constraints through infrastructure investment and operational measures, but a flexibility market adds the option to pay customers to temporarily change electricity behaviour when and where constraints occur.
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 replacing the transformer immediately. Flexibility would not eliminate conventional grid investment, particularly where constraints are structural. It could instead defer some expenditure, improve utilisation of existing assets and allow network companies to target capital more efficiently.
In this setup, network congestion itself can become a source of revenue for market participants. The value of local flexibility is described as location-dependent rather than uniform across areas controlled by the same operator. Reducing one megawatt of demand in an unconstrained area may provide little value to HEDNO compared with reducing demand behind an overloaded transformer.
Locational products and payments for verified changes
The model therefore supports a market for locational flexibility. A factory, supermarket, hotel, office building or EV-charging depot could have commercially valuable capability if it can change demand at the right network location. This differs from conventional wholesale electricity trading because the product is not merely electricity.
The described product is a verified change in electricity consumption or production at a specified place and time. If Greece commercialises that model, electricity customers could receive payments based partly on where they are connected to the grid. That shift would affect how aggregators structure offerings across different network needs.
Aggregator revenue stacking across balancing and local constraints
The approach could expand the business case for aggregators by adding local DSO flexibility as another source of revenue alongside balancing markets. An aggregator already active in balancing services could incorporate local DSO flexibility into its portfolio. A portfolio containing factories, EV chargers, commercial buildings, heat pumps or distributed generation could then be optimised across several potential markets.
At one point in time, an industrial load might be most valuable to IPTO for national balancing; at another point, the same asset might earn more by helping HEDNO relieve a local network constraint. The aggregator’s role becomes selecting where each megawatt of flexibility has the highest value. This increases the importance of portfolio optimisation for aggregators operating across multiple market layers.
The commercial advantage could be particularly significant for distributed assets whose economics are difficult to justify using electricity-price optimisation alone. Local network payments are described as an additional revenue stream that does not require asset owners to become electricity traders. The model also extends participation beyond traditional industrial loads into EV operations and building systems.
EV fleets, building controls and flexible industrial loads
An EV fleet’s primary business is transport rather than electricity supply or trading. 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 while ensuring vehicles are sufficiently charged when required.
The same principle applies to commercial buildings where air-conditioning, heating, refrigeration or ventilation systems may temporarily modify electricity consumption without materially affecting occupants or operations. Industrial consumers can participate through pumps, compressors, thermal processes or other flexible loads. Local flexibility is therefore described as a mechanism for turning operational flexibility into income through participation in constrained-network events.
Buy-versus-build decisions for DSOs and longer-term contracts
The biggest commercial impact is described as likely to fall on distribution companies through their planning choices. Network planning is characterised as capital-intensive, with operators often needing new transformers, substations, cables or other equipment when demand rises 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.
In some areas infrastructure would remain the preferred solution; in others flexibility could defer reinforcement for several years. That framing turns flexibility into an economic benchmark based on avoided or deferred costs of conventional grid investment. It also creates scope for longer-term flexibility contracts rather than relying only on short-term transactions in electricity markets.
A DSO expecting constraints in a particular network area over several years could potentially procure guaranteed flexibility from local resources. That would provide aggregators and asset owners with more predictable revenues and support financing for automation investments. Alongside procurement structures, Greece is also examining data exchange requirements tied to activation performance.
HEDGE-IoT data layer supporting procurement verification
HEDGE-IoT is described as examining related concepts involving IPTO, HEDNO, PPC and HENEX through . The programme combines flexibility procurement with exchange of operational data among market participants. The data layer is described as creating another commercial market linked to system operation needs.
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. 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 commercially important alongside the flexibility product itself.
Rules for multiple buyers of the same asset
A successful local market requires software capable of connecting thousands of customer assets with network operators in close to real time . The Greek model also tests how one asset can have several potential customers simultaneously across different needs. IPTO may want an industrial load to reduce consumption for national balancing while HEDNO may need that load to behave differently due to local congestion.
A supplier or aggregator may have another incentive altogether depending on how markets are structured. To manage this situation, rules are needed governing priority, availability and settlement so that dispatch instructions do not conflict when multiple buyers request services from the same resource . Companies able to coordinate assets across several markets could capture more revenue from the same physical infrastructure without double counting capacity.
Potential expansion beyond traditional electricity players
If pilots move into commercial procurement, participation could extend beyond traditional electricity-sector players described in Greece’s testing framework . Aggregators would gain a new market while industrial companies could monetise flexible operations through participation in local constraints management. EV charging companies could add grid services on top of charging revenues.
Building-management companies could turn HVAC systems into dispatchable assets while energy-software providers could sell optimisation and settlement platforms supporting these services . HEDNO would gain an alternative route alongside some reinforcement measures such as cables, transformers and substations. Electricity customers could begin earning revenue from assets they already own if Greece commercialises the model being tested.
