Unlocking intraday markets: Revenue potential for HEMS providers

One of the three pillars of an advanced HEMS is affordability, and a key aspect of this is leveraging market signals to optimize consumption. At gridX, we initially started leveraging the market signals of the day-ahead market because these signals are stable and show the highest and lowest prices 24-hours in advance. Think of it like planning your commute: you check traffic forecasts the night before, decide when to leave to avoid congestion, and stick to that plan unless something unexpected happens. This is what our Tariff Timer module does – it analyzes day-ahead prices and schedules asset behavior accordingly, ensuring cost-effective energy usage without directly engaging in market trading. This approach, known as implicit flexibility, helps homeowners maximize savings without the complexity of active market participation.  

But what if you could not only optimize the time you spend on your commute, but also re-route when a sudden traffic jam occurs and make money in the process? Then you would be participating in the intraday market. With this market, if a sudden traffic jam (price spike) appears, you can dynamically adjust your route (shift energy consumption) to avoid delays (high costs). To do this, we aggregate flexible assets into a pool and, through a partner, actively trade in the intraday market. When we sell energy, the pooled assets act like a virtual power plant (VPP); when we buy, they function as a massive battery. This explicit flexibility allows direct market participation, ensuring the most efficient and cost-effective energy use in real time.

What are intraday trading markets?

An intraday trading market is an energy market on which electricity can be bought and sold continuously for delivery on the same day. Unlike the day-ahead market, which, as the name implies, sells energy the day before it’s used, the intraday market facilitates near-real-time transactions, allowing participants to buy and sell power closer to the actual time of consumption – typically 5 minutes before delivery. Market participants can choose between 1-hr or 30- or 15-minute products.

Because this market operates at a much faster pace than day-ahead, it requires careful consideration of numerous additional factors, such as real-time fluctuations in demand and supply. Intraday plays a critical role in balancing fluctuations in renewable energy production, providing a dynamic alternative to the more rigid day-ahead market. 

For a more detailed look, please see our intraday market glossary article.

How does the intraday market provide value?

For HEMS providers, the real financial advantage of the intraday market lies in its ability to capitalize on real-time fluctuations in electricity prices. While day-ahead markets offer stability and predictability, they also limit opportunities to respond to sudden shifts in supply and demand. Intraday trading, on the other hand, enables end consumers with HEMS systems to optimize their costs and benefit from price fluctuations that happen throughout the day. Price fluctuations in the intraday market, also known as price spreads (difference between daily maximum and minimum prices), present high volatility and potential for trading.

Renewable energy generation is inherently volatile and a weather forecast is exactly that – a forecast/prediction, not a guarantee. If a HEMS strategy is locked into day-ahead pricing, it cannot react to sudden, unpredicted changes. But with intraday trading, providers can optimize asset behavior in real time, leveraging excess supply to reduce costs or sell energy at peak prices.  

Using the traffic analogy, it's like sticking to a pre-planned route during rush hour versus having a GPS that reroutes based on real-time conditions. If congestion clears up or a faster route becomes available, intraday trading allows HEMS providers to take advantage instantly – ensuring optimal asset deployment and energy cost efficiency.

Intraday markets offer a significant opportunity to unlock value – not just for end customers through cost savings, but also for businesses leveraging decentralized assets. By tapping into this potential, gridX is taking the first steps toward enabling our partners to monetize flexibility at scale, making energy systems smarter, more dynamic and future-ready. " – Irene Guerra Gil, Energy Market Expert

Beyond cost savings, intraday market participation opens up additional revenue streams. By pooling and actively trading flexible assets, HEMS providers can monetize energy flexibility, whether by selling excess power when prices spike or adjusting loads to buy energy at the lowest rates. This market also provides the most accurate prices as participants are trading energy as close to real-time production and consumption as possible. In a market where prices shift by the minute, those with the ability to react in real time hold a distinct competitive edge.

Intraday market in Germany

In Germany, intraday trading is particularly relevant as the country pushes forward with its renewable energy targets: 80% of the electricity supply coming from renewable energy by 2030; 100% of it by 2035. The European Union has also advanced its climate goals, raising its 2030 renewable energy target from 32% to 45% (with a minimum target of 42.5%). To meet these lofty goals, the intraday market is gaining traction across all of Europe, with countries like the Netherlands and the UK increasingly leveraging them to integrate renewables more effectively. 

An analysis of Germany’s 2023 electricity markets revealed a stark contrast in cost-saving potential between the day-ahead and intraday markets. While day-ahead trading yielded an average price spread of €97.88, intraday trading delivered significantly higher returns, averaging €906.73. On certain days, the price spread exceeded €5,000, with a peak of €10,000 – whereas day-ahead rarely surpassed triple digits. This highlights the substantial financial advantage of real-time market participation.

The intraday market and flexibility

The true power of the intraday market lies not just in its price fluctuations, but in the ability to act on them efficiently. This is where the flexibility value chain comes into play – connecting HEMS providers to the broader energy ecosystem and ensuring they maximize financial benefits without managing market complexities themselves.

At gridX, we bridge the gap between small-scale energy assets and real-time market opportunities through aggregation and disaggregation. Working with all players in the energy value chain, we aggregate flexible assets – such as residential batteries, EV chargers and heat pumps – into a unified pool, creating a controllable and responsive energy resource. Our HEMS software continuously optimizes this flexibility, adjusting asset behavior in real time based on market conditions, grid stability needs and cost efficiency.

The final link in the chain is our partnership with a trading partner, an expert in algorithmic energy trading. While we identify and unlock flexibility within the system, the trading partner executes trades on the intraday market – buying energy when prices are low and selling when prices are high. Through disaggregation, the benefits of these trades are then distributed back to individual assets, ensuring optimal economic outcomes for HEMS providers.

By using a smart EMS, such as XENON, HEMS providers seamlessly access this fully integrated value chain. They don’t need to navigate market fluctuations, manage asset coordination, or develop trading strategies – our platform handles the complexity, allowing them to unlock the full financial potential of the intraday market.

Intraday in action: EV charging and battery arbitrage

By acting as both an aggregator and a disaggregator, a HEMS transforms end users into active market participants, unlocking cost savings and new revenue streams.

From a system-level perspective, individual households often lack the scale to meet the minimum volume thresholds required for market participation (e.g., 0.1 MW per bid). However, by pooling multiple households, a HEMS provider can consolidate flexible loads, making it possible to engage in the intraday market. This pooled approach also smooths out load fluctuations, making forecasting more accurate and reducing exposure to imbalance costs.

At the pool level, these aggregated energy assets become a powerful tool for market participation. Not only does this improve trading efficiency, but it also helps utilities and aggregators lower procurement costs, minimize imbalance penalties and relieve grid constraints. Ultimately, this dual role enables HEMS providers to pass on savings to customers while creating new business opportunities.

To illustrate this, there are two primary use cases that utilize the potential of intraday markets via residential flexibilities: smart EV charging and arbitrage with batteries. 

EV charging

In Germany, one of the biggest opportunities for leveraging intraday market trading lies with electric vehicles (EVs). EVs are typically plugged into residential wallboxes for extended periods (e.g., overnight), yet they often require only a few hours to fully charge (with an average EV battery capacity of 40 kWh and a common charging station power of 11 kW). This creates significant potential for load shifting.

Consider a HEMS provider with a pool of 1,000 EVs. The individual preferences of EV owners vary – each vehicle has a different battery size, plug-in period, energy requirement and wallbox power. To activate the flexibility offered by this diverse fleet, gridX takes on the role of an aggregator, interfacing with an external trading entity. By providing real-time forecasts and nowcasts of available flexibility, gridX derives a feasible charging strategy that aligns with each EV’s energy request and departure time. This aggregated flexibility can then be traded on the intraday market, allowing electricity to be procured at optimal prices, ensuring EVs charge when rates are lowest. gridX’s role is to simplify this process by offering a seamless and reliable interface for managing the flexibility potential of the EV pool.

Once the optimal activation power for the pooled EVs is determined by the trader, gridX executes the disaggregation step – translating the pool-level power target into setpoints for individual EVs. This logic considers local constraints and user preferences. For instance, EVs with earlier departure times may receive a higher share of the available charging power, while always ensuring compliance with grid security requirements, such as Paragraph 14a of the EnWG and fuse protection. The goal is to implement a disaggregation process that is fair, technically robust, and maximizes user comfort.

Unlike optimizing based on day-ahead prices, participating in the intraday market requires pooling EVs to interact with a virtual power plant (VPP). Customers should be aware that they are part of this aggregated system, even though their homes do not need to be physically close to one another. A pooled flexibility potential of approximately 100 kW – equivalent to roughly 10–20 EV batteries or charging points – enables meaningful participation in the market, unlocking financial benefits for both users and service providers.

Battery arbitrage

Beyond EVs, a network of small-scale residential batteries presents another major opportunity for leveraging the intraday market. By applying the same aggregation principles, these batteries can be pooled together virtually to function as a single, large-scale energy storage system. Just like a grid-scale battery, this virtual battery can directly participate in the intraday market – charging when electricity prices are low and discharging when prices are high.

Key differences exist between residential battery pools and grid-scale storage systems. Unlike large, centralized batteries that respond solely to market signals, residential batteries often follow a baseline operation dictated by self-sufficiency optimization – such as storing excess solar energy for later use. To accommodate this, gridX’s aggregation service identifies and communicates only the residual flexibility of each battery. For example, if a battery has a baseline charging power of 7 kW (e.g., due to PV surplus) and a maximum charging power of 10 kW, it can offer 3 kW of upward flexibility.

Additionally, each battery owner may operate under a different tariff structure and grid fee model, which must be factored into both the aggregation and disaggregation processes. gridX’s virtual battery solution accounts for these variations, ensuring that the external trading entity can interact with the aggregated flexibility as if it were a single, grid-scale battery. By seamlessly integrating this complexity, gridX enables efficient market participation while maximizing financial benefits for battery owners.

Current challenges and future potential

While intraday markets offer significant revenue opportunities, several barriers currently limit their full potential in Germany. For starters, the country’s infamously slow smart meter rollout: A lack of widespread smart meter infrastructure prevents real-time visibility into household energy consumption and flexibility potential, making it harder to react to market signals efficiently. 

Despite these challenges, the potential for intraday markets continues to grow. In the near future, additional use cases will emerge, unlocking even greater value:

• Vehicle-to-Grid (V2G): Enabling EVs to act as mobile energy storage, feeding power back into the grid when demand is high and charging when prices are low.
• Heat pump optimization: Aligning heat pump operation with intraday market signals to enhance efficiency and reduce energy costs.
• Expansion beyond Germany: Other European intraday markets, including those in the Netherlands, France, and the UK, present additional opportunities for monetizing flexibility.

Beyond just trading, flexibility use cases will expand into constraint management and balancing services, allowing HEMS providers to not only participate in markets but also support grid stability and the broader energy transition.

gridX: Navigating the fast lane of the energy market

Like commuter traffic, energy is a complex traffic system where supply, demand and regulations dictate the flow. gridX’s platform is designed to help HEMS providers navigate this dynamic landscape, ensuring they can seamlessly integrate new revenue streams as they emerge. By stacking multiple value streams – such as intraday trading, grid balancing, and constraint management – HEMS providers can optimize their flexibility monetization while actively contributing to a more resilient and sustainable energy system.

Intraday markets present a major opportunity for HEMS providers to enhance profitability while supporting the clean energy transition. By effectively managing and optimizing DER flexibility, these markets allow energy assets to move dynamically – just like vehicles adjusting their routes in real time to avoid congestion and reach their destinations more efficiently. However, successfully participating in these fast-moving markets requires advanced technology, intelligent forecasting, and a deep understanding of market mechanisms.

As a leading technical aggregator and optimizer, gridX equips its partners with the tools and expertise needed to unlock the full potential of intraday trading. By simplifying the complexities of real-time energy trading, gridX ensures that HEMS providers stay competitive in an increasingly dynamic market.

Looking ahead, the road to flexibility monetization will continue to evolve. Those who embrace these opportunities today will be best positioned to maximize revenue, drive efficiency and play a crucial role in shaping the future of decentralized energy.