Recent reforms in Great Britain, led by the National Energy System Operator (NESO), mark a significant step in the evolution of electricity markets. Through updated metering rules, households and businesses can now participate more directly in balancing the electricity system through assets such as electric vehicle (EV) charges, heat pumps, and batteries. This is a fundamental shift in how electricity systems are operated – one that is highly relevant for Ireland as it navigates its own transition to a low-carbon, electrified energy system.
Set against the backdrop of the International Energy Agency’s Powering Ireland’s Energy Future report, the reform offers a clear illustration of market evolution that is needed to reach ambitious decarbonisation targets and ensure energy independence and security.
From Passive Demand to Active System Resource
Traditionally, participation in real-time balancing markets has been limited to large generators, which are asked to switch on or off on a short to real-time basis. The NESO reform, developed with industry participants, enables smaller, distributed assets to participate via aggregation. In practical terms, this means that thousands of households – through smart devices – can collectively act as a “virtual power plant”, responding dynamically to system needs.
Operationally this means that if generation is high, an aggregator or supplier might automatically charge EVs or batteries faster with clean surplus energy or temporarily increase heat pump temperature to prewarm a home according to the needs of the consumer. Conversely, if national demand is high, consumers might agree to have EV charging automatically shifted or reduced within parameters that work for them or have their battery export a small amount of energy. Consumers would in return benefit through supplier offers such as lower tariffs.[1]
This is meaningful progression from earlier demand response schemes, such as GB’s Demand Flexibility Service, which operated on a more limited and event-based basis. The reform instead integrates demand-side resources into the core balancing architecture of the system, allowing them to contribute on a near real-time basis.
Why This Matters for Ireland
The IEA’s assessment of Ireland’s energy system highlights that flexibility will be central to maintaining security of supply as demand rises and renewable penetration increases. Electricity demand is expected to grow significantly while variability from wind and solar generation will place greater demands on system balancing.
The report estimates that demand-side flexibility will need to increase substantially, with government targets set to as much as 20–30% by 2030 (from 5% in 2024). This reflects not only the scale of the challenge, but also the opportunity: electrification of heat and transport introduces new flexible loads that, if properly integrated, can support rather than strain the system.
The NESO reform demonstrates how this integration can be achieved in practice. By removing regulatory barriers and enabling market access, distributed technologies are transformed into system assets. For Ireland, this is directly aligned with the IEA’s recommendation to accelerate the development of demand-side flexibility and ensure that consumers can actively participate in energy markets.
Bridging the Gap: What Ireland Needs to Do
While Ireland has made important progress—particularly in supply-side flexibility through DS3 and evolving system services frameworks—the development of demand-side participation remains comparatively limited. The IEA report provides a clear roadmap for how this gap can be addressed.
A central priority is the expansion of smart metering and digital infrastructure, which underpins real-time visibility and control of demand. Without this, the ability of households and businesses to respond dynamically to system signals is inherently constrained. Ireland’s National Smart Metering Programme (NSMP) started rolling out smart meters in 2019 and to date over 2 million have been installed in homes and businesses[2]. While this is significant progress to date, further expansion of the programme is needed to take full advantage of demand flexibility.
Equally important is the need to enable broader participation through aggregators. As in Great Britain, individual households are unlikely to interact directly with system operators; instead, aggregation platforms must be able to pool demand and participate in markets on behalf of consumers. This requires not only technical enablement, but also regulatory clarity and market access.
Retail pricing also plays a critical role. The IEA emphasises the importance of dynamic and time-of-use tariffs, supported by appropriate network charging structures, to ensure that consumers receive clear and actionable price signals. ToU tariffs are already widely available to consumers in Ireland and dynamic tariffs are set to launch in June 2026[3] – a major milestone in promoting energy efficiency and renewable usage. While significant steps have been taken by suppliers to promote the uptake of smart meters, further work is needed in raising awareness and encouraging customers to take advantage of smart tariffs.
A Structural Shift
The NESO metering reform is best understood as a structural change in electricity market design. It shifts demand from a passive input into an active, dispatchable resource, integrated into the real-time operation of the system.
For Ireland, the implications are clear. Meeting the challenges identified by the IEA will require not only investment in generation and networks, but also a deliberate effort to unlock flexibility from the demand side. This means addressing regulatory barriers, strengthening market signals, and enabling new participants to enter the market.
As electrification accelerates, the question is no longer whether demand can be flexible, but whether market frameworks allow it to be. The experience in Great Britain provides a compelling example of how targeted reforms can unlock that potential—and, in doing so, support a more secure, affordable, and sustainable electricity system.
[1] Millions of households and businesses free to reap rewards from flexing energy use | National Energy System Operator
[2] About: National Smart Metering Programme
[3] Dynamic Electricity Tariffs | Dynamic Pricing Ireland | Smart Plans