Post: Demand response, from optional to essential | an interview with GridBeyond’s Chief Commercial Officer, Mark Davis

Demand response, from optional to essential | an interview with GridBeyond’s Chief Commercial Officer, Mark Davis

Demand response and flexibility moved from “nice to have” to critical system tools in 2025, driven by rapid load growth, more variable renewables and tighter system margins across all major markets. Here we speak to GridBeyond’s Chief Commercial Officer, Mark Davis on what stood out in 2025 for demand response.

Q: Demand response has been around for a long time. What changed in 2025?

What really shifted in 2025 is that demand response and flexibility stopped being viewed as “nice-to-have” tools and became critical to system reliability. Across all major markets we’re seeing rapid load growth, tighter system margins and much higher levels of variable renewables. In that environment, flexible demand is no longer a backup option – it’s a core system resource.

Q: Let’s start with Great Britain. How would you characterise developments there last year?

A: GB in 2025 was about turning crisis-era measures into permanent market features. The Demand Flexibility Service left a real legacy in terms of how we engage mass-market customers, while industrial and commercial users focused on stacking value across balancing, wholesale and local flexibility markets. At the same time, important market changes progressed. Work on Balancing and Settlement Code modification P415 moved forward, alongside reforms like P444 and Market-wide Half Hourly Settlement (MHHS). Together, these changes will allow independent aggregators to trade flexibility directly into wholesale markets, which is a big step forward.

Q: What does MHHS mean in practice for large energy users?

A: MHHS is transformational. As all metering points move to half-hourly settlement from late 2025 onward, customers get much stronger price signals and far better visibility of when flexibility is valuable. That creates real opportunities for automated optimisation, but it also adds complexity. Managing that complexity is where platforms like ours come in.

Q: Ireland has set some ambitious flexibility targets. How did 2025 move things forward?

A: Ireland is now very clearly linking flexibility to its net zero strategy. ESB Networks’ Flexibility Multi-Year Plan for 2025-29 positioned demand response as central to managing electrification and distributed renewables, particularly at distribution level. There’s also growing momentum around enabling dispatchable demand through code changes, expanding DS3 participation and rolling out DSO-led flexibility markets. For industrial and commercial customers, that means multiple overlapping value streams, but also the need for smart coordination.

Q: Japan feels like a very different market. What stood out there in 2025?

A: Japan’s story is really about load growth and tightening capacity. National forecasts now show steady demand growth through to the 2030s, with data centres and semiconductor plants adding significant peak demand. Capacity market prices rose, reflecting tighter conditions, and the Seventh Basic Energy Plan put a stronger emphasis on managing price volatility and supply-demand balance. All of that reinforces the value of demand response and aggregation.

From our perspective, one of the most exciting developments was the scaling of advanced ancillary services. Completing Japan’s first Frequency Containment Reserve operation with partners showed that AI-optimised flexibility can deliver the precision Japanese markets require.

Q: How is demand response evolving in Australia’s NEM?

A: The NEM continues to be shaped by extreme volatility, both in prices and system conditions. In 2025, demand-side resources played a bigger role in managing Frequency Control Ancillary Services (FCAS) price spikes, congestion and constraint events. What we’re seeing is a move away from static programmes toward dynamic, automated strategies. Businesses are increasingly optimising flexible load and storage in real time, responding to energy and FCAS signals while protecting operational constraints.

Q: When you look across all these regions, what’s the common thread?

A: Despite different market designs, we’re seeing convergence around a few key themes: more granular data and settlement, stronger capacity and balancing signals, and a much bigger role for aggregators and AI-enabled platforms. Flexibility is becoming a strategic asset. For system operators, it’s essential for reliability. For large energy users, it’s a way to manage risk, reduce costs and unlock new revenue. The challenge now isn’t whether flexibility matters, it’s how to capture its full value efficiently.

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