Abstract This paper analyses demand side management (DSM) projects and stakeholders’ experience with the aim to develop, promote and adapt smart grid tehnologies in Latvia. The research aims at identifying possible system service posibilites, including demand response (DR) and determining the appropriate market design for such type of services to be implemented at the Baltic power system level, with the cooperation of distribution system operator (DSO) and transmission system operator (TSO). This paper is prepared as an extract from the global smart grid best practices, smart solutions and business models.