Background and context

Smart grids are energy networks that can automatically monitor energy flows and adjust to changes in energy supply and demand accordingly. When coupled with smart metering systems, smart grids reach consumers and suppliers by providing information on real-time consumption.

As smart grids show information on supply and demand, they are particularly beneficial for the integration of growing amounts of variable renewable energy sources, like solar and wind power, and of new loads, such as energy storage and charging of electric vehicles, while maintaining stability and efficiency of the system. In addition, smart grids open up the possibility for consumers who produce their own energy to respond to prices and sell excess amounts back to the grid.

Smart grids enable new market actors, such as aggregators and energy service companies, to offer new types of services to consumers, allowing them to adjust their consumption and reap the benefits of flexibility provided to the grid.