Energy generation once was a simple matter of having power stations produce electricity that was consumed by households and industry. Rooms were kept warm with gas or oil heating systems and cool with air conditioners. Energy suppliers offset fluctuations in demand by starting up gas-fired power plants or using pumped-storage electrical power stations. As a result, there weren’t really any unwanted fluctuations in electricity production.
But power generation has become more complicated since many countries began to focus on renewable sources of energy. Whereas Germany had several hundred large and medium-sized power plants 20 years ago, it now has almost 2 million energy producers, including roof-mounted solar panels, wind turbines, and biomass facilities. Households, buildings, and industrial facilities are increasingly turning into “prosumers” — consumers who also produce energy.
As a result of these developments, smart grids are becoming necessary to safeguard the transmission and distribution of electricity from a growing number of fluctuating sources. Smart grids help to increase energy efficiency by incorporating prosumers (examples include buildings and, in the future, electric cars) and balancing supply and demand as much as possible.