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Electricity market explained - Generation and consumption


Power generation and consumption define supply and demand. By maintaining a balance, a stable grid can be ensured even through power fluctuations.

Electricity generation means the conversion of any energy source into electrical energy. The figures on the SMARD website are the figures for net electricity generation. Net electricity generation, unlike gross electricity generation, does not include the electricity used by the generating installations themselves. Net electricity generation is the amount of electricity that is actually fed into the general supply network. Generation is divided into conventional and renewable generation, depending on the type of energy source used. For more information about different energy sources, developments in renewable energy, and feed-in to the grid, go to Electricity market explained – Electricity generation.

The figures for electricity consumption are the figures for the amount of electrical energy taken directly from the electricity grid. They do not include electrical energy that is taken from pre-charged (rechargeable) batteries or the energy that is generated by, for example, private solar photovoltaic (PV) installations and not fed into the general supply network. The electricity consumption shown on the SMARD website is the net electricity generation plus imports and minus exports and pumping work. For more information about the use of electrical energy, go to Electricity market explained – Electricity consumption.

Electricity generation and consumption must be balanced to maintain a stable system frequency of 50 Hertz (Hz). If too much electricity is fed into the grid, the system frequency will go above 50 Hz. If the system frequency is below 50 Hz, not enough electricity is in the grid and either less electricity needs to be consumed or more electricity needs to be generated. Balancing services provided by the transmission system operators help to restore the balance and maintain a steady system frequency. Generating installations rely on electricity suppliers' forecasts of demand to be able to estimate consumer demand and produce an amount of electricity that is as close as possible to the amount needed. Day-ahead forecasts of generation and consumption may not be the same as actual generation and consumption because it is not possible to accurately predict either the weather or exactly how much consumers will need.

Figures for actual and predicted generation and consumption in nearly real time are shown on the SMARD website.

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