Prior to 1990, most Danish electric power was produced at large, centralized generation plants from which it was transmitted and distributed to commercial, industrial, and residential consumers. Since then, thousands of distributed generators have been added such that the installed generation capacity at the distribution level exceeds the generation capacity at the transmission level. The distributed generation (DG) assets include dispersed combined heat and power (CHP) plants and wind turbines, creating a “carpet” of generation at the low and medium voltage levels of the distribution system (see inset). These distributed resources provide renewable and flexible energy production and support local thermal heating loads but were designed to operate only while grid-connected and could not be used in the case of a major power outage. The high penetration of variable wind generation also created the situation where the transmission system had to balance all the local variability of wind (both real and reactive power).