The spread of intermittent renewable energy sources and distributed generation units make load management an even more delicate aspect of energy system operations. Heat pump technology can provide a major contribution to energy system management once properly integrated in its infrastructure, as foreseen by the Smart Grid vision. This paper tackles the challenge of Smart Grids and gives a clear representation of the role that heat pump technology can play through its applications in the Smart Grids context. A broad description of the evolution process taking place in the current energy sector is the starting point to outline the new role of heat pumps in this paper. This description is followed by an introduction of the vision of the highly integrated and distributed energy system fostered by Smart Grids, showing how the potential of so called "prosumers" can be unlocked. A conceptual model of the system is developed to highlight the role of major stakeholders and their interactions and also to identify the key role of heat pumps in the future energy system. In addition to this, an assessment of the potential impact of heat pump technology in the Smart Grid context has been evaluated considering the economic savings that could be achieved by a demand response strategy.