Fog computing extends cloud computing by providing security and data processing capabilities at the edge of the network, close to end users and devices. It aims to address issues like high latency and bandwidth usage that can occur when all data processing is done in the cloud. Fog computing deploys computing, storage, and applications between end devices and cloud data centers so that data can be processed locally when needed. This helps enable real-time applications like smart energy grids that require low latency responses by running applications on edge devices instead of sending all data to the cloud.