A smart grid is the latest evolution in the development of the electric grid, in which the current interconnected network of transmission and distribution lines that connects the supplier to the consumer is made smarter by the inclusion of digital technology and communication systems.

Unlike the conventional grid which is a one-way network, a smart grid facilitates two-way communication and information management between the consumer and the utility service provider. For example, a smart meter informs the customer about the electricity consumption at a particular time, thus enabling the customer to fine-tune his energy needs.

The merits driving the adoption of smart grids include the following:

Improves resiliency of the network

Integration of renewable energy systems into the network

Allows for mutual communication between the customer and supplier

Improves the efficiency and reliability of the network

Energy security

It is worthwhile to emphasize that smart grids are especially rewarding when there is a need to incorporate various renewable energy conversion systems like wind, solar PV, geothermal etc. into the energy mix. This is made possible by utilising a variety of distributed energy systems instead of a large centralised plant.

Blackouts and power outages which are common occurrences in many developing countries could be reduced when smart grids are effectively implemented. In addition, during emergencies such as earthquakes or terrorist attacks, the grids are smartened by localising outages to affected areas while diverting useful power for hospitals and other emergency services.