IntroductionSmart gridsimplement the latest control and telecommunication technology to fulfill therequirements and capabilities of all the network stakeholders (powergeneration, transmission, distribution and end-users) to operate the networkefficiently which means less cost, less environmental impact with maximumstability, reliability and availability. The smart grid is smart because itallows two-way of communication (using smart meters and sensor) and two-way of energyflow (using energy storage and distributed generation), whereas the traditionalnetwork has only one way on information and energy flow which is from thecentralized power generation to the transmission then end user. In addition, smartgrids can accommodate and integrate new type of energy sources (renewableenergy) and a new type of energy customer services (electrical vehicle), which requirecommunication, dynamic control daily analysis. Moreover, the smart grid allowsthe end user to adjust their consumption to obtain the best electricity price. Figure 1.1 Smart grid overview Smart Grid DefinitionThe definitionof smart grid varies across the countries and the energy institutions.

In theUS the smart grid is considered as the mean of renewable energy sources integration,energy storage deployment, load management, system transparency, and cyber andphysical security of the electric energy system. Whereas in Europe the SmartGrid is defined as an electricity network that can intelligently integrate theactions of all users connected to it (generators, consumers and those that doboth) to efficiently deliver sustainable, economic and secure electricitysupplies. In other definition he US Department of Energy focus on the usesdigital technology to improve reliability, security, and efficiency (botheconomic and energy) of the electric system from large generation, through thedelivery systems to electricity consumers and a growing number ofdistributed-generation and storage resources.Characteristics of theSmart Grid·        Enablesthe active participation by consumer where they can detriment to increase/decreasetheir consumption base on the dynamic pricing system. ·        Thesmart grid can accommodate different generation and storage such as the renewableenergy. ·        Accommodatenew products, service and market (green power, electric vehicle and dynamic pricing).

·        Providepower quality and reliability to the digital economy.·        Optimizes asset utilizationand operates efficiently·        Anticipates and responds tosystem disturbances (self-heals) ·        Operates resiliently againstattack and natural disaster.Smart Grid MotivationThe motivationof the smart grids development is mainly to overcome the challenges related tothe electrical networks such as the old infrastructure, demand growth,integration of new energy sources and loads with new features and requirement.In addition, the to the existing challenges the motive for smart includesimproving the quality of the power supply and reduce the carbon emission drivenby the increase global awareness about the global warming and the rapiddevelopment in the communication and technology. ·        Economic andenvironmentalThe concerns about the CO2 emission,the price of the fossil fuel and the safety concerns around the nuclear plantsspecially after Fukushima accident motivates the trends to obtain the energyfrom renewable sources such as the wind and solar energy, reduces the networklosses and increase its efficiency.

·        Aging andunderinvested infrastructureMost of theelectrical networks in the US and Europe were constructed in the 1950s, and nowthey are beyond the expected lifetime. So, most of the infrastructure shall bereplaces which considered an opportunity to upgrade it with the latesttechnology related to the smart grid requirement.  ·        Newgeneration methods and new load requirementThe existingelectric networks operate with large centralized generation (fossil fuel,nuclear or hydropower) which is distributed in one direction throughtransmission and distribution grid to the load. However, the new methods are tohave distributed generation (wind, solar or storage) which has some fluctuationand need smart network and technology to control it and integrate it to thenetwork. In the other side of the network lies the modern society withincreased requirement of reliable and stable source of supply as more critical loadsare introduced such as smart homes, smart building, data centers and electricalvehicle.

·        InformationCommunication technologyThe rapiddevelopment the information technology and communication are one of the essentialfactors to implement the smart grid. With the internet, sensors and controllersit become easy to monitor, control and adapt the network to the dynamic of thesmart networks. Figure 2.1 shows how the communication and flow of informationis important to the smart network. Figure 1.2 Smart grid and communication Benefits of Smart Grid·        Powerreliability and power quality: using the communication and control technologythe smart grid will less, and shorter power outage and it will have theself-healing ability.

·        Safetyand cyber security: by self-mentoring and detection of any unsafe activity.·        Energyefficiency: by reducing the peak demand and the network losses.·        Environmental:by reducing the greenhouse gases with the integration of the renewable energysource.·        Directfinancial: by reducing the operation cost, dynamic pricing and reducing therequired infrastructure.

 Smart Grid TechnologiesThe smart grid technologycontributes to the efficiency and flexibility of an electricity system’soperation. It includes a varied range of communication, control technologies andinformation management and can be classified into four functional categories.  AdvancedMetering InfrastructureThis includes the smart meters, sensors and thecommunication required to transfer this data to the network operators such as pricesignals, connect/disconnect signals and Demand Response information. The smartmeters have more features comparing the traditional meters. Smart meters have higherresolution, more frequent update (close to real-time) and ability tocommunicate in both way using different media like Internet, radio, Wi-Fi, BPL,cell modem, or satellite. Advanced Metering Infrastructure facilitate the integrationof the renewable energy by providing the measurement, communication, pricing schemeand demand response gateway. Morver it reduces the cost of the workers readingsthe traditional meter as the advance meter has the automatic meter reading function.AdvancedElectricity PricingIn the traditional network the power will be dispatched fromthe least expensive source (baseload plants), as the load increase the secondleast expensive source and then the most expensive source will dispatch thepower with no storage availability.

Therefore, the price of electricity is moreexpensive during the peak hours and the tariff will apply for every kWh regardlessthe source of dispatch which is not very economical solution and does notreflect actual cost of production. Advanced electricity pricing provides several methods andpricing programmes to deliver the power with more accurate price which reflectreal-time production costs. In this manner customers can shift their consumptionto the time with less production price. Three mothods are suggested for theadvance electricity pricing   Time-of-Use PricingThis method will define the peak time for certain area andincrease the price during this time, which will encourage the users to shift theirconsumption manually or using Home/Building energy management system, to avoidthe peak time to profit from the less expensive tariff. Critical Peak PricingIn this method a signal will be send from the utilities tothe consumers when the load approaches the annual peak, the consumers whoreacts and reduces the load will be compensated. Real-Time PricingThis method is also known as the dynamic precising where theprice is updated and the signal is sent to the consumers on real time onintervals, where the intervals can be hours to days.

This is quite complex methodwhich will result on very economical consumption specially with the penetrationof the renewable energy (solar and wind) and the implementation of Home/Buildingenergy management system.