A smart grid is an electrical grid that can cost-effectively integrate characteristics and activities of all users connected to the network – producers, consumers and those who are both, in order to ensure economically efficient and sustainable system with low energy losses, high quality and reliability of supply.

Until a few years ago, electric power system operated on established production of electricity in large generation units and the transmission and distribution of electricity to final consumers. The planners of the power system are with the integration of dispersed renewable production, electromobility, demands for energy efficiency and more active participation faced with a lot of new challenges. A smart grid is the set of technologies, services, and concepts – from advanced metering, smart meters, demand response, active networks, electro- mobility and electricity storages.

In the future, with its development smart grids will affect the regulatory regime. Therefore, the Energy Agency is continuing its work in accordance with adopted guidelines on active regulation of energy activities and networks of the future, whose aim is to examine appropriate solutions, and after that prompt and timely implementation of them in the regulatory practice in order to improving the regulation. The introduction of the smart grids will enable flexibility (meeting the consumers' needs by responding to their requirements), accessibility (enabling connection to the network for all users), reliability of electricity supply (provision and improvement of security and quality) and cost-efficiency. The concept of smart grids also includes investments in advanced metering infrastructure. Pilot projects and the results of cost-benefit analysis show that the advanced metering infrastructures offer much more than mere measurements and transmission of measurement data and because of lower operational costs the introduction for all users would be a rational decision.