A smart grid introduces novel concepts on energy efficiency and conservation with the benefit of smart meters. Smart grids have gained worldwide recognition in the past few years. The interpretation of “smart” reflects a noticeable change in the way energy is generated, distributed, delivered, and consumed. Integrating advanced electrical and communications infrastructures incorporated with modern process automation techniques, a smart grid system is constructed in such a way that two-way communication between electricity suppliers and residential electricity consumers is efficiently implemented. An illustration of a smart grid system is given in Fig. 5.1. With these powerful characteristics brought about by modern electrical technologies, a smart grid significantly alters the way utility companies, governments, customers, and business participants view electricity transmission and its associated services.