The traditional power grid in many countries suffers from high maintenance cost and scalability issues along with the huge expense of building new power stations, and lack of efficiency system monitoring that could increase the overall performance by preventing potential failure. To address these problems, a new generation electric power system called smart grid has been proposed as an evolutionary system for power generation, transmission, and distribution. It utilizes renewable energy generation, smart meters and modern sensing and communication technology for the effective power system. Traditionally, grid management has been realized through wired system formed by communication cables, which involves the heavy cost in terms of installation and maintenance of flexibility, self-organization, and rapid deployment. A smart grid uses digital technology to improve reliability, security, and efficiency of the electric system.