Driven by new regulation, new market structures and new energy sources the smart grid is the response to profound changes in the way that electricity is generated, distributed, managed and consumed. What makes the challenge particularly acute, is the essential role that energy production plays in modern
democracies. Keeping the lights on is a political, economic and social imperative. Enabled by current and future developments in technology, smart grids will better enable electricity companies to meet rising demand, increase the reliability and quality of power supplies, improve energy efficiency, and integrate low-carbon energy sources into power networks. This paper looks at the environment in which the smart grid is being developed, based on industry standards and how a newly intelligent, interconnected and inter-operable grid can be seen as a leading example of the Internet of Things in action.