Energy Grid also known as grid energy storage is the set of methods used to store electricity on a large scale and distribute it to power companies.

The above image gives an idea of how the system works. The system is made of a power station where the electricity is produced and stored, power transformers that step down the voltage so that it will be able to travel through the electric cables. Depending on where the power is going to be used (commercial & industrial or residential consumers), the distributor might need the step down the voltage even more because too much voltage can cause a defect of devices or death.

One of the downside of conventional Energy Grid is that the distributors has to assume what the consumer consumption will be for the next day by analyzing previous data making it the method unreliable if the number of customer is by millions. One way to solve this problem is by making Smart Grid which basic idea is to set up a two way system between the distributor and the customer letting the distributor know exactly when the customer energy need are increasing and also increase the output.

Smart Grid have many more advantage. Some of them are listed in the video bellow:

Sources:

http://www.altenergymag.com/emagazine.php?issue_number=09.04.01&article=smartgrid

http://www.bloomberg.com/bw/articles/2013-08-22/homegrown-green-energy-is-making-power-utilities-irrelevant

https://www.smartgrid.gov/the_smart_grid/smart_grid