In this paper, we present a cloud based virtual Smart Grid (vSG) architecture and its concept design. This novel architecture extends the pervasive virtualization principle to the wide area smart grid sensory, communication, and control systems, and essentially embeds the Smart Grid (SG) into a cloud environment. We particularly design a systematic virtualization mechanism for SG system in three levels: sensors (PMU), substation, and inter-substation. The resulted unified virtualization allows us to extend our existing work in cloud computing to design a vSG control framework. The goal is to provision on-demand virtual real-time systems to support various smart grid applications with guaranteed Quality of Service (QoS) while achieving economies of scale by decoupling the logical systems from the physical infrastructure. Future research will present typical transmission level applications using Synchrophasors that this vSG framework can encompass.