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Even though Saudi Arabia is the world's largest producer and exporter of petroleum and petroleum based products, it is also blessed with high potential of renewable energy sources like solar and wind. Untapped wind and solar energy sources, which are abundant throughout the Kingdom, can be connected and optimally integrated into the grid through the use of smart grid technologies and the expansion of transmission facilities. Smart grid is an auto-balancing, self monitoring power grid that accepts power from any source of fuel -like oil, sun or wind and delivers electricity from suppliers to consumers. It helps to control appliances, to save energy, reduces cost and increase reliability and transparency at consumers' homes. This paper describes the attributes of a smart grid and how these act as driving force to modernize the electrical power grid. The necessity of conservation of oil in Saudi Arabia is argued. Moreover the vast availability of renewable energy sources like solar and wind in Saudi Arabia and advantages in utilizing these sources through smart grid technologies are advocated in this paper.