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This paper presents the overview of smart grid technology to increase the operational as well as technological efficiency of the power distribution network to meet the growing energy demand. Smart grid is sophisticated, digitally enhanced power systems where the use of modern communications and control technologies allows much greater robustness, efficiency and flexibility than today's power systems. A smart grid impacts all the components of a power system especially the distribution level. An ideal alternative on distribution system to customers is the installation of a small sized generator or distributed generation. Distributed generation can improve distribution system stability and reliability. To optimize the operation for energy management, it is necessary to utilize smart grid technology. The benefits from smart grid will achieve through successful implementation for the utilities as well for the consumers, and obviously benefit to the economy.