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Smart grid is a relatively new term that refers to the application of information technology to power systems. Due to the complexity of such systems,the possibilities have yet to be clearly defined. In this paper, it gives the structure of the smart grid and summarizes five features for the smart grid such as self-healing, interactive, optimization, compatibility, integration and the differences between smart grid and traditional grid. It finally concludes that smart grid is the inevitable result for the economical and technological development. China should speed up the research and development for smart grid.