The uncertainty in fuel cost, the ageing of most existing grid, the lack of utilities’ supply capacity to respond to the increasing load demand, and the lack of automatically power restoration, accelerate the need to modernize the distribution network by introducing new technologies, putting the smart grid (SG) on spot. The aim of this paper is to carry out a detailed survey of the major requirements of (SG) and discuss the operational challenges arising from the integration of distributed generation (DG) in distribution networks (DN). These requirements dictate the necessity to review the energy and communication infrastructure, the automatic control, metering and monitoring systems, and highlight the features of smart protection system for a robust and efficient distribution grid. In addition, the paper aims to classify the energy storage systems (ESS) and explain their role for utilities, consumers and for environment. This includes the pumped hydro systems (PHS) and compressed air systems (CAS), battery energy storage systems (BESSs), double layer and superconductive capacitors, and electric vehicles (EVs). Since BESSs emerged as one of the most promising technology for several power applications, the paper presents an overview of their main features, management and control systems and operational modes. A survey about the utilization of BESSs in power system is presented.