The concept of smart grids enhances energy efficiency by utilizing digital technology to monitor and manage energy distribution and consumption dynamically. Smart grids enable real-time communication between utilities and consumers, promoting efficient use of resources. They facilitate the integration of renewable energy sources, enabling better management of energy loads and improving grid reliability. By providing consumers with data on their energy use, smart grids encourage conservation and allow for demand response strategies that optimize energy consumption during peak times, leading to cost savings and better sustainability.