The European Union set ambitious objectives for the year 2020 in terms of increase of renewable generation, energy savings and reduction of GHG emissions. These objectives lead Europe towards a complete decarbonisation of the electricity system. There is a key role to be played by grids in facilitating the required transformation and this implies they need to become “smart”. In practical terms, making grids smart means deepening the energy system integration and grid users participation. Grids have to reconfigure notably for the integration of distributed generation (DG), the integration of massive large-scale renewable (RES), and for the integration of facilitating demand response. Smarter grids need a smarter regulation. A smart regulation reconfigures the incentives and coordination tools of grid companies and grid users and aligns them towards the new policy objectives. Some of the incentives provided to grid companies and grid users by the existing regulation must be corrected and some additional mechanisms must be conceived and experienced.