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This paper discusses the smart energy model of a smart grid using a significant share of renewable energy sources combined with intelligent control that processes information from a smart metering subsystem. An algorithm to manage the microgrid via the demand-response strategy is proposed, accentuating the requirement that the total volume of energy produced from renewable sources is consumed. Thus, the system utilizes the maximum of renewable sources to reduce CO 2 emissions. Another major benefit provided by the algorithm lies in applying the current weather forecast to predict the amount of energy in the grid; electricity can then be transferred between the local and the main backup batteries within the grid, and this option enables the control elements to prepare for a condition yet to occur. Individual parts of the grid are described in this research report together with the results provided by the relevant algorithm.