In Japan, large penetration of PV power generation is expected as a measure to cope with global environmental issue and energy security. The penetration may cause deterioration of stability, power quality and safety of the utility grid. In the paper, issues on the grid operation due to the large penetration of PV power generation are introduced. Concept of proposed Japanese style smart grid including distribution system area, transmission system area and customer side to cope with the issues and R&D results concerning the smart grid techniques using ICT, power electronics, demand side management, etc. are indicated based on CRIEPI’s research experiences to date.