Massive increase of wind and solar power makes power system vulnerable to power imbalance, endangering its security. In distribution networks, the maximum utilization of local renewable energy is limited by the restricted hosting capacity of the networks. Electrical networks will be the critical bottle neck when increasing the share of carbon neutral power generation. The Smart Grid 2.0 project aims at removing the bottlenecks of transmission and distribution networks´ by harnessing the full capacity of converter connected resources and utilizing the modern connectivity with IoT sensors in order to support power system short term balance and full network capacity utilization. While doing so, the project develops a new generation of smart grid and creates new competitive edge for manufacturing industry for export markets.