The Government of India is taking initiative in implementation of Smart Grid . Ministry of Power proposed the target year 2027. The present paper discussed power quality issues in smart grid and possible solution using Unified Power Quality Conditioner (UPQC). A simulation of proposed model is prepared in MATLAB SIMULINK using parameters of Madhya Pradesh Power networks. The system was studied under different fault conditions with and without UPQC. The results have been discussed and the effect of Unified Power Quality Conditioner in Smart Grid Operation and Control is examined