At the EU and Croatian level, old generation energy meters are being replaced with the new more advanced smart meters allowing two-way communication between the system operators /suppliers and the end-users. The installation of smart meters is the first step necessary for achieving and implementing smart power grid concept, and this process is one of the priority projects at EU level. Smart meters provide constant monitoring of electricity consumption and metering data both to system operators / suppliers and end-users. By introducing smart meters, electricity consumption becomes completely transparent and consumers gain a better insight into their energy consumption, which ultimately results in more rational use of electricity in most cases. In addition, system operators have more detail network information that enables more efficient planning, development, and maintenance of the system. Better insight into network conditions is a prerequisite for more efficient and reliable network operation, network loss reduction, improvement of power quality indicators, easier detection of unauthorized power consumption, more accurate end-user cost accounting and a host of other benefits. Potential savings or revenues are also created on consumer side as they start to consume electricity more rationally and more automated according to the contracted tariff models but there is an opportunity of earning additional revenue from participating in various system auxiliary services. Consumer participation in a provision of system ancillary services is necessary condition for achieving the ambitious EU targets regarding RES market share. In this paper, a prototype of a developed advanced meter based on the ESP8266 module with two-way communication over the MQTT protocol will be described