The peculiarities of the development of smart microgrids of renewable energy generation as an element of the nexus of sustainable development in the system “energy—water—food—society—environment” are revealed. Organizational forms, advantages, critical factors and stimulation tools are clarified. Ways of inclusive integration of renewable energy generation into the process of reconstruction of the Ukrainian energy sector are shown. The central role of smart grids (SG) of renewable energy generation (REG) in creating a value chain at the level of local communities is substantiated. According to the socio-economic content of the SG, RES is divided into public and commercial. The main directions of functioning of the SG are revealed. These include management of energy flows in the microgrid, accumulation of excess energy generation, energy quality management, organization of service provision, interaction on energy markets, and maintenance of communication with the national energy system. The components of the SG REG value creation chain “energy—water—food—society—environment” at the level of local communities are presented. It has been proven that SG REG form a new circuit for ensuring the stability of functioning, supporting the energy security of both local communities and the country as a whole. It is shown that the energy sustainability of local communities increases due to the integration of various REG sources into a single SM. Their dependence on the centralized energy system is decreasing. Local communities get the opportunity to control the sources of energy generation and the costs of ensuring its operation. The efficiency of using energy generation and energy storage equipment increases, and its payback period shortens. The ecological stability of the community territory is being strengthened. Local SG REG contribute to the economic development of local communities and the expansion of their opportunities. The development of entrepreneurial initiative and business skills among community members as prosumers is stimulated. The development of the SG provides an opportunity to make effective decisions controlled by the community in the field of energy self-sufficiency, transition to decarbonization and democratization of the energy landscape. It is shown that SG REG provide a more viable, ecologically safe and fair energy future.