Abstract: A large number of distributed new energy incorporated in the grid through inverters is one of the characteristics of smart grid， resulting in the change of the power flow and the voltage distribution characteristics of smart grid， which will influence the stability of the smart grid. A dynamic model to analyze the process of instability and chaotic behavior of smart grid was firstly presented by using droop control strategy， equivalent generator and dynamic load model. With the simulation results， the asymptotically stable， cycle operation， quasi-periodic operation， chaos， hyperchaos and voltage collapse could be obtained under different initial conditions in smart grid. And it was found that the bifurcation， chaos， hyperchaos and voltage collapse were the middle processes of instability in smart grid. To prevent the instability accidents， the timely and effective control should be taken before the critical point.

Key words: smart grid, instability, chaos, dynamic model, droop control