Abstract Future smart grids are expected to offer numerous advantages over the current electricity grid due to an improved efficiency of electricity production, distribution, consumption as well as sophisticated grid management and integration of distributed renewable energy sources. In order to enable these functionalities, however, additional equipment has to be installed, which, on the other hand, will lead to increased electricity consumption and more e-waste. This paper provides, for the first time, to the best of our knowledge, insights into the overall exergy cost related to the introduction of additional information and communication technology (ICT) equipment such as smart meters and other ICT devices required for future smart grids. We present results obtained using a model for the city of Vienna and considering all life cycle phases. Additionally, the impact of the components’ lifetime and various implementation options is shown. Since the environmental impact of the additional ICT equipment for smart grids is presented in a simple and transparent manner using a holistic approach referred as to as the exergy-based life cycle assessment (E-LCA) method, the results presented in this paper can easily be integrated in a more complete model of smart grids with the aim of assessing the exergy efficiency of various concepts and applications for future smart energy generation, distribution, and consumption systems.