Modern Power systems are smart, interconnected, interdependent, load sharing and phased mission systems. Reliability of such complex power systems is very important in design, planning, installation and maintenance to provide electrical energy as economical as possible with an acceptable degree of reliability. In this thesis four new methods for reliability evaluation and enhancement of power systems are presented and further an innovative cost effect cloud service based smart early warning system using machine to machine (M2M) technology to improve the reliability of power systems is presented.