(repost from elsewhere with edits)
We use a map but don't really like to track everyone's position down to the 1m mark, so I wish the grenade rules were less focused on scatter distance and more focused on opposed tests. I like the Suppressive Fire rules, so here's my take on how to make grenades/AOE spells work like suppressive fire (hereby dubbed "Jesus Saves and Takes Half Damage"):
1. Choose a target zone. Generally, the GM can rule how many targets are caught in the AOE, based on the weapon's blast radius.
2. Make the relevant attack test (i.e., Weapon skill + Agility). Record hits.
3. Any person in the target zone, but not behind cover or prone, at the time of detonation makes a Reaction + Edge (+Full Defense dice, if chosen) with a threshold equal to the attacker's hits.
* [OPTIONAL: Fragmentation blasts and indirect AOE spells reduce the defender's dicepool by 2, but high explosive grenades, missiles, rockets, and so on do not, due to their more penetrating and less shrapnel-based explosions.]
4. Targets may go prone as a Free action (if they still have one) or use Hit the Dirt as an Interrupt action to go prone.
5. If you're prone or behind cover at the time of detonation, you automatically succeed at the defense test.
6. Failure = Target suffers grenade's base DV. Other targets suffer a reduced DV, based on distance from the primary target or center of blast. Indirect AOE spells always deal full damage to all targets caught in the target zone.
7. Success = Target suffers grenade's base DV (adjusted by distance, if necessary) divided by 2. AP is unaffected.
* [OPTIONAL: If the character is behind flimsy or questionable cover, use the Barrier penetration rules. Roll a Structure + Armor to reduce the DV first, then allow the target to resist the remaining DV, but do not divide it by 2.]
8. Glitches and critical glitches result in hilarious and dangerous scatter, as the GM wishes.
[* OPTIONAL: Chunky salsa too rough? If a blast would bounce off the walls or ceiling of a small, enclosed space, the GM can increase the grenade's base DV by up to twice as much. Flashbang blast waves do not bounce.]
Suppressive fire usually deals no damage if you succeed at the test, hide behind cover, or go prone. Essentially, this house rule lets you use the suppressive fire rules for grenades, but instead of suffering a dice pool penalty for being caught in a suppressed zone, you always take at least half damage from a grenade. With decent armor, this half-damage can usually be soaked, but it's still capable of causing a few scratches.
It also gives a lot more control to GMs who don't want combat to devolve into count-the-radius. Grenades should be scary and worth splitting up your team, but not so scary that you can't do anything to counter or resist them.
I use Edge instead of Intuition on the defense test because dodging shrapnel is not generally something you can predict, but rather a matter of the grenade's bouncing trajectory, how the explosive material is distributed within the grenade, how good of a ditch you make when your body hits the ground, and other assorted factors that add up to something called "luck."