This study proposes a new model of demand response management for a future smart\ngrid that consists of smart microgrids. The microgrids have energy storage units, responsive loads,\ncontrollable distributed generation units, and renewable energy resources. They can buy energy from\nthe utility company when the power generation in themselves cannot satisfy the load demand, and\nsell extra power generation to the utility company. The goal is to optimize the operation schedule of\nmicrogrids to minimize the microgrids� payments and the utility company�s operation cost. A parallel\ndistributed optimization algorithm based on games theory is developed to solve the optimization\nproblem, in which microgrids only need to send their aggregated purchasing/selling energy to the\nutility company, thus avoid infringing its privacy. Microgrids can update their operation schedule\nsimultaneously. A case study is implemented, and the simulation results show that the proposed\nmethod is effective and efficient.
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