Economic optimization of smart distribution networks considering real-time pricing

Hong Zhang, Dongmei Zhao, Chenghong GU, Furong LI, Bo Wang

Research output: Contribution to journalArticlepeer-review

15 Citations (SciVal)


With the development of smart meters, a real-time pricing (RTP) demand response is becoming possible for households in distribution networks. The power flow can be bidirectional in distribution networks which become smarter with distributed generators (DGs). It is expensive to import electricity from the generation far from load centers because of the cost of power loss and network use, so that it is more economical to use electricity generated by local distributed generators. Therefore, in order to curtail operating costs of distribution networks, this paper proposes a model of economic optimization conducted by distribution network operators. The electricity purchasing costs for distribution network operators are minimized by optimizing electric power from transmission systems and local distributed generators. Further, based on price elasticity, the formulations of load demand considering RTP are proposed with economic optimization of distribution networks. The economic optimization problems are resolved by an interior point method. The case study shows that peak load demand can be reduced about 3.5% because the household RTP and electricity purchasing costs of distribution network operators can save 28.86 £ every hour.

Original languageEnglish
Pages (from-to)350-356
Number of pages7
JournalJournal of Modern Power Systems and Clean Energy
Issue number4
Early online date9 Dec 2014
Publication statusPublished - Dec 2014


  • Distribution network
  • Economic operation
  • Electricity cost
  • Real-time pricing


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