Energy management of hybrid AC/DC microgrid considering incentive‐based demand response program

Increasing the use of renewable energy in microgrids (MGs) offers environmental and economic benefits. However, the unpredictable and intermittent nature of available resources poses challenges for optimal MG scheduling. Hybrid AC–DC microgrids provide a solution, seamlessly integrating renewables while reducing energy losses and improving power grid reliability. Additionally, incentive‐based demand response programs promote flexible energy consumption, further mitigating the variability of renewable generation and enhancing grid stability. This paper investigates the challenges and potential of high renewable penetration in hybrid AC–DC MGs, analysing the role of demand response programs in system optimization. The microgrid's energy management is modelled using MILP, while a Stackelberg game represents the demand response program. These models are integrated to optimize energy management and demand response jointly. Simulations demonstrate the cost‐saving benefits of this integrated framework, achieved through coordinated flexible resource scheduling and incentive‐based demand response programming. With the incentive‐based demand response, consumers are provided monetary incentives to curtail a portion of their flexible loads during peak demand periods as determined by the energy management system. This allows the microgrid to reduce reliance on costly generation units and imports from the main grid. The results indicate that with IBDR, the total operation cost of the microgrid is reduced by 18.4% compared to the case without DR.