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

Abstract 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.