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Abstract-Traditionally, economic dispatch and demand response (DR) are considered separately, or implemented sequentially, which may degrade the energy efficiency of the power grids. One important goal of optimal energy management (OEM) is to maximize the social welfare through the coordination of the suppliers' generations and customers' demands. Thus, it is desirable to consider the interactive operation of economic dispatch and DR, and solve them in an integrated way. This paper proposes a fully distributed online OEM solution for smart grids. The proposed solution considers the economic dispatch of conventional generators, DR of users, and operating conditions of renewable generators all together. The proposed distributed solution is developed based on a market-based self-interests motivation model since this model can realize the global social welfare maximization among system participants. The proposed solution can be implemented with multiagent system with each system participant assigned with an energy management agent. Based on the designed distributed algorithms for price updating and supply-demand mismatch discovery, the OEM among agents can be achieved in a distributed way. Simulation results demonstrate the effectiveness of the proposed solution.Index Terms-Distributed algorithm, multiagent system (MAS), optimal energy management (OEM), smart grids.

In this paper, a fully distributed hierarchical control strategy is proposed for operating networked gridsupporting inverters (GSIs) in islanded ac microgrids (MGs). The primary control level implements frequency and voltage control of an ac MG through a cascaded structure, consisting of a droop control loop, a virtual impedance control loop, a mixed H 2 /H ∞-based voltage control loop, and a sliding-mode-control-based current loop. Compared to conventional proportional-plus-integral-based cascaded control, the proposed cascaded control does not require a precise model for the GSI system. The proposed secondary control level implements distributed-consensus-based economic automatic generation control and distributed automatic voltage control, which integrates the conventional secondary control and tertiary control into a single control level by bridging a gap between traditional secondary control and tertiary control. Simulation results demonstrate the effectiveness of the proposed hierarchical control strategy. Index Terms-Automatic voltage control (AVC), distributed consensus, distributed hierarchical control, droop control, economic automatic generation control (EAGC), grid-supporting inverter (GSI).