Global warming, environmental degradation, clean energy production, intermittent, volatile, and unpredictable renewable energy sources (RES’s), occasional peak demand on the system necessitates energy management (EM). Demand response (DR) programs in the distribution network can be seen as one of the foundation stones in the future of EM. This article illustrates the need for EM using DR, its benefits, types of loads, clustering techniques, price-based demand response (PBDR) etc. To accomplish the EM goals and to attain the economic benefit, DR employs peak shifting, peak clipping, valley filling and load growth. However, the accumulation of large loads at low electricity prices creates local peaks, this phenomenon is referred to as payback or rebound effect (RE). The occurrence of RE at low price zone heightens the volatility of market clearing price (MCP) and the operational cost of the microgrid. Inherently, the scheduled inelastic consumers at low price zone suffer from increased MCP and therefore, the total consumer tariff (TCT). The occurrence of RE depends on the load curve, peak to average ratio, electricity price and the percentage of interruptible loads present in the system. Unclear pricing methods impede the participation of customers in DR events. Moreover, majority of techniques presented in literature are of centralized frameworks that needs complex communication technologies. To fill these glitches the proposed work uses a simple distributed scheduling approach based on alternating direction method of multipliers (ADMM) to alleviate the energy management using an IEEE-18 bus system. The load factor increases from 0.79 to 0.83. Using DR lowers the peak power demand on the MG from 82 to 78 kW without compromising customer comfort or satisfaction. The TCT was lowered from scenario 1 to scenario 4 from 3058 to 2254 euros. The system's average demand dropped from 65.54 kW to 64.8 kW. IEEE-33 bus system was considered to assess the impact of RE on the MCP and TCT. Additionally, the marginal generator provides 72.51 kW of electricity in sub case 3 and 166.26 kW of power in sub case 2. Due to a decrease in power dispatch from the marginal generator, TCT increased from sub case 2 to sun case 3 by 11,046.41 rupees to 12,912.75 rupees. In contrast, TOC decreased from 6495.45 rupees to 6150.75 rupees from sub case 2 to sun case 3.
