A Distributed Optimization Method for Optimal Energy Management in Smart Grid

This chapter presents a distributed optimization method named sequential distributed consensus-based ADMM for solving nonlinear constrained convex optimization problems arising in smart grids in order to derive optimal energy management strategies. To develop such distributed optimization method, multi-agent system and consensus theory are employed. Next, two smart grid problems are investigated and solved by the proposed distributed algorithm. The first problem is called the dynamic social welfare maximization problem where the objective is to simultaneously minimize the generation costs of conventional power plants and maximize the satisfaction of consumers. In this case, there are renewable energy sources connected to the grid, but energy storage systems are not considered. On the other hand, in the second problem, plug-in electric vehicles are served as energy storage systems, and their charging or discharging profiles are optimized to minimize the overall system operation cost. It is then shown that the proposed distributed optimization algorithm gives an efficient way of energy management for both problems above. Simulation results are provided to illustrate the proposed theoretical approach.