Optimal Power Trading for a Micro-grid with Demand Response in Competitive Electric Market Abhilipsa Sahoo and Prakash Kumar Hota Abstract Nowadays, micro-grids (MG) are happened to be better performer and economically improved electricity provider in deregulated electricity market, and undoubtedly it possesses with enhanced reliability considering amalgamation of renewable sources and demand response. Also, improvised power trading mecha- nism, prepared by MG operators, is helpful for optimal dispatch of MG utilities in competitive energy market. In this study, optimal power trading has been done by implementing improved whale optimization algorithm (IWOA) for a grid-tied MG to minimize its operating cost. This optimal trading is attained incorporating incentive-based demand response (IBDR) and considering uncertainty of renew- able sources, load and market clearing price. These uncertainties are modeled using different probability distribution functions (PDF) by the method of scenario genera- tion and reduction. The applicability and efficacy suggested method are analyzed by simulating a MG test system. The consequences of this approach enhance the perfor- mances of MG in terms of economic operation and optimal solution. The impact of demand response significantly curtails grid energy and IBDR provides its optimality for end users by giving high incentives in comparison to curtailment price. Keywords Micro-grid · Power trading · Demand response · RES · IWOA 1 Introduction In today’s world, MG plays a key role for eliminating energy crisis through the incorporation of distributed energy resources (DERs) and demand response (DR). It provides reliable electrifications which help consumers by reducing their cost of utilization of electricity in a more efficient manner [1, 2]. Generally, a MG adopts method of operation of grid-connected mode. Also it can be operated in island mode [3–6]. In these two modes of operations, MG acts differently regarding to the power flow from source to load. If it approaches the grid-connected mode, then it can A. Sahoo (B ) · P. K. Hota Veer Surendra Sai University of Technology (VSSUT), Burla, Odisha, India © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 M. Mishra et al. (eds.), Innovation in Electrical Power Engineering, Communication, and Computing Technology, Lecture Notes in Electrical Engineering 814, https://doi.org/10.1007/978-981-16-7076-3_14 151