A smart grid is the combination of a traditional power distribution system with large amounts of renewable energy sources and two-way communication between suppliers and consumers. This combination is expected to deliver energy savings, cost reductions, and increased reliability and security, but smart grids introduce numerous challenges for the management of the resulting system. These include integrating large contributions from wind and solar electricity generation, managing bidirectional flows of power, and incorporating demand-response. We will give an overview of these challenges and present in detail one application of optimization in brokering for demand-response management that is joint work with François Gilbert, Patrice Marcotte and Gilles Savard.
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