Demand-side management (DSM) involves a group of programs, initiatives, and technologies designed to encourage consumers to modify their level and pattern of electricity usage. This is performed following the methods such as financial incentives and behavioral change through education. While the objective of the DSM is to achieve a balance between energy production and demand, effective and efficient implementation of the program rests within effective use of emerging Internetof- Things (IoT) concept for online interactions. Here, a novel DSM framework based on the diffusion and alternating direction method of multipliers (ADMM) strategies, repeated under a model predictive control (MPC) protocol, is proposed. On the demand side, the customers autonomously and by cooperation with their immediate neighbors estimate the baseline price in real time. Based on the estimated price signal, the customers schedule their energy consumption using the ADMM cost-sharing strategy to minimize their incommodity level. On the supply side, the utility company determines the price parameters based on the customer’s real-time behavior to make a profit and prevent infrastructure overload. The proposed mechanism is capable of tracking drifts in the optimal solution resulting from the changes in supply/demand sides. Moreover, it considers all classes of appliances by formulating the DSM problem as a mixed-integer programming (MIP) problem. Numerical examples are provided to show the effectiveness of the proposed framework.
