Hierarchical Energy Management Strategy for a
Community of Multi Smart Homes
Sima Aznavi
Electrical and Biomedical Engineering Department Electrical and Biomedical Engineering Department
University of Nevada, Reno University of Nevada, Reno
Reno, NV, USA
s.aznavi@nevada.unr.edu
Abstract—In this paper, a hierarchical energy management
strategy for a community of multiple smart homes is proposed.
This strategy reduces the stress on the power grid caused by
uncoordinated energy scheduling of smart homes. Different
stochastic operational conditions for plug-in electric vehicles
(PEVs) and household battery storages are considered. First, cost-
effective day-ahead energy schedules under these operational
conditions are calculated by individual home energy management
systems (HEMSs). Then, a centralized decision making unit
determines the day-ahead schedule for each household with the
aim of reducing the stress on the grid. Comprehensive results
obtained from simulations show that the proposed hierarchical
energy management strategy not only maintains a low energy
purchase cost for each individual household, but also smooths the
overall grid power profile requested by all smart homes combined.
Keywords—Day-ahead energy schedule, hierarchical energy
management, stochastic fractal search (SFS) optimization, smart
home, plug-in electric vehicles (PEV).
I. INTRODUCTION
Smart homes equipped with renewable energy sources have
developed significantly within the past few years and play a
significant role in facilitating the penetration of renewable
energies and energy saving technologies. At the same time,
owing to the advancements in transportation electrification,
plug-in electric vehicles (PEVs) have increasingly grown in
recent years. As flexible resources, the integration of PEVs with
smart buildings is creating new opportunities for the energy
management infrastructure. However, stochastic and
uncoordinated PEV charging activities of smart households may
lead to undesired stress on the distribution system.
The existing research work has made good contributions to
the energy management in smart buildings. An energy
management method in a building is proposed in [1] to reduce
the impact of PEV charging on the grid with different charging
strategies. In [2] a hierarchical community management system
is proposed that is based on scheduling combined cool and heat
power plants and demand response (DR). DR is presented in [2]
to smooth the electric tie-line power fluctuations by managing
loads and distributed generations. Fair cost distribution among
multiple smart homes and the microgrid through energy
management system is presented in [3]. A two-layered energy
management strategy to smooth the fluctuations of the electric
power exchanges with respect to uncertainties is presented in [4].
An optimal scheduling of smart home energy consumption is
studied in [5] with the aim of minimizing the forecasted day-
ahead energy usage cost. To achieve this, distributed energy
978-1-5090-6684-1/18/$31.00 ©2018 IEEE
Poria Fajri Md. Rasheduzzaman
Dept. of Polytechnic Studies
Southeast Missouri State University
Reno, NV, USA Cape Girardeau, MO, USA
pfajri@unr.edu mrasheduzzaman@semo.edu
resources operation and household electricity consumption tasks
are scheduled based on real-time electricity pricing. A charging
scheme is also adopted to reduce the peak demand from the grid.
Authors in [6] focused on smoothing out the load variance in a
household by coordinated charging of existing PEVs. They
accomplished to reduce the variance of the load power and
energy losses by regulating the charging profiles of the PEVs.
To improve the efficiency and reduce the average cost of
electricity purchase, a distributed real-time electricity allocation
is proposed in [7] for grid connected residential microgrids.
Research in [8] shows that the U.S. grid peak demand can
increase by a factor of 2.5 to 6.5 due to PEV charging, assuming
that every household in the U.S. owns only one PEV. This peak
load increases energy demand from the transmission grid and
can lead to further aging of the power system equipment and
frequent tripping of the relays during overload conditions. Thus,
independent decisions on energy scheduling of households can
cause undesired effects such as contingencies and instabilities in
the network [9]. Therefore, the interactions between the energy
management decisions of multiple households would be a
challenging issue in future power management.
In recent years, more attention has been directed to the
development of better optimization algorithms for smart home
energy management frameworks. Based on these efforts, it is
clear that optimization for individual smart homes may have
multiple solutions that slightly differ in terms of energy cost. As
a result, a study on the selection of the best energy scheduling
for a community of households is a worthy effort. Given this
background, this paper proposes a two-stage energy
management strategy for a system consisting of multiple smart
homes. The goal of the proposed strategy is to reduce the energy
purchase cost for each household, while at the same time,
lowering the stress on the power grid. In the first stage, day-
ahead energy scheduling is performed and the cost of purchasing
energy from the grid is optimized separately through each
household’s energy management unit. Such a shortsighted
strategy may threaten the global benefits of the system. Thus, in
the second stage, the day-ahead energy schedules are sent to a
central decision making unit. The whole community is served by
the central decision making unit which is also responsible for
determining the power exchanges with the distribution grid. It
aggregates the energy schedules from individual energy
management units. Then, it organizes those schedules to reduce
the harsh fluctuations of the overall day-ahead energy imported
from the grid. This is an effective approach to alleviate the stress
on the network by selecting the right combination of smart home
energy schedules and distributing the required energy over the
24-hour period.
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 II. SMART HOME ENERGY MANAGEMENT SYSTEM
Over the past few years, classical residential building
structures have evolved into smart homes equipped with
advanced energy features. Smart homes are small energy
systems which may be equipped with distributed generation,
energy storage and loads. Coupled with the vehicle-to-grid
technologies, smart homes will play an important role in energy
conservation of future smart cities. Hence, the energy
management of smart buildings has become a global priority in
recent years.
Home energy management system (HEMS) of a smart home
attempts to manage the energy flow by scheduling the energy of
existing renewable sources and grid. The key functions of
HEMS are to monitor, control, and optimize this energy flow
within the household components, while meeting the goals such
as comfort and economic incentives of the owner. Several
approaches exist for the HEMS to achieve smart home
operational goals. Optimization techniques are typically used to
determine the energy schedule over a given time horizon with a
specific objective. The main advantage of an optimization
technique is providing the optimal or near-optimal solutions
with respect to any objective.
In neighborhoods consisting of several smart homes, a
neighborhood energy management system enables the smart
homes equipped with individual HEMSs to communicate and
coordinate their actions through communication paths [9]. In this
paper, an energy management system for a community of smart
homes located in a neighborhood area is presented. This
community of smart homes resembles a hierarchically controlled
grid connected microgrid from the energy management
viewpoint. In a hierarchically controlled microgrid, the
centralized control system has the main responsibility for
energy scheduling of sources, participating in the energy market,
providing ancillary services, and so on [10]. Likewise, the
hierarchical control system for a community of smart homes
manages the electricity usage of all smart homes. According to
this infrastructure, the central decision making unit has direct
access to the whole information of individual HEMSs and
assigns the energy scheduling for each household based on the
operational strategy of the community. Moreover, the central
decision making system is responsible for determining the
energy exchanges with the grid. The decisions carried out by the
central decision making unit are then sent to each HEMS and the
strategy is applied.
III. PROPOSED CENTRALIZED HIERARCHICAL ENERGY
MANAGEMENT
In a community of multi smart homes, the harsh fluctuations
of imported power from the network can impose an additional
burden on the distribution grid. Therefore, smoothing the
fluctuations of power at the point of common coupling (PCC)
will benefit both the grid and the community. HEMS equipped
with optimization algorithms can effectively reduce the cost of
purchasing the energy for each household. However, this does
not necessarily guarantee a smooth profile at the PCC. On the
other hand, the results of each optimization may yield multiple
daily energy schedules that have very little cost difference. Thus,
a cost-effective energy management strategy may have several
solutions in terms of the day-ahead profile that slightly differ in
177
energy cost. By taking advantage of this, the owners and the grid
would benefit from this flexibility through selecting the
household energy profiles that not only keep the owners’ energy
cost down, but also their interaction can flatten the grid power
profile at PCC. Thus, a two-stage hierarchical energy
management strategy for a community of smart homes is
presented in this paper with the goal of reducing the energy
purchase cost for the end users, while minimizing the stress on
the power grid. The two stages of the proposed hierarchical
energy management system are explained below and its overall
scheme is illustrated in Fig. 1.
A. Stage 1
This stage consists of individual HEMS for each household
which provide cost-effective day-ahead energy scheduling while
satisfying household load demand and operational constraints.
The operational constraints are discussed in Section A.2. Several
energy schedules may exist for each household that all satisfy
user benefits and slightly differ in energy cost. Thus, in this
stage, different day-ahead energy schedules that yield the lowest
cost and are in the same price range are selected from the
optimization results. This increases the flexibility of the central
decision making unit in stage 2, to choose the final energy
schedule for the community based on the results of stage 1. Thus,
in stage 1, several candidate schedules with low operating costs
are selected from the optimization results to be sent to the second
stage.
A.1 Objective Function
In the first stage, the objective of the HEMS equipped with
optimization is defined such that the total buying cost from the
grid is minimized. For this study, a one-day cycle is considered.
The 24-hour period of a day is divided into smaller time intervals
(Δt = 30 minutes) which are the smallest units of time used by
the energy management strategy. 15 minutes and 1 hour
sampling times have also been examined during the simulation
development phase. It was observed that shorter time span,
considerably increased the simulation time and calculation
burden, while a 1 hour sampling time slightly decreased the
precision of calculations. The total cost is calculated to be the
sum of the hourly costs of all instants over a 24-hour period and
is given as
∑ ∗ (1)
where is the absorbed energy from the grid in kWh and
¢
is the grid price in ( ) at hour h.
A.2 Constraints
In the optimization process, the operating constraints of the
PEV, household battery storage, and system total power balance
should be considered.
A.2.1 Power Balance
The amount of generated energy should equal the consumed
energy at every instant, h. This is given by
(2)
 Household 1 ... Household (2)‐(k‐1) ... Household k

Stage1: Day‐ahead Cost

Objectives Day‐ahead data forecasts Day‐ahead data forecasts Objectives
Load profile, PV output Load profile, PV output
Constraints Grid price Grid price Constraints

Reduction
Day‐ahead dispatch Day‐ahead dispatch
Minimum daily cost Minimum daily cost

Day‐ahead Day‐ahead Day‐ahead Day‐ahead

... ...
schedule 1 schedule n schedule 1 schedule n

Stage2: Grid Power

Smoothing
STD (1) ... STD (nk)

Minimum STD

Day‐ahead schedule ... Day‐ahead schedule

of household 1 of household k

Fig. 1. Flowchart of the proposed hierarchical energy management system.

where is the output power of the PV at hour h. and . The constraints for the battery storage and
and are the power of the household battery and PEV at PEV are given in (7) and (8).
hour h, respectively. is the imported power from the ∗
grid and is the household load at hour h. All values are 1 (5)
in kW.
∗
The battery and PEV power limits can be described by (3) 1 (6)
and (4), respectively.
_ _ (7)
_ _ (3)
_ _ (8)
_ _ (4)
where and are household battery storage and
where _ and _ are the minimum allowed PEV battery capacity in kWh.
charging/discharging power of the household battery and PEV, B. Stage 2
respectively. _ and _ are the maximum allowed
In this stage, selected day-ahead energy schedules obtained
charging/discharging power of the household battery and PEV,
for each household from stage 1 are analyzed with the aim of
respectively.
minimizing the stress on the grid. The central decision making
A.2.2 State of Charge unit organizes the household schedules to reduce the standard
Equations (5) and (6) represent the state of charge (SOC) deviation (SD) of the cumulative day-ahead imported energy
calculations for the battery and PEV. Due to lifetime from the grid. It aggregates all the day-ahead schedules received
considerations and to avoid over charging or deep discharging, by the HEMSs. Different combinations are evaluated such that
the SOC for both PEV and battery is limited to a range set by each combination consists of only one schedule from every
household. In the decision making stage, the SD of the grid

178
power profile is considered as the criterion for selecting the best The initial SOC of PEVs were randomly selected between 35%-
profile according to (9). 50% and the initial SOC of each household battery storage was
randomly chosen within the range of 30%-45%. The household
:
battery capacity was considered to be 14 kWh. Other system
,
(9) parameters used for this simulation are listed in Table I. The
, , ,∀ ∈ 1,2, …
final desired SOC of the PEV was also set to 70 2% for
simulations to guarantee enough energy for the next trip. For
where, is the best profile with the least SD. , this simulation, the utility grid price and load data, shown in
is the 24-hour power profile at PCC as a result of the ith Figs. 3 and 4, were extracted from PJM and ComEd's and for
combination which includes only one day-ahead schedule from March 31st, 2017, respectively [12], [13].
each household. n is the number of candidate schedules from
each household and k is the number of households. TABLE I. SYSTEM PARAMETERS USED FOR SIMULATION
The combination which minimizes the total SD guarantees a Parameter Value Parameter Value
smooth profile at the PCC. Once this combination is found, its SOCmax of PEV 90%
SOCmax of household
80%
composing candidate profiles are assigned to each battery storage
corresponding HEMS as the final day-ahead energy schedule for SOCmin of household
SOCmin of PEV 30% 20%
battery storage
that household.
Final desired
70 2% PEV battery capacity 30 kWh
SOC of PEV
IV. MULTI SMART HOME TEST SYSTEM UNDER STUDY
In this paper, a community that consists of ten smart homes
(k=10) is considered. Each household consists of home
appliances, a PEV, PV panels, and a household battery storage
system. The community is connected to the grid and can import
unlimited power from the grid. It is assumed that power flow
from the grid is unidirectional and the smart homes do not sell
back energy to the grid. It is also assumed that the PEV and the
battery both have bidirectional power flow capability and can
charge or discharge, within their limits, at any given time. Fig. 2
shows the structure of the system comprised of multiple smart
homes. The energy schedule of each household assigned by the
central decision making unit is implemented by the
corresponding HEMS which is responsible for the control of
energy exchange between the PV, home appliances, PEV,
battery storage, and the utility grid.
Fig. 3. Photovoltaic generation and load demand.

Fig. 2. Multi smart home test system under study.

In this paper, stochastic fractal search (SFS) optimization

algorithm is applied to optimize the day-ahead energy cost. SFS
was first introduced in [11] and is used to solve both constrained
and unconstrained, either single objective or multiobjective
optimization problems based on Fractal concept [10].
Simulations were carried out for various scenarios with
different PEV arrival times and initial PEV and household
battery SOCs. In this case study, ten random scenarios were
selected as the operation conditions of the ten households. The
PEVs arrival time were randomly chosen between hours 16:00-
20:00 and it was assumed that they leave at 8:00 the next day.
Fig. 4. Grid hourly price.
V. SIMULATION RESULTS
In this study, two scenarios were considered. In the first
scenario it was assumed that all the households were only
equipped with individual HEMSs of stage 1. Fifty optimizations
were performed and the solution with the lowest cost was
selected as the final day-ahead profile. Equation (1) was
considered as the objective function and day-ahead cost
minimization for each household was performed considering the

179
operational constraints described in (2)-(8). In the second
scenario, the hierarchical energy management system, equipped
with stage 2 was added to the system with the objective of
minimizing SD of the grid power at PCC. Fig. 5 and Fig. 6 show
the minimum cost of the day-ahead schedules for households 1-
5 and 6-10 of scenario 1, respectively.

Fig. 7. Three candidate schedules with the lowest price for household 3.

In stage 2, the central decision making unit calculates the SD

Fig. 5. The cheapest day-ahead schedules for households 1-5.
of the grid profile for all combinations. Since each combination
includes ten daily schedules, and only one candidate from every
household takes part in the combination, therefore, 310 scenarios
are analyzed in the second stage. Finally, the combination with
the least SD is selected as the final combination and based on
this result, the daily scheduling for each household is assigned
by the central decision making unit. Table III shows the
candidate schedules for each household sent to stage 2, with the
schedules that contributed to SD minimization highlighted as the
final outcome.

TABLE III. CANDIDATE PROFILES AND OPTIMUM OUTCOME SCHEDULES FOR

SCENARIO 2
Cost (¢) Cost (¢)
Profile
1 2 3 1 2 3
Number
Household 1 172 174 175 Household 6 187 188 190
Fig. 6. The cheapest day-ahead schedules for households 6-10. Household 2 176 177 178 Household 7 182 183 186
Household 3 180 182 183 Household 8 177 178 180
Household 4 182 183 184 Household 9 176 177 179
In scenario 2, the first stage was considered to be the same Household 5 182 183 184 Household10 172 173 174
as scenario 1, however, three candidate schedules (n=3) with the
lowest operating costs were selected amongst the fifty solutions Fig. 8 shows the community’s daily power profile at the PCC
of each household. These candidates were sent to the second for both scenarios. According to these results, the SD for
stage. Table II shows the cost of energy for the three candidates scenario 1 is 6.25 kW, while this value is 1.64 kW for scenario
of each household, obtained from stage 1 which include 2, which is much lower in comparison. The results also show
minimum and near minimum prices. According to Table II, it several peaks in grid power for scenario 1, while scenario 2 has
can be seen that the difference between the total daily cost of a smoother profile. Further analysis of the results reveals that
purchasing energy from the grid is negligible for the three after hour 8:00 when the PEVs leave, the grid profile for both
selected candidates. Therefore, the user’s benefit is not scenarios are almost the same. During this time, the imported
sacrificed by choosing one schedule over another. As an power from the grid starts to decrease. On the other hand, with
example, Fig.7 shows three candidate schedules for household the absence of the majority of PEVs during hours 12:00-18:00
3. By comparing the results of this figure and the results obtained and higher PV generation during this period, the required grid
from Table II, it can be seen that although the cost difference is power is at its lowest value. However, during hours 20:00-8:00
less than 2%, the optimization yields totally different day-ahead and in the presence of all PEVs, since the generated PV power
profiles. is at its lowest value, the required power is mostly imported from
TABLE II. OPTIMUM RESULTS FOR THREE CANDIDATE PROFILES the grid. On the other hand, during this interval, the residential
Cost (¢) Cost (¢) load is also low and therefore the PEVs have the greatest effect
Profile
1 2 3 1 2 3 on the daily profile. From this viewpoint, it can be concluded
Number that the proposed energy management system is more effective
Household 1 172 174 175 Household 6 187 188 190
in reducing the peaks and smoothing the gird profile during the
Household 2 176 177 178 Household 7 182 183 186
Household 3 180 182 183 Household 8 177 178 180 time when PEVs are present.
Household 4 182 183 184 Household 9 176 177 179
Household 5 182 183 184 Household10 172 173 174

180

Fig. 8. Day-ahead imported power from the grid for scenario 1 and 2.
VI. CONCLUSIONS
In this paper, a hierarchical energy management strategy for
a community of multi smart homes was proposed. This strategy
is equipped with a centralized decision making unit which is
responsible for reducing the stress on the grid at PCC. By
organizing the day-ahead schedules obtained from each
household’s HEMS, it minimizes the SD of the overall imported
energy from the grid. Simulation results showed that the
proposed centralized hierarchical strategy is effective in
flattening the grid power profile at PCC, especially during the
presence of PEVs.
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