Currently

studies on energy management of microgrid operation have gained some achievement at home and abroad. However

most of the studies are concerned with the grid-connected microgrid while those on the islanded microgrid are relatively few. So

with an eye to the operation characteristics of the island microgrid

the demand-side management and dispatching method are enumerated. And an optimal operation model for energy management of an island microgrid is developed. Firstly

the significance of conducting demand-side management in the microgrid is analyzed. The load in the island microgrid is classified into three classes and treated as schedulable variables based on their electrical features and degree of importance. Secondly

a mixed integer programming optimization scheduling model is exploited to minimize the sum of the total operating cost and the value of lost load considering related constraints and then solved by CPLEX software. Simulation results show that the introduction of the demand-side management has enhanced the flexibility of energy management of the island microgrid

and increased the utilization of renewable energy

which eventually contributes to the reduction in the operating cost of the microgrid. This work is supported by National High Technology Research and Development Program of China (863 Program) (No. 2011AA05A103) and National Natural Science Foundation of China (No. 51277141).