As traditional price-based demand response(DR)may increase the electricity cost for some customers with small flexible loads this paper presents a dynamic pricing DR scheme for active distribution network(ADN)with the help of Stackelberg model to ensure cost saving for users in the DR program. The loads of users are divided into two types

namely

fixed loads and shiftable loads. Shiftable loads are assumed to be aggregated by DR agents and the Stackelberg model is formulated to capture the interaction between the ADN and DR agents where ADN is the leader and DR agents are the followers. The existence of a unique Stackelberg equilibrium that provides optimal energy demand and optimal pricing is demonstrated. Numerical results show that the proposed DR design is effective in helping customers save cost.