Microgrids (MGs) contain a diverse mix of energy resources to provide safe and secure power to the consumers. Batteries are utilized in MGs for further energy security assurance as well as cost minimization. In this paper, an efficient approach is introduced for simultaneous energy management and optimal battery sizing to accomplish economic MG operation. Also, demand response programs are employed to further reduce MG operation costs (OCs) and strike a balance between supply and demand. The objectives sought in this context are the optimal values for DG generation levels, level of consumer participation and the respective incentive payments, battery charge and discharge levels and the amount of power exchange with upstream network within a 24-hour scheduling cycle so as to minimize OCs and maximize MG operator’s (MGO) profit as a result of demand response. In order to address the hybrid energy management system (EMS) and battery sizing problem, the proposed model is solved using whale optimization algorithm (WOA) in MATLAB software for a grid-connected MG. The results indicate that battery charge and discharge is significantly lowered through optimal battery sizing incorporated into the proposed approach. Manuscript profile