Today's electric grid is rapidly evolving to provision for heterogeneous system components (e.g. intermittent generation, electric vehicles, storage devices, etc.) while catering to diverse consumer power demand patterns. In order to accommodate this changing landscape, the widespread integration of cyber communication with physical components can be witnessed in all tenets of the modern power grid. This ubiquitous connectivity provides an elevated level of awareness and decision-making ability to system operators. Moreover, devices that were typically passive in the traditional grid are now `smarter' as these can respond to remote signals, learn about local conditions and even make their own actuation decisions if necessary. These advantages can be leveraged to reap unprecedented long-term benefits that include sustainable, efficient and economical power grid operations. Furthermore, challenges introduced by emerging trends in the grid such as high penetration of distributed energy sources, rising power demands, deregulations and cyber-security concerns due to vulnerabilities in standard communication protocols can be overcome by tapping onto the active nature of modern power grid components.

In this thesis, distributed constructs in optimization and game theory are utilized to design the seamless real-time integration of a large number of heterogeneous power components such as distributed energy sources with highly fluctuating generation capacities and flexible power consumers with varying demand patterns to achieve optimal operations across multiple levels of hierarchy in the power grid. Specifically, advanced data acquisition, cloud analytics (such as prediction), control and storage systems are leveraged to promote sustainable and economical grid operations while ensuring that physical network, generation and consumer comfort requirements are met. Moreover, privacy and security considerations are incorporated into the core of the proposed designs and these serve to improve the resiliency of the future smart grid. It is demonstrated both theoretically and practically that the techniques proposed in this thesis are highly scalable and robust with superior convergence characteristics. These distributed and decentralized algorithms allow individual actuating nodes to execute self-healing and adaptive actions when exposed to changes in the grid so that the optimal operating state in the grid is maintained consistently.