This paper presents a demand response-based optimization model for reducing the degree of network instability in smart electric grids with a special attention on the energy storage facility. In this paper, the economic distributed generators on a demand-by-the-hour basis as well as optimal battery dimension is estimated. The approach is based on the novel theory for smart grid optimization. Energy Storage Networks (ESNs) are used to develop a range of Demand Response (DR) solutions to help a region achieve optimum resource demand side management. A concept is presented to determine the maximum Battery-Based Energy Storage System (BBESS) feature to be installed in an electrical grid. The Fire Fly Algorithm (FFA) is then explored to plan the economic scheduling of the battery size. A Mixed Integer Linear Programming (MILP) problem is formulated for sizing the PV/wind turbine to BBESS optimally and both problems are solved with General Algebraic Modeling System (GAMS).