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The smart grid technology permits the revolution of the electrical system from a conventional power grid to an intelligent power network which has led the improvements in electrical system in terms of energy efficiency and sustainable energy integration. This study presents the energy management/coordination scheme for domestic demand using the key strategy of smart grid energy efficiency modelling. The structure consists of combining renewable energy resources, photovoltaic (PV) and wind power generation connected to the utility grid with energy storage system (ESS) in an optimal control manner to coordinate the power flow of a residential home. Based on the demand response schemes in the framework of real-time electricity pricing, this work designs a closed-loop optimal control strategy that is created by the dynamic model of the ESS to compute the system performance index, which is formulated by the cost of the energy flows. A dynamic distributed energy storage strategy (DDESS) is implemented to optimally coordinate the energy system, which reduces the total energy consumption from the main grid of more than 100% of the load demand. The designed model introduces a payback scheme while robustly optimising the energy flows and minimising the utility grid's energy consumption cost.