AbstractDue to the diminution of fossil fuels, the profitable usage of fuel for the generation of power is reducing. It is an extremely vital concern for power generation companies. The fossil fuel‐based power plant must operate within its fuel limits and contractual restrictions. Therefore, economic optimization is required to optimize the fuel cost for generation under fuel constraints. To address this issue, in this work, a horse herd optimization algorithm (HOA) is developed to solve multicounty fuel‐constrained dynamic economic dispatch with demand‐side management incorporating wind turbine generators, solar photovoltaic plants, and pumped hydro storage plants. The efficiency of the suggested HOA algorithm has been revealed on a selected test system. The HOA technique shows better convergence as compared with the other methods. Moreover, the computation time requirement of the HOA technique is also lower than that of other compared methods. From numerical results, it is observed that the consumption of fuel is sufficiently high if constraints are incorporated into the problem. Simulation results are matched up to those obtained from hierarchical particle swarm optimization with time‐varying acceleration coefficients, fast convergence evolutionary programming, and differential evolution. After comparison, it is observed that the recommended HOA offers a better‐quality solution.