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In recent times, the virtual power plant (VPP) is gaining more attention in power system engineering due to its tremendous potential in enhancing sustainable urbanism, in which, it supplies clean energy from distributed generators. Electricity is deemed a basic requirement for future automotive and ultra-modern technologies. The deficiency of traditional energy resources and their complex generation process make the production cost of electricity increase dramatically. Moreover, traditional power distribution systems are encountering issues in distributing electrical energy to fulfill customer demands. Therefore, this paper proposes a novel power management system named 'the hybrid genetic local binary knowledge (HGLBK) algorithm' to manage power distribution in the transmission lines and to optimize the total operation cost of the network. The hybrid optimization algorithm effectively controls the load by supplying the surplus power load to the adjacent feeders thereby optimally selecting and placing the distributed energy resource (DER). The proposed concept is implemented at Kayathar, Tamil Nadu in India, and their real-time data are utilized for modeling the VPP. The proposed VPP concept is implemented in the IEEE-9 bus system and the performance of VPP is simulated using the MATLAB software. The performance of the proposed HGLBK algorithm is assessed by comparing its effectiveness with the existing approaches. [ABSTRACT FROM AUTHOR]