With the growing trend of plug‐in electric vehicles (PEVs), the charging load of PEVs can have a huge impact on current transmission‐level system. In the meantime, there also comes a great potential in the optimisation aspect for both power generation economic and power transmission safety concerns. Here, a dual‐optimisation algorithm is developed to minimise the total production cost of power sources including renewable energy resources (RER) and PEV cluster. In the meantime, the overloading in transmission lines and transformers is avoided. Linear programming and DC optimal power flow (DCOPF) are separately applied to step one and step two optimisation. The simulation result from a modified IEEE 9‐bus system reveals that dual‐optimisation method successfully reduced the production cost based on a hybrid model of power grid in step one optimisation. In step two optimisation, the overloaded transmission line is detected and held at capacity limit to prevent overheating. In conclusion, in dual‐optimisation algorithm, PEVs can serve as both the energy storage device and the energy supply device. Consequently, the total production cost can be reduced, and the optimal power flow can be obtained.