Utility demand response operation considering day-of-use tariff and optimal operation of thermal energy storage system for an industrial building based on particle swarm optimization algorithm

• Time-of-use (TOU) tariffs are effective for load management in commercial buildings.
• Industrial buildings experience different loads on different days.
• Day-of-use (D-TOU) tariff is developed for better economics and load management.
• Optimal size and operation of thermal energy storage with heat pumps are determined.
• Several scenarios are examined to demonstrate the positive effects of D-TOU tariff.

Utility demand response (DR) programs and time-of-use (TOU) tariffs are designed to reduce customers loads as well as energy costs during peak periods in commercial and residential buildings. While TOU tariff is structured based on dividing a day into several periods with different corresponding electricity prices, the concept can be expanded for developing day-of-use (D-TOU) tariff, where different days in a week are treated differently, as experienced for industrial loads. Further, the advantages of such tariffs can be realized when demand side management technologies such as thermal energy storage (TES) in conjunction with heat pump systems are utilized. The goal of this study is to evaluate the effects of D-TOU tariff with four day types in a week on DR programs operation for an industrial customer with TES charged by an electric heat pump. The four day types considered in a week include Monday as start-up working day, Tuesday to Friday as regular working days, Saturday as half-day working day, and Sunday as weekend day. To achieve the goal, TOU and D-TOU tariffs are modeled and the TES system equipment capacities and operation with cooling and heating tanks are optimized based on particle swarm optimization for an industrial building load. The results for various pricing scenarios show that D-TOU tariff can be beneficial to the utility company and customer, as peak loads for electricity in day types 1, 2, 3 and 4 are reduced by 54, 52, 47 and 44% and customer costs for electricity cooling are lowered by 14, 13, 11 and 8%.