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Evidence from a various research suggests that buildings hold a vital role in climate change by significantly contributing to the global energy consumption and the emission of greenhouse gases. Considering the trend of higher energy consumption in the building sector, it is important to influence this sector by decreasing its energy demand. District generation and cogeneration systems integrated with the energy storage system have been suggested as a potential solution to achieve such planned goals.

Unlike the older generation of the DHS, where the focus of the design was on minimizing the system heat loss, in 4th generation DHS, achieving higher system efficiency is made possible by picking the optimal equipment size as well as adopting the appropriate control strategy.

Designers have adopted different design methods for selecting the equipment size, however, finding the optimal size is a challenging task. This paper reports the development of a simplified methodology (dynamic optimization) for a hybrid community-district heating system (H-CDHS) integrated with a thermal energy storage system by coupling the simulation and optimization tools together. Two, existing and newly built communities, have been considered and the results of the optimization on the equipment size of both communities have been studied. The results for the newly built community is later compared with the one obtained from the conventional equipment size methods whereas static optimization methods and potential size reduction with the conventional method has been obtained.