The employment of a TES system to improve the performance of a DH network integrated with a CHP station is investigated. Thermal energy demand fluctuations is the main issue threatening the viability of CHP/DH projects; therefore, TES facility can be coupled with CHP plant by a smart operation strategy to match the production and consumption profiles, and result in better consequences. To evaluate the system performance and energy saving potential, the hourly simulation of a thermocline hot water storage tank coupled with CHP/DH network is carried out, considering annual thermal load of the DH network. Optimal TES size is investigated from energetic, environmental and economical viewpoints. Results depict that by coupling five 1100 m(3) hot water storage tanks with CHP/DH plant, the annual CHP efficiency increases by 1.12%, and annual fuel consumption rate and CO2 emissions decrease by 2.6%. (C) 2013 Elsevier Ltd. All rights reserved.