This paper presents a quantitative analysis on the life-cycle cost saving potentials of active cold storage systems concerning the operational cost, initial investment and the space cost. A simulation-based optimal design method is developed and used to optimize the storage capacity and analyze the impact of the capacity on the life-cycle cost saving potentials. Using the actual load profiles of three real buildings of different sizes, the life-cycle cost saving potentials under demand limiting control are investigated under Hong Kong electricity price structure. The optimal storage capacities, monthly/annual operational cost savings and corresponding peak demand set-points are obtained from using the marginal decision rule. Results show that small scale storages can offer substantial annual net cost saving. In addition, it can help the grid to achieve higher grid power reliability by enhancing the demand response ability of buildings. (C) 2014 Elsevier Ltd. All rights reserved.