Control system with incentive-based control of building equipment

A method for controlling electrical energy storage, the method comprising:

• determining, for a plurality of time steps within a time horizon, an amount of electrical energy to store in the electrical energy storage or discharge from the electrical energy storage using a value function comprising:
• an expected revenue from participating in an incentive-based demand response (IBDR) program;
• an expected cost of participating in the IBDR program;
• and
• a penalty cost based on an amount by which a predicted output of the electrical energy storage changes between time steps within the time horizon;
• and
• controlling the electrical energy storage to store or discharge the amount of electrical energy determined using the value function.

One or more non-transitory computer-readable media storing instructions that, when executed by one or more processors, cause the one or more processors to perform operations comprising:

• estimating an expected revenue from participating in an incentive based demand response (IBDR) program;
• estimating an expected cost of participating in the IBDR program;
• estimating a penalty cost based on an amount by which a predicted output of controllable equipment changes between time steps within a time horizon;
• determining whether to participate in the IBDR program based on the expected revenue and at least one of the expected cost or the penalty cost;
• and
• operating the controllable equipment to participate in the IBDR program or not participate in the IBDR program based on a result of the determining.