Reinforcement Learning-Based Building Energy Optimization for Flexibility Markets

Abstract

The rapid growth of energy markets and demand-side response programs has created a significant need for intelligent building-level control strategies to capture high volatility energy consumption in response to price signals and grid conditions. This paper presents a reinforcement learning (RL)-based building energy management framework that models commercial buildings as active, grid-interactive assets capable of providing real-time flexibility while maintaining occupant comfort. The proposed approach integrates historical and real-time data from IoT sensors, HVAC systems, and weather forecasts to build an adaptive environment for RL agents. The RL model is applied to learn optimal control policies that minimize operational energy cost in response to flexibility markets through load shifting, peak shaving, and short-term demand response actions. The framework also incorporates a forecasting module to predict 30-minute interval energy consumption using deep learning, enabling proactive decision-making under uncertainty. Results from simulation experiments demonstrate that the RL agents achieve significant cost savings compared to rule-based control strategies and offer a reliable, automated control to unlock underlying flexibility within building systems. The paper discusses problem formulation, algorithmic development, simulation workflows, comparative metrics, and practical deployment considerations for Saudi Arabia's smart city initiatives.