In recent years, the electrification of technology that is traditionally powered by fossil fuels has become a popular means to reduce greenhouse gases (GHG). Although the intentions are well founded, the strain on the electrical grid is seldom taken into consideration. When there is increased load on the grid, it is typically met by fossil fuel peaking power plants or additional fossil fuel infrastructure. Depending on the electrical generation technology deployed and the power plant efficiency, electrification can result in an increase in GHG emissions. To make better informed decisions for GHG reductions, policy makers and engineers are in need of smart energy systems, such as the Integrated Community Energy and Harvesting (ICE-Harvest) system. ICE-Harvest systems work with and can respond to changes on the electrical grid, providing demand response. The system creates electrical demand when renewable generation sources are available, reduces demand when fossil fuel generation is present, and can offset centralized generation using distributed combined heat and power resources. In this thesis, steps to design a micro-thermal network (MTN) for the ICE-Harvest system are outlined and different operational strategies are explored that respond to grid behaviour in real time. How fast the thermal network reacts to grid level variations is defined as the response time. The physical response of the thermal network is a temperature set point change. A design map was developed presenting multiple parameters that contribute to the response time, the trade-offs between them, and the corresponding temperature difference achievable. Through developing models in the equation-based object-oriented software Dymola, the viability for real time temperature set point changes in micro-thermal networks was explored. The MTN and the energy transfer stations (ETSs) that transfer energy between the thermal network and the buildings have been modeled. Yearly system simulations were conducted to analyze the corresponding performance of the MTN in terms of electrical requirements and overall GHG emissions. An operational range of the system was presented demonstrating the flexibility of the ICE-Harvest system. The simulation results have identified the ICE-Harvest system as a viable means to provide demand response to the grid and to reduce GHG emissions. Future work and recommendations will be made to improve the response of the system and further reduce electrical consumption and GHG emissions. / Thesis / Master of Science in Mechanical Engineering (MSME)