Compressed natural gas stations serve customers who have chosen compressed natural
gas powered vehicles as an alternative to diesel and petrol based ones, for cost or environmental
reasons. The interaction between the compressed natural gas station and electricity grid requires
an energy management strategy to minimise a significant component of the operating costs of the
station where demand response programs exist. Such a strategy when enhanced through integration
with a control strategy for optimising gas delivery can raise the appeal of the compressed natural
gas, which is associated with reduced criteria air pollutants. A hierarchical operation optimisation
approach adopted in this study seeks to achieve energy cost reduction for a compressed natural gas
station in a time-of-use electricity tariff environment as well as increase the vehicle fuelling efficiency.
This is achieved by optimally controlling the gas dispenser and priority panel valve function under
an optimised schedule of compressor operation. The results show that electricity cost savings of up
to 60.08% are achieved in the upper layer optimisation while meeting vehicle gas demand over the
control horizon. Further, a reduction in filling times by an average of 16.92 s is achieved through a
lower layer model predictive control of the pressure-ratio-dependent fuelling process.