Optimization of design and operation is presented for a solar energy receiver combined with a thermal energy storage. The concentrated solar power on-demand (CSPonD) concept, which can be described, in brief, as a volumetric solar energy receiver system combined with a modified raft thermocline concept, is considered. The CSPonD concept is assumed to be providing heat for a general cogeneration scheme where power production is the main product of the cogeneration. With a constant power production, a secondary process is assumed to consume the process heat from the CSPonD and power cycle. Models are developed for thermal analysis of the energy storage, taking into account hourly and seasonal variations in the solar energy as well as the heliostat field efficiency. Nonlinear programming (NLP) is used for optimization of the design and operation. The sequential method of optimization and a heuristic approach (parallel computing) are implemented using an equation-oriented modeling environment and gradient-based local solvers. A strategy is presented to design and operate the plant, considering the significant seasonal variations in the solar energy. Three case studies are presented. The first one optimizes the design based on a design day and a desired thermal duty. The other two address optimal yearly operation of the plant. The results of the optimization case studies show that (a) the CSPonD concept aids in handling variations (hourly, daily, and seasonal) in solar energy, (b) CSPonD is a promising concept for cogeneration, (c) the mass of salt required in the CSPonD concept is not significantly lower than the salt required in a single-tank thermal energy storage system.