ABSTRACT A dual-media thermal energy storage system consisting of ceramic pebbles as a storage material and high-temperature heat transfer fluid (HTF) is analyzed for 1 MWe National Solar Thermal Power Plant. A numerical model has been formulated to study the thermocline behavior of tanks at different operating conditions. Based on the numerical model, a Lab-scale test facility is developed to validate the numerical model. The main objective of this study is to analyze the formation of the thermocline thickness for various operating parameters such as mass flow rate, void fraction, pebbles diameter, and thermal diffusivity of HTF and storage materials, along with a parametric optimization. The numerical result shows that, as the mass flow rate increases, the discharge time can cause the varying temperature at the outlet that is unenviable. The percentage movement of the thermocline layer was observed to be 70.37% with an increase in the mass flow rate of 18.75%. Similarly, it was found that the percentage increase in the volumetric heat transfer coefficient increased by 9.56%, with an increase in mass flow of 18.75%. The lower pebble diameter gives the superlative results for thermocline thickness, but it causes a great deal of pressure drop, which causes exergy loss. However, the percentage improvement in volumetric heat transfer coefficient was found to be 80%, with a 33.33% reduction in pebble diameter. It is concluded that a smaller size pebble diameter reduces the thermocline thickness, but it needs to be optimized to counter the problem of pressure drop. Parametric optimization has been done by considering various parameters such as D/L ratio, void fraction, mass flow rate, pebble diameter, thermal diffusivity of solid and HTF. Signal to noise ratio (SNR) has been taken into account to get the optimized value of the parameters. An empirical correlation has been developed to calculate thermocline thickness which is valid for a D/L 1. Further, a Techno-economic cost analysis of the TES (DMT) system for a 1 MWe CSP plant is done to study the economic facet of the system.