This dissertation examines two important concepts: improvements to transcritical carbon dioxide (CO2) refrigeration systems being deployed in supermarkets, and their potential use for demand response and load shifting in a utility-connected application. As regulatory pressure increases to reduce the use of ozone depleting and greenhouse gases as refrigerants, the heating, ventilation, air conditioning and refrigeration (HVAC&R) industry is moving towards alternative refrigerants including natural substances such as carbon dioxide. CO2 has already gained traction as the refrigerant of choice for supermarket applications in some countries, but deployment in warmer climates has been slower due to concerns over efficiency when the cycle operates in transcritical mode. Among the cycle enhancements considered to overcome these concerns is the use of dedicated mechanical subcooling. Laboratory testing was performed on a transcritical booster system with mechanical subcooling to quantify the system performance with and without the subcooler. Data was used to develop and validate transient models, which in turn were used to study the system-wide effects of demand response, particularly short-term shedding of medium or low temperature load. Systems can provide value to the electric grid if they can be responsive to changes in electric utility generation, as indicated by direct calls to shed load or price signals. To further expand the potential usefulness of the refrigeration cycle in grid-interactive operation, the integration of thermal storage is considered. In particular, the integration of thermal storage into the subcooling system is investigated. The mechanical subcooler is used to “charge” a storage media (such as water or another phase change material) overnight, and the storage media allows the subcooler to turn off during peak hours. This allows the system to shift load and allow temporary reduction in electric power usage without a reduction in delivered refrigerating capacity. These two paths are potentially complementary: the load shifting of the integrated thermal storage provides long-term load reduction, while direct load shedding in evaporators allows more agile, short-term reductions. The models developed and validated with laboratory data and expanded upon with thermal energy storage and demand response approaches provide new learnings into enhanced load shifting and demand response capability. The findings of this work show that particularly in time-of-use rate structures with a high ratio of on-peak to off-peak pricing, the thermal storage and load shedding strategies here can provide a reduction in total refrigerating energy cost, even though the changes proposed introduce a slight increase in daily energy under the simulated conditions. In a simulated hot day for Baltimore, Maryland, the energy consumption was 2.6% higher using the thermal storage system than without. In the most extreme case, comparing an aggressive real-world Time-of-Use rate with thermal storage and load shedding against a flat-rate case from the same utility and no controls or storage, a cost savings reduction of 21% was calculated. Comparing baseline operation against a controlled load-shifting strategy under the same time-of-use rate plan, the cost reduction was in the range of 2.8-8.7% depending upon the specific plan.