The Economics of Energy Storage

Electricity is instantaneous - it cannot be stored. Although the word storage is used in terms of supporting the electricity grid, electrical energy needs to be converted into a different form before it can be stored. This can be in the form of  chemical (batteries), potential (pumped hydroelectricity),  kinetic (flywheels) or heat energy (molten salt) to name a few. There is no shortage of ways in which we can store energy but the economics and efficiency of these storage methods have to date limited their widespread use.

Through the increased use of intermittent  renewable energy sources and distributed generation, electricity networks are becoming increasingly complex. This is compounded by the highly variable load profiles that tend to typify our current electricity usage,  the result of increased use of high energy home appliances such as air conditioners. Because of the incredibly high cost of meeting the afternoon peak electricity demand, energy storage is emerging as a more viable option on modern electricity grids as a way to collect energy at times of low electrical demand for use when demand is at its peak. Furthermore, energy storage can help ensure power quality in the face of fluctuating demand.

Pumped hydroelectricity systems, where excess energy is used to pump water into an elevated storage reservoir which can then be released through a turbine to generate electricity, is currently the most widely employed form of storage on electricity grids. When the environment permits - pumped hydro needs a sustainable water source and steep terrain - a pumped hydro system is an efficient and cost effective means to store energy produced in off peak times for use in peak periods. This storage method is highly successful, but its growth is limited by the challenge of identifying suitable locations close to high electrical demand.

While there is currently extensive and promising development work underway, the use of batteries for grid scale energy storage is not yet commercially viable. Batteries are however put to very effective use in remote area power applications that are not interconnected with a larger electricity grid. The most common type used in remote power systems is a lead acid flow battery, essentially a souped up car battery. Energy storage in these small systems helps to back up renewable power sources and enable generators to run at their most efficient output.

Kinetic energy storage through the use of a flywheel has been used successfully for power conditioning purposes in conjunction with wind farms in Western Australia and a multi megawatt flywheel storage facility was commissioned in 2011 in New York to help offset local peak power loads. As society's peak power demands increase and storage technologies continue to innovate, the coming years are likely to herald the more widespread adoption of energy storage as an integral component of electricity grids.