Why Energy Storage?

Unlike most goods, electricity cannot be stored in an inventory. Rather, energy supply has to meet energy demand on a real time basis. This fact alone has dramatic implications for energy markets of today, and for our ability to build in renewable energy capacity to meet tomorrow's needs.

The volatile market for energy.

The modern electric grid system has a great deal of complex infrastructure in place to keep the power flowing without overloading the system, and consequently has gotten quite good at handling small changes in load (the aggregate demand for energy).

But what about large swings in demand?

Every day, most electricity markets experience a huge swing in demand between “off-peak” and “peak” conditions. Late at night and early in the morning, when most people are sleeping, energy demand is low.  During the afternoon, when people are at work, energy demand is high - especially during the summer when high temperatures lead people to turn up the A/C. To accommodate these changes in demand, power companies build “peaking units” that only come on for a few hours during the day when demand is high. These peaking units have many drawbacks: they are cost intensive to construct, and inefficient because they sit idle most of the time. They are also expensive to operate, and their impact is most directly seen when looking at price variations in the real-time market for energy. The graph below displays real market pricing data for the New York City region during one 24 hour period in June of 2011.

On June 9, 2011, prices in the real-time market in the NYISO region bottomed out at roughly $24 per MWh at 4am. Twelve hours later, at 4pm, they peaked at $451 per MWh, an increase of close to 20 times.

 

When the price of a commodity that we rely on as much as electricity can increase by more than 10-fold in the course of just a few hours, it's clear that we have a problem. At the heart of this problem lies a tremendous opportunity for energy storage. Energy storage would allow power companies to build an “inventory” of the cheap, cleaner, off peak power, and sell that energy back to customers when they need it during peak periods.

The renewables challenge.

To make matters more complicated, generation from intermittent energy sources such as wind comes at the discretion of nature, and often does not coincide with demand. In fact, because of the way atmospheric pressure systems work over land, inland wind farms tend to produce the most energy at night, and are relatively unproductive during the day. So, while many of us want wind energy to continue to grow as a source of clean, renewable energy, the current market conditions are distinctly unfavorable: inland wind farms produce the most energy when it is worth the least, and they struggle to capture the financial benefits of high energy prices during the day.

Any efficient grid-scale storage system enjoying wide implementation will narrow the gap between day-time and night-time market prices, by lessening the importance of the timing of energy demand. We believe that Triple-Point's economical solution, relying on proven science and off-the-shelf technology, is in the best position to deliver this large-scale storage today, and provide support for intermittent renewables such as wind for the future.