It is not unusual that the price for electricity can vary significantly over a period of 24 hours. Daily fluctuations usually range from 100-150%. The lowest prices can be found early in the morning where it starts growing and reaches it`s highest peak shortly after noon. We also consume less energy in weekends.
Energy storage systems can take advantage of these price changes. Storing energy when demand is low and discharging the same energy when prices go up could result in a nice profit.
How is the energy stored? Let`s take a look at hydroelectricity. The potential energy in water at the height of the water storage is converted into kinetic energy (motion) when the gates open and release it downhill.
Hydroelectric storage is the same process only the other way around: Cheap off-peak electricity is bought from the power grid to pump water uphill. In other words, the electricity is stored as potential energy for later use.
This is not only profitable, but is also associated with two key benefits to the electric power system:
- Load-shifting lowers the effective peak demand.
- More power plants can act as base-load resources due to higher energy demand overnight.
Let`s use geothermal power plants to illustrate the second point. There can be significant efficiency losses and costs associated with reduced output or temporary shutdown of base-load plants.
Unlike many other sustainable energy resources such as solar and wind, geothermal is outstanding when it comes to delivering a steady output of energy. This is why geothermal is a base-load energy resources.