Electricity is not easily or efficiently stored in large amounts. In an electricity grid, power generation and power consumption must be closely matched at all times. These are key concepts in our understanding of electricity. If power generation and power consumption get out of balance, blackouts and other systemic failures occur.
Electricity must be produced on demand, as needed. Naturally, demand changes throughout each day and throughout the year. Demands are met with a combination of power plants that are used all the time (base load) and others that are used when needed to meet peak demand. Together, they must have the collective capacity to meet actual demand, real-time.
Large swings in demand are expensive and problematic. When demand is low, expensive generating facilities (built to meet peak requirements) are sitting offline idle. When demand is high, all available generators are online running full tilt, stressing the system and risking reliability. Reducing large swings in demand allows for the more cost and energy efficient design and operation of the electricity grid and its generators.
To achieve this balance, widespread efforts are being made to involve the consumer in the management of electricity demand. Overall, the umbrella term for working with customers to balance their electricity usage with the available supply is called demand response. The essential component is some form of communication with the customer or the customer’s systems so that they know when a change in their demand is desirable (supply is low, use less or supply is high, good time to use more). There are many ways to accomplish this using tools and methods described as demand-side management (DSM). Here’s the definition from our friends at EIA [1]:
"Demand-side management (DSM): A utility action that reduces or curtails end-use equipment or processes. DSM is often used in order to reduce customer load during peak demand and/or in times of supply constraint. DSM includes programs that are focused, deep, and immediate such as the brief curtailment of energy-intensive processes used by a utility's most demanding industrial customers, and programs that are broad, shallow, and less immediate such as the promotion of energy-efficient equipment in residential and commercial sectors."
As the efficiency saying goes, the cheapest megawatt is the one we don't use. In demand response parlance, the most expensive megawatt is the last one we need.
Thanks in large part to Mother Nature and those pesky things called “seasons,” the United States' electric grid is built for capacity we almost never use. A new report from Advanced Energy Economy [2] (AEE) finds that 10% of the country's electric system is built to meet demand in just 1% of a year's hours. And reducing those demand peaks – typically met with the costliest, dirtiest electricity generation – can have a significant impact on consumers' bottom lines.
Other terms related to this topic are load shifting and load leveling (both refer to rescheduling electricity usage to reduce peaks), time-of-day or time-of-use pricing or real-time pricing (customer is charged more for electricity used during peak periods) and smart grid, discussed next!
The Electricity Storage Association explains the importance of grid energy storage, "Energy storage funamentally improves the way we generate, deliver, and consume electricity. Energy storage helps during emergencies like power outages from storms, equipment failures, accidents or even terrorist attacks. But the game-changing nature of energy storage is its ability to balance power supply and demand instanteously - within milliseconds - which make power networks more resilient, efficient, and cleaner than ever before.' (Frequently Asked Questions [4])
We also know that electricity is not easily or efficiently stored in large amounts. The Electricity Storage Association identifies six categories of Energy Storage Technologies [5]:
Primitive as it may seem, the grid-tied energy storage technology with the largest capacity is simply to pump water to a higher elevation, storing it as potential energy. Called pumped storage, or pumped hydro-power, the energy is recovered when the water from the higher elevation is used to drive turbines for hydroelectric power conversion.
The Electricity Storage Association [6] reports, "Because of the immense scale achieved through these applications, this is the most common type of grid-level energy storage based on megawatts installed today."
All in all, however, this process uses more electricity than it produces. So why do it? When a power plant has extra capacity, it generates electricity used to pump water uphill. Then, when the plant is stretched to capacity and electricity is at its highest price, this pumped storage can be used to generate low-cost hydroelectricity.
From the Tennessee Valley Authority,
Links
[1] http://www.eia.doe.gov/glossary/glossary_d.htm
[2] http://info.aee.net/peak-demand-reduction-report
[3] http://www.utilitydive.com/news/the-value-of-less-quantifying-the-benefit-of-peak-demand-savings/408565/
[4] http://energystorage.org/energy-storage/faq
[5] http://energystorage.org/energy-storage/energy-storage-technologies
[6] http://energystorage.org/energy-storage/energy-storage-technologies/pumped-hydro-power
[7] https://www.tva.gov/Energy/Our-Power-System/Hydroelectric/Raccoon-Mountain
[8] https://www.tva.com/Environment/Raccoon-Mountain-Refill