Energy storage – both home-scale and utility-scale – has become more relevant as the use of renewable energy for electricity generation proliferates. It is particularly topical recently, as the Inflation Reduction Act includes tax credits specifically targeting energy storage projects. Energy storage (chemical batteries, pumped hydro storage, gravity-based batteries) transports electrical energy through time, from generation earlier to consumption later. Storage works when the aggregate amount of energy generated is adequate to satisfy aggregate demand, but there is a mismatch in the timing of supply and demand. Some basic fact patterns are: Demand More Variable than Supply. As discussed in previous posts, there is both a daily and a seasonal cycle to electricity usage. If a region’s generation is dominated by traditional base-load type power plants with high and constant generation capacity (nuclear, coal) or are quickly dispatchable (natural gas), there are two basic choices for meeting demand: either have enough generation capacity to cover the peak usage at any time, or marry sub-peak generation with the ability to store energy when demand is below supply and then release it for use when demand exceeds capacity. Supply More Variable through time than Demand. Supply can also be more variable than demand. Solar, for instance, generates electricity only during an 8-14 hour period during the daytime. The daily cycle of electricity usage varies but not this much: there is meaningful demand in the evening and through the night. So a grid with significant solar power will likely need to store daytime-generated energy to be deployed at night. Unplanned Intermittancy. A special case of supply variability: power outages due to storms or maintenance, or unfavorable weather conditions for solar / wind, can cause generation to temporarily fall short of demand. This post will illustrate, using real-world electricity demand data and overly simplistic supply models (with no unplanned outages or weather intermittency) what profile of storage could be useful: how much energy capacity is needed and how frequently it is used. In all cases there will be a real-world question of whether it is more efficient to deploy capital in storage solutions or more generation capacity to compensate. A complete answer to that question is beyond the scope of this post, but my analysis provides some indication of feasibility of different architectures. Here’s a summary: In the constant generation model of traditional generation plants, it appears feasible to use battery storage to substitute for power generation that would cover the last ~10 - 20% of peak demand. Somewhat frustratingly, the strong variability of demand still means that this implies generation capacity that is adequate to supply more than 1.5 times the aggregate energy needs. In a variable generation model like predominantly solar,1 there is some benefit in warm climates with mild winters from aligning higher summer generation with higher summer demand. But substantial storage is needed (probably more than is economical) to manage the day-night cycle. As with fixed generation however, there is so much variability of demand over time that the generation capacity measured in GWh needs to be a reasonable multiple of aggregate energy consumed. A combination, heavily weighted towards fixed, can get benefits of both fixed generation (no daily cycle) and solar (more generation with higher summer demand). This post ignores wind power, which is too unpredictable for me to handle at this time. ↩