There are many facets to the use of electricity storage systems. Modern society uses numerous technologies in the long and often convoluted process of transferring electricity from its point of production to the eventual conversion of that electrical energy into heat, light, motive power, industrial processes, air conditioning, or other uses.
Two notable and easy to understand characteristics of the production and use of electricity that lead to complications in the overall process and sometimes place exceptional requirements on the electric power grid. The first is that electricity is not generally produced near the place where it is used. The second is that electrical energy is used at times that are convenient to the various users (e.g., the lights need to go on when the switch is flipped), which in many cases is not at the most convenient, effective, or efficient time for generation.
When matching demand for electricity with electricity availability, some entity along the chain – from generation to delivery – must provide a method (system or device) that accommodates the differences associated with these two characteristics. Electricity storage is an often-used approach (no matter what some “self claimed authorities” or publications say about the impossibility of storing electricity) that has achieved widespread use. Electrical energy produced when user demand is low is stored in many forms for later use. Most of the stored electricity is reused as electricity but a fraction ends up in forms that change the times of electricity use, e.g., thermal (ice) storage at night reduces air conditioning loads during the day.
Electricity storage provides several benefits for electric power utilities, transmission companies, electricity generators, and electric power end users. These benefits include: reduced financial losses due to poor power quality and power outages, energy price arbitrage involving charging with low priced “off-peak” energy for use later when energy cost and price is high, and a variety of services that can be described, but which may or may not provide revenue at present. An economist might say that though the benefits exist, they are not internalized, meaning that today no mechanism whereby the supplier can accrue revenue from the benefit. Simply put, the electricity market is not economically efficient because of the way the services are priced.
Over the past decade or so, which has seen several attempts at reregulation, the value of the benefits that electricity storage can provide have been expanded and quantified. Some have been evaluated, isolated, and even demonstrated. The latter include, for example, the class of benefits called “distributed” benefits (those which accrue because of the location of the storage capacity), and benefits associated with superior performance of the transmission system.