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By low, sell high; the basic advise for anyone trying to make any form of profit trading on the markets. It turns out that this advice is also taken by electricity grid operators.
Some electric storage technologies can run on timescales such as certain hours of the day, or certain days of the week, meaning that they will only store electricity from the grid at certain times. This allows the storage operators to buy electricity during off-peak times (such as night or at the weekend) when prices are low, and then sell the stored electricity during peak times (daytime and weekdays) when prices are much higher.
Pumped hydroelectric storage is one example of grid scale energy storage which can be used to take advantage of the difference between peak and off-peak prices. Overnight, a turbine uses low cost electricity to pump water uphill where it is stored in a reservoir. Then during the day the water is allowed to flow downhill through a hydroelectric generator where it produces electricity to be sold to the grid for a much higher price. This is currently the most popular form of energy storage in the US, with 22 gigawatts of capacity currently installed.
Other technologies are available, but very few are capable of storing energy on the scale required by electricity grids, at competitive prices.
Giant batteries provide a dynamic field for research and development, and could prove to be very important for utility scale energy storage, however the costs are still too high for them to provide cover that role at the moment.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com