For example, the team found that in Texas today, pumped hydro systems can provide added value today for solar or wind installations. In these systems, excess power is used to pump water uphill to a reservoir for storage, and then the water is released through a turbine to generate power when it is needed. The increased revenue the plant can produce, by waiting to sell the power into the grid until spot-prices for electricity -- the constantly-changing market rate that electricity distributors pay to producers -- are at their peak, would exceed the costs of the added storage system.
Further, they found that such pumped hydro storage provides more value than a storage system using lead-acid batteries even though its power capacity components would cost several times more. This is because a pumped hydro system has lower energy-capacity costs than lead-acid battery system. (Energy capacity refers to the overall amount of energy that can be stored in the system, and power capacity refers to how much energy can be delivered at a given moment from that system). A compressed air storage system could also add value comparable to that of the pumped hydro system. However, batteries are attractive, the researchers note, because they can be installed essentially anywhere and do not rely on natural features that exist only in some locations.
The researchers point out that much research on storage systems for renewable energy sources has focused on using the systems to smooth out the intermittent outputs to better match fluctuating demand. But in practice, most of these wind or solar farms are feeding into the grid, so what matters to potential investors is the price curve rather than the demand curve.
Surprisingly, it turned out that despite wide regional variations in the average prices and the amount of variability in demand and pricing, "the best storage technology in one location is also the best in the other," Trancik says. "This is because of the similarity across locations in the distribution of the duration of electricity price spikes. This pattern likely emerges because of constraints imposed by the daily cycle, and similarities in when people go to work and go home, and generally how they spend their time."
Whether an energy storage system is worth the cost today varies widely by location, because of large variations in the frequency and magnitude of spikes in the price and how the solar and wind resources fluctuate over time, she says. But the cost characteristics of the optimal storage systems are similar in all locations, the researchers found, because of certain common, emergent properties of electricity price fluctuations.
"This means that these results can be used to inform investments in storage technology development by the private sector and government, and can inform engineering efforts in the lab," Trancik says. "The results would have been less general and less useful to technology development efforts if we'd found that the direction of optimal cost improvement, trading off energy capacity and power capacity costs, was different across locations."