What is energy storage?

Energy storage means capturing energy when it is plentiful and cheap and releasing it when it is scarce and costly. Batteries, pumped hydro, heat stores and others all do this. Storage matters because electricity is hard to keep, and the ability to move energy across time lets a grid use more variable sources and avoid building capacity for rare peaks.

How it works

A store is described by three numbers: how much energy it can hold, how fast it can charge and discharge, and how much is lost on the way. The share of energy that comes back out is called round-trip efficiency, and no store reaches 100%.

Storage earns money through the gap between the low price at charging time and the high price at discharging time, after losses. As more storage is added the gap narrows, because storage raises demand when prices are low and adds supply when they are high. So the value of each additional unit tends to fall.

Example

Say a battery holds 10 MWh and has a round-trip efficiency of 85%. It charges at 20 per MWh and discharges in the evening at 80 per MWh. Charging 10 MWh costs 200 and returns 8.5 MWh, which sells for 8.5 x 80 = 680. The gain is 680 - 200 = 480 per cycle. If the battery completes one cycle a day for 300 days, the income is 144,000 a year. If the price gap shrinks to 40, the gain per cycle falls to 140. These are illustrative numbers.

How to model it in Machinations

Use a Pool for the stored energy with a capacity limit, a Converter for charging and discharging that applies the efficiency loss, and Registers for price. Gates with conditions decide to charge when the price is low and to discharge when high. Make size and efficiency Levers, then Play and chart the stored level and profit.