Storage changes everything. That's the anthem we hear more often in the electric industry today as we face an evolving energy policy and a variety of new and emerging technologies.

Electricity is the only commodity that has to be delivered at the same moment in time that it is produced. Storage has the ability to change everything as we know it today because of its potential impact on the grid in optimizing asset utilization, providing new load-frequency control options, enabling smart grid concepts and, perhaps the greatest emphasis right now, supporting renewable energy sources.

If you like wind and solar, you have to love storage.

With more wind and solar facilities seeking to connect to the grid and with state renewable portfolio standards demanding more renewable energy sources, grid operators must urgently address the variability of renewable resources.

The fact that the wind doesn't always blow and the sun doesn't always shine — solar photovoltaic on a partly cloudy day has huge swings and the peak of wind power tends to coincide with the valley of demand — creates a dimension of complexity when balancing load and supply. Wind farms operate at between 25% and 40% annual capacity factors with significantly lower values during peak periods. How the industry deals with this reality as larger amounts of solar and wind are integrated into the grid remains to be seen.

It's not a one-size-fits-all proposition — maybe it's “silver buckshot.” Each storage technology has some inherent benefits as well as limitations that make it efficient or economical for specific applications. For example, across the United States, we have over 22,000 MW of pumped storage and over 5,500 MW in PJM. This is the most mature large-scale storage technology. However, the length of time to site and build a pumped-hydro facility and the necessary topography and geology, among other factors, limit both the expansion and immediacy of this resource, which means we need to look to a variety of storage technologies. The industry is watching the compressed air energy storage (CAES) projects under way, too, for there may be great potential in this technology. The new reserves of shale natural gas and the possibility of large-scale projects make CAES a promising resource.

Batteries, plug-in hybrid electric vehicles (PHEVs) and flywheel technology are relatively new and are being demonstrated to provide options for shorter time frame balancing needs, such as for frequency regulation. Vehicle-to-grid technology allows PHEVs to charge from the grid at night — when wind resources are abundant — and can allow their batteries to respond to the grid's regulation service signals when they are plugged in. With large numbers of such vehicles plugged in, they could serve as an enabler of the intermittent renewable resources on the grid.

PJM Interconnection, the grid operator for 13 states and the District of Columbia, sees firsthand the power of energy storage through several pilot programs with our members. For two years, PJM has housed a 1-MW lithium-ion battery, owned by AES Energy Services LLC, on our campus, linking directly into the grid to provide regulation service in response to signals from the PJM control center. The facility can help quickly balance variations in load to regulate frequency as an alternative to adjusting the output of fossil-fuel generators; it is capable of changing its output in 50 msec.

However, one need not go further than the hot water heater at home to see real energy storage at work. Storing hot water to be used when needed makes this also a prime appliance to be tied into smart grid controls that can signal optimum times to heat the water. PJM now has a fully functioning advanced technology pilot under way in one of our buildings that demonstrates how thermal storage can participate as demand response in PJM's energy and regulation markets. An oversized 105-gallon (397-liter) electric water heater — with 26 kWh of storage — shows the potential to minimize the cost of operation by responding to the PJM wholesale energy price signal and shows revenue potential by responding to the PJM frequency regulation signal.

In the PJM market, many other innovative storage concepts are being tested, including some unconventional solutions involving electric school busses, the integration of batteries with wind and solar, and the capture of electricity generated from braking commuter trains for storage in rail-side battery arrays to be reused when the train accelerates out of the station. In areas where competitive markets exist, we have increased opportunities for demonstration, experimentation and monetization of storage.

Through innovation and technology breakthroughs, it will take a mix of solutions to move the needle on renewable energy penetration. And the pursuit of storage technology is leading the way.

Terry Boston ( is CEO of PJM. He wrote his graduate thesis on the optimization of Raccoon Mountain Pumped Storage, a 1,532-MW plant belonging to TVA.