Analysts see a strong, upcoming demand for energy storage as part of the grid. This will likely be a combination of some kind of central storage (for example, a 20MW flywheel installation near a power generation station) and distributed storage (for example, batteries or supercapacitors next to the familiar green transformers in people's yards).
These types of energy storage are primarily driven by a need on the part of utilities for load balancing, since it's expensive for them to constantly adjust the output of traditional power generation systems as the load varies. Energy storage may even allow them to offset or delay the requirement of additional power plants, such as a gas-fired "peaker" plants.
In some markets, there may also be value for companies and people on the "other side of the meter" to buy and store power when it is least expensive and use the stored power during peak demand when prices are highest. Called "time shifting," this is an interesting concept, although it may be a bit ahead of its time. Jaime Smith of SunEdison, who runs the installer/developer's North American PV commercial operations, said "as far as taking a solar curve and shifting it and it being worth the value of that shift for the cost of the storage, we have not seen that yet. We're keeping our eyes and ears open for the right technology but we haven't seen anything yet that is cost-effective."
To a lesser extent, the need for energy storage will also be driven by the inherently intermittent nature of many renewable energy sources, such as solar power and wind. As more of this kind of power generation comes online, it makes sense to store the energy for times when the wind isn't blowing or the sun isn't shining.
Proponents of solar power, however, like to point out that although PV is intermittent (due to clouds and of course darkness), it's actually highly predictable. Clouds don't cause that much variability if the PV is spread out over a wide enough area. And because clouds are visible, it's relatively straightforward to predict the impact on power generation on a short-term basis and even easier to predict the amount of power that will be generated the next day based on weather reports.
That's fine because power markets operate on a day-to-day basis. Dan Shugar, CEO of Solaria, a supplier of PV modules, said "In PG&E's territory alone, which is pretty much north of L.A. up to Oregon, there's about 30,000 solar plants. If you look at a 10 x 10 mile area, statistically there's no variability."
Also, depending on location, peak demand is often in near-perfect sync with PV-generated power, since it's the heat of the sun that creates the need for air conditioners, which are the primary source of demand.
