Energy storage systems operating within an electrical energy time-shift application are charged with inexpensive electrical energy and discharged when prices for electricity are high. On a shorter timescale, energy storage systems can provide a similar time-shift duty by storing excess energy production from, for example, renewable energy sources with a variable energy production, as this might otherwise be curtailed. If the difference in energy prices is the main driver and energy is stored to compensate for (for example) diurnal energy consumption patterns, this application is often referred to as arbitrage.
Storing energy (i.e. in charge mode) at moments of peak power to prevent curtailment or overload is a form of peak shaving. Peak shaving can be applied for peak generation and also – in discharge mode – for peak demand (e.g. in cases of imminent overload). Peak shaving implicates that the energy charged or discharged is discharged or recharged, respectively, at a later stage. Therefore, peak shaving is a form of the energy time-shift application.
An energy storage system used for energy time-shift could be located at or near the energy generation site or in other parts of the grid, including at or near loads. When the energy storage system used for time-shift is located at or near loads, the low-value charging power is transmitted during off-peak times.
Important for an energy storage system operating in this application are the variable operating costs (non-energy related), the storage round-trip efficiency and the storage performance decline as it is being used (i.e. ageing effects).