During moments of peak demand, it may occur that the available transmission lines do not provide enough capacity to deliver the least-cost energy to some or all of the connected loads. This transmission congestion may increase the energy cost.
Energy storage systems at strategic positions within the electricity grid help to avoid congestion related costs and charges. The energy storage system can be charged when there is no congestion and discharged when congestion occurs. Energy storage can, in this way, additionally delay and sometimes avoid the need to upgrade a transmission or distribution system.