What’s in Store for Electricity?

I came across a recent article about the price of electricity and the costs associated with stowing renewable energy and it got me wondering: will storage turn electricity pricing into a nightmare? 

Before getting to the crux of the issue, let’s first try to understand why we need to store electricity. 




The bulk of the electricity today is generated from coal and natural gas in their various forms and nuclear fusions. Heavy-duty plants ensure reliable production. 


Electricity’s core components are generated from renewable sources, such as sun, wind, rain, and tides. And one of the main characteristics of renewable energy is its dependency on external elements. For example, there is no sun at night, less in winter, winds can be too weak or too strong, rain can be random or absent. In other words, renewable energy production is not linear throughout the day and difficult to forecast beyond two weeks due to so many natural variables. 


Renewable energy complements more and more legacy means of production, but mostly during the day when there is more sun. This is when we run into issues: traditional (and usually heavy-duty) electricity production is not flexible enough and wasn’t designed as a stop-start system. You can’t turn a coal plant on and off as the day goes by and depending on near-immediate demand fluctuation. 


As a consequence, renewable energy can only represent a bigger part of the energy we produce and consume once we’re able to store electricity on a large scale and at a reasonable cost. We will get there at some point but it’ll be an incremental journey. 




When we do reach that stage, the price of electricity – regardless of how it’s been generated – will need to be adapted to incorporate storage costs. This will be a turning point because modelling electricity storage pricing is tricky and depends on some important factors: 


  • The storage technology used: we should assume there’ll be a few: thermal storage, pumped hydro, lithium-ion, sodium-ion, flywheel, lead acids, capacitors etc 
  • The performance of the storage technology: efficiency losses of charges and discharges, reliability, output, running cost, system lifetime 
  • The pricing model itself: for instance, atemporal models, perfect and imperfect information models, strategic operations models. 


From operators to utilities and large-scale consumers, a wide range of companies are in the business of electricity trading. Success requires managing large amounts of data, having systems that can embark various bootstrapping and pricing mechanisms and to have risk management solutions that offer the breadth, the openness and the flexibility only few specialized vendors can provide today. 


CTRMCloud is one of them. 


You may also like ….
Delivery Risk. Are We Ready?

Delivery Risk. Are We Ready?

The above picture is not of the Spanish Armada ready to invade. This is a picture of the southern California coast, lined with record breaking ships waiting to dock and unload. Per reports, this is the fourth time in three weeks the record has been broken. It...

California’s State of Total Recall

California’s State of Total Recall

By the time you are reading this, my home state may have a new governor. On Tuesday, September 14th, California will hold a special election, which could have been called Total Recall because it will determine whether governor Gavin Newsom will be recalled.     ...



A recent visit to an optometrist reminded me that if there’s one thing that doesn’t change, it is change itself. My optometrist happily told me that there is a new design of hard contact lenses that covers more of the eye’s surface, not just the pupil, prolonging wear...

Subscribe To Our Monthly Newsletter

Join our mailing list to receive the latest news and updates from our team.

You Have Successfully Subscribed!