Map of the North American electricity interconnections. Image is from  

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... the United States, the electrical power grid is divided into three primary regions: the Western Interconnection, the Eastern Interconnection, and the Texas Interconnection (see Figure 1). Each of these regions struggles with peak power issues, but this case study will focus on the Texas Interconnection, which is operated by the Electricity Reliability Council of Texas (ERCOT). Electricity demand fluctuates throughout the day. During the summer months in ERCOT, peak demand (sometimes just called “the peak”) occurs during the late afternoon or early evening (see Figure 2). One of the primary drivers of the peak is air conditioning, both from residential and commercial buildings. The electrical grid has to be built to meet the peak demand. For ERCOT in 2012, that means that they needed more than 65 GW (gigawatts) of capacity. However, for most of the year, much of this capacity sits idle. For example, during a mild day in March, the peak may only reach 35 GW, meaning that more than 30 GW of generat- ing capacity is sitting unused that day. Even on peak days (like in Figure 2) there are several hours with significant untapped capacity. This leads to low capital utilization and increases the overall cost of electricity. Also, because peak power plants are only used during peak times, they tend to be single-cycle gas turbines which have lower capital costs, but also lower efficiency and higher emissions than their combined-cycle counterparts. Combined-cycle power plants utilize the waste heat from the gas turbine to produce additional electricity. Peak power creates disparity in the electricity prices throughout the day. In ERCOT, electricity is bought and sold in the wholesale market. For example, the utility that supplies electricity to homes to Austin may either produce that power themselves or pur- chase that power from another generator in the ERCOT market. At the same time, the local utility has the option of producing extra power and selling it in the ERCOT market. There are a variety of methods for buying and selling power in ERCOT, including real- time markets (electricity is purchased at the time of use), day-ahead markets (electricity is purchased the day before it is used), and nego- tiated contracts (the parties involved set the individual terms of the contract). Prices are specified at five-minute intervals in the real- time market and at one-hour intervals in the day-ahead market. In both markets, however, the price of the electricity corresponds to the scarcity of electricity during that time. For example, during the morning when demand is lowest, the most efficient, cheapest power plants are operating. As demand increases throughout the day, less-efficient and more expensive plants are brought online, increasing the market electricity prices. This is shown in Figure 3, which corresponds to the same day as Figure 2. Because of these fluctuations in prices during the day, the ability to have flexibility in when electricity is consumed can be very valuable. In this case study we consider adding that flexibility through the use of thermal energy storage. Thermal energy storage (TES) is the storage of thermal energy in some medium. The energy can be stored as latent heat, sensible heat, or chemical heat, though latent and sensible heat are the most common. Latent heat is the heat released or absorbed by a body during a constant temperature process, such as a phase change (e.g., boiling water). Sensible heat refers to heat transfer that results in a temperature change, but no phase change occurs (e.g., heating up a piece of metal). Chemical heat is heat stored in chemical bonds, such as H 2 , which can be reacted to release heat. In warmer climates such as in the ERCOT region, TES is of- ten used for storing “cooling” in the form of chilled water or ice. For example, the University of Texas at Austin recently installed a four 3 million gallon (15,140 m ) chilled water TES tank. This insulated tank is used to store cold water when the cooling and power demands are low (e.g., at night time), and then the water can be dis- charged in the afternoon when the cooling and power demands are high. Without the TES, the campus buildings are cooled directly by the electric chillers, resulting in chilled water being used at the same time it is made. When using the water in the TES to provide cooling, the electric chillers can be turned down or off, thus reducing the electricity required by the campus while the TES is discharging. Though not as versatile as battery storage (because TES can only meet thermal loads), TES is much cheaper with costs ranging from $6-43/kWh [1] – [4]. Battery costs range from $74-1484/kWh [5]. For more information on TES see [6], [7]. Thermal storage provides an opportunity to shift one of the largest electricity loads (air conditioning) from the expensive afternoon peak to the cheaper nighttime hours. It also provides an opportunity for the air conditioning equipment to operate more efficiently. The efficiency of large chillers, which make the chilled water for cooling the air in buildings, is a function of the amount of cooling energy (cooling load) provided by the chillers and the temperature of the outdoor air. TES gives the chillers more flexibility to operate in the regions where they are most efficient (cooler outdoor temperatures with moderate to high cooling loads). The thermal storage considered in this problem is chilled water thermal storage using a single stratified water tank. This type of TES tank takes advantage of the fact that colder water is more dense that warmer water. When cold water is needed it is removed from the bottom of the tank and sent to a heat source, such as a building, to provide cooling (see Figure 4). The warmer water is returned to the top of the tank using carefully designed diffusers that ensure the flow is not turbulent. The difference in density keeps the warm water on top from mixing with the cold water on the bottom. This also causes the tank to only have two temperatures — the warm water temperature and the cold water temperature. To recharge the tank, warm water is taken from the top, cooled in the heat sink (i.e., the chillers), and returned to the bottom of the tank. The advantage of the stratified chilled water tank is that capital costs are reduced because only a single tank is required to store both the hot and the cold fluids. Two variations of a single system are analyzed in this study. The first is a traditional chiller/cooling tower configuration (see Figure 5a) that does not have TES. This provides a base case scenario for comparing the benefits of TES. The second is identical to the first except that it has a chilled-water TES unit running in parallel with the chillers that supplies cold water to the buildings during peak hours (see Figure 5b). The TES is recharged by the chillers during off-peak hours. Although Figure 5 only shows one chiller, each chiller system has two identical chillers connected in ...