What is the difference between long-term and short-term energy storage?
Short-term energy storage systems are designed to store and discharge energy quickly, often within seconds to hours. A common example is Battery Energy Storage System (BESS), who typically make a profit out of within-day or even within-hour price differences on the wholesale electricity markets (Day-Ahead or Intraday).
On the other hand, long-term energy storage is designed to hold energy for days, weeks, or even months. This type of storage is crucial for seasonal energy management, where excess energy generated during months of low demand needs to be stored for use during periods of high demand or during extended periods of low renewable production (these are commonly referred to as “Dunkelflaute”).
Natural gas storage is a typical example of long-term energy storage: natural gas may be injected into large underground reservoirs during the summer (when power and heating demand are low) and extracted during the winter (when power and heating demand are high).
The storage of green hydrogen is another example of long-term energy storage that is being considered as a possible option to decarbonize the energy sector: excess electricity production from intermittent renewable sources such as wind or solar could be used to power an electrolyzer to produce green hydrogen, which could be stored and later used as fuel to produce electricity when demand is high or renewable production is low, similarly to what is done with natural gas.
While short-term storage systems like BESS provide fast, flexible solutions to grid management, long-term storage options like gas and green hydrogen are key to ensuring energy security and stability over extended periods, particularly during seasonal shifts in renewable energy availability. Both are essential parts of a balanced energy system.
KYOS Software models and Advisory
KYOS’ expertise covers both short-term and long-term energy storage.
Our software model KyBattery supports market players with energy storage valuations, allowing to forecast revenue streams across multiple markets and products. The model uses advanced stochastics including Least Squares Monte Carlo techniques to capture the full flexibility of energy storage.
Our software model KyStore supports traders and portfolio managers in natural gas markets. The gas storage optimization software not only raises revenues from gas storage trading operations, but also provides accurate valuations and reduces risk with adequate hedge recommendations. The model uses advanced stochastics including Least Squares Monte Carlo techniques to capture the full optionality in gas storage facilities.
KYOS also advises owners and developers of green hydrogen projects with finding the optimal combination of green power and electrolysis and with assessing the income stream of the project.