**3. Application of energy storage technologies**

Energy storage offers a variety of useful services and cost benefits to electrical systems, and companies are adopting storage technology for a variety of reasons. Largescale energy storage also allows today's electrical systems to operate more efficiently. This efficiency gain means lower costs, less pollution, and more stable power.

Traditional energy sources such as coal and natural gas power plants must be cycled on and off in response to changing demand and rarely operate at peak efficiency. Not only does this make energy more expensive but it also creates more pollution than is necessary to meet our energy needs. In addition, due to long start-up times, these large-scale power generation facilities cannot keep up with real-time demand spikes, which can lead to blackouts.

It is possible to use the technology for a variety of applications, ranging from offering ancillary services to grid operators to reducing end-user costs behind the meter. There are a diversity of uses for pumped hydropower, flywheels, and thermal storage systems; however, battery energy storage systems have seen the most use across a wide range of applications.

• Energy arbitrage

Using energy arbitrage, prices can be offset in markets characterized by significant variations in locational marginal prices (LMPs) over time. Low LMP levels are used to purchase and store wholesale electricity for resell when high LMP levels are reached.
