Storing energy: compressed air, home batteries and the humble hot-water cylinder

Electricity has an awkward property: it has to be used the moment it is made. Every storage technology, from a salt cavern full of compressed air to a lithium battery bolted to a garage wall, is a way of cheating that rule. You put energy away when it is plentiful and cheap, and take it out when it is scarce and dear.

The old version of this site was fascinated by compressed air as a store of energy, mostly in cars. The car never arrived, but compressed air as grid storage is real and growing. Meanwhile, the most common energy store in a New Zealand home has been hiding in the hot-water cupboard all along.

Compressed air at grid scale

The idea behind compressed-air energy storage, usually shortened to CAES, is simple. When power is cheap, run big compressors and pump air into an underground cavern. When power is needed, let the air out through a turbine.

Two plants proved the idea decades ago. Huntorf in northern Germany opened in 1978 with a 290 MW output, storing air in salt caverns. McIntosh in Alabama followed in 1991 at 110 MW, able to run for about a day at full output. Both are what engineers call diabatic plants: the heat produced when air is compressed is thrown away, so gas has to be burned to warm the air again when it expands. That is why their round-trip efficiency is modest, with Huntorf usually quoted at around 42%.

The newer generation keeps the heat. Adiabatic designs store the heat of compression in tanks of hot water, rock or molten salt and return it to the air on the way out. Wikipedia's compressed-air energy storage article lists several large Chinese plants built since 2022, with stated efficiencies in the 60–70% range and storage measured in hundreds or thousands of megawatt-hours. A small commercial adiabatic plant has also run in Ontario, Canada, since 2019.

That is a useful lesson for anyone who followed the air-car story. The physics that made compressed air disappointing in a car (air gets very cold as it expands, and heat management decides the efficiency) is the same physics engineers have been working hard on at grid scale. A cavern doesn't care about weight, which is exactly where a car suffers.

Why compressed air lost the car but not the grid

Compressed air stores relatively little energy for its weight and volume. The Wikipedia article puts practical air bottles at roughly 40–100 kJ per kilogram, a small fraction of what a lithium-ion pack holds. A vehicle has to carry its store around; a cavern under a field does not. So compressed air makes sense where you have cheap, enormous volume and want long life, not where every kilogram counts.

Home batteries

At the household end, the storage most people picture is a lithium battery paired with rooftop solar. It soaks up surplus solar in the middle of the day and runs the house through the evening.

A home battery can make good sense where:

• the household is out during the day, so a lot of solar would otherwise be exported for a low buy-back rate;
• the retailer has a big gap between peak and off-peak prices;
• there is a need for backup during outages (only if the system is designed and wired to provide it, which not all are).

It makes less sense where daytime use is already high, or where the price gap is small. Batteries are still one of the more expensive parts of a home energy system, and their payback depends heavily on tariffs, which change. Like any part of a solar system, they need to be installed by a licensed electrical worker.

The cylinder you already own

Here is the part that tends to surprise people. Many New Zealand homes already have an energy store holding a good chunk of a day's energy: the electric hot-water cylinder.

Heating water is a large share of household energy use. Level, BRANZ's sustainable-building guide, puts water heating at 27% of energy use in an average New Zealand house. A cylinder holds that heat for hours with fairly small losses if it is well insulated. In other words, it is a thermal battery, and the electricity system has used it that way for decades.

Ripple control: the original demand response

Many electric cylinders in New Zealand are on a controlled circuit. Lines companies can switch them off for short periods, traditionally by sending a signal through the network known as ripple control, to shave peaks off demand on cold winter evenings. Because the water stays hot, most households never notice. In return, controlled tariffs are often cheaper.

Long before anyone talked about "smart grids", this was a large, distributed, flexible store of energy spread across a large share of the country's homes.

Making the cylinder work harder

There are a few practical ways to get more from a cylinder:

• Keep it on a controlled or off-peak tariff if your retailer offers one. Ask whether your cylinder is already on one.
• Insulate the cylinder and the first stretch of pipe. Older cylinders lose more heat; Gen Less has practical guidance on choosing and running a hot-water system.
• Time it to your solar. With rooftop solar, a diverter or timer can heat water from surplus generation in the middle of the day, which often costs less than a battery.
• Consider a heat-pump water heater at replacement time. It moves heat from the air into the water rather than making heat directly, so it uses much less electricity for the same hot water.

Any change to the wiring or controls of a cylinder is electrical work for a licensed electrician, and water must still be stored hot enough to control bacteria, which regulations set.

A footnote on air-powered lamps

In its later years the old site followed a plan for street lamps that would store wind and solar energy as compressed air. It is a neat illustration of the trade-off above: for something small and fixed, batteries became so cheap that compressed air could not compete on size or efficiency. Today solar street lights with small lithium or lithium-iron-phosphate batteries are common.

The takeaway

Storage is not one technology. At grid scale, caverns of compressed air, pumped hydro and big battery farms all have a place. In the home, a battery is a choice that depends on your tariff and how you use power. But the cheapest store of all is usually the one already in the cupboard. Before buying anything, check how your hot-water cylinder is controlled and insulated. It may be the best battery you own.