The vast majority of the time, electricity supply is simply matched to demand by throttling flexible power plants up and down.
Aside from throttling load-following plants, the grid has a large reserve of standby generators available to increase supply. Utilities can also take many types of generators offline as needed to reduce supply. Demand is actually pretty straightforward to predict -- it follows regular patterns by time of day and day of week. So utilities are quite good at supply-matching when they are allowed to pick their own generation capacity mix.
Back when per-capita electricity consumption and population were both growing rapidly in the developed world, many people thought that the problem would always be struggling to build enough power plants to provide sufficient power at an economical price. Peak demand in mid-afternoon is particularly problematic because you don't want to build entire power plants just to run for a few hours a day in the hottest months of summer. The construction costs raise power rates across the board, just to provide capacity that's rarely needed. Electricity is cheapest when power plants can run non-stop -- it distributes the capital cost over more units of produced energy.
But now per-capita electricity use is dropping in the developed world, and population growth is slowing, and governments are encouraging massive construction of renewables. So the bigger issue today is over-supply. Why? Because it's not always easy to take power plants offline:
- Some types of generation capacity have economics that discourage going offline, like coal plants.
- Some are physically difficult to take offline (and then restart) like nuclear plants.
- Some electricity from non-utility sources is forced into the grid regardless of demand, like wind and solar power in many jurisdictions.
Storing electricity just isn't practical. First, it's physically difficult and every method we've invented takes up a ton of space. Second, all energy storage and over-supply management requires some degree of waste. You're always doing one of these three things:
- Losing energy in the conversion to and from a storage medium like pumped-storage hydroelectricity or battery banks, as well as all the energy and resources that went into building those storage systems
- Losing energy by just dumping it, such as venting excess nuclear plant heat or shunting excess electricity directly to ground
- Losing financial value by selling excess power at a loss and buying shortfall power at another loss (and even then, someone else's flexible generation capacity has to handle the variability) tranasms.nu