When buildings act like batteries
As electricity systems rely more heavily on less predictable sources of renewable energy, managing when energy is used has become increasingly important. One emerging idea is that buildings themselves could help balance the system, acting as low-cost energy storage assets without the need to install new physical batteries.
The challenge:
Electricity supply and demand must be balanced at all times, but renewable energy sources such as wind and solar can be unpredictable. This makes energy storage — the ability to absorb electricity when it is plentiful and release it when it is scarce — increasingly valuable.
Most discussions focus on physical batteries, which are expensive to install and degrade over time. Yet buildings already have thermal inertia — meaning they naturally retain heat or coolness for a period of time. This allows heating or air conditioning to operate earlier or later without affecting occupants’ comfort. The challenge is whether this built-in flexibility can be used not only to save costs but also as a tradeable product in electricity markets.
The research:
The researchers model a typical high-rise building in London using advanced simulation software that replicates how a real building responds to weather, occupancy, and heating and cooling systems. They test whether an energy aggregator — a company that bundles together many small energy users to trade in electricity markets — could treat the building like a virtual battery.
By slightly adjusting heating or cooling in advance (for example, warming a building before electricity prices rise), the building can reduce energy use during peak-price periods. The study evaluates two ways this could generate value:
• Wholesale price arbitrage, where electricity is effectively bought when prices are low and avoided when prices are high
• Flexibility or reserve services, where buildings are paid in advance to stand ready to reduce demand if the local electricity network needs support
The results show that both approaches are technically feasible and commercially viable.
As electricity systems rely more heavily on less predictable sources of renewable energy, managing when energy is used has become increasingly important. One emerging idea is that buildings themselves could help balance the system, acting as low-cost energy storage assets without the need to install new physical batteries.
The challenge:
Electricity supply and demand must be balanced at all times, but renewable energy sources such as wind and solar can be unpredictable. This makes energy storage — the ability to absorb electricity when it is plentiful and release it when it is scarce — increasingly valuable.
Most discussions focus on physical batteries, which are expensive to install and degrade over time. Yet buildings already have thermal inertia — meaning they naturally retain heat or coolness for a period of time. This allows heating or air conditioning to operate earlier or later without affecting occupants’ comfort. The challenge is whether this built-in flexibility can be used not only to save costs but also as a tradeable product in electricity markets.
The research:
The researchers model a typical high-rise building in London using advanced simulation software that replicates how a real building responds to weather, occupancy, and heating and cooling systems. They test whether an energy aggregator — a company that bundles together many small energy users to trade in electricity markets — could treat the building like a virtual battery.
By slightly adjusting heating or cooling in advance (for example, warming a building before electricity prices rise), the building can reduce energy use during peak-price periods. The study evaluates two ways this could generate value:
• Wholesale price arbitrage, where electricity is effectively bought when prices are low and avoided when prices are high
• Flexibility or reserve services, where buildings are paid in advance to stand ready to reduce demand if the local electricity network needs support
The results show that both approaches are technically feasible and commercially viable.
The impact:
The research shows that buildings can serve as low-cost energy storage — providing flexibility without the capital costs, efficiency losses, or wear-and-tear associated with physical batteries. For energy companies, property owners, and policymakers, this shifts the role of buildings from passive energy users to active participants in electricity markets.
With smart controls and market access, existing buildings could help stabilise electricity systems, support renewable energy integration, and reduce the overall cost of the energy transition.