Thermal energy storage (TES) is not a new concept — ASHRAE established Technical Committee 6.9 (Thermal Storage) in 1981, and the first ASHRAE Design Guide for Cool Thermal Storage was published in 1993. But as electricity grids face growing peak demand from electrification and climate-driven cooling loads, TES is gaining renewed attention as a demand-response strategy. DOE's Technology Strategy Assessment notes that more than 50% of the electricity consumed in U.S. buildings powers thermal demands, making thermal storage one of the largest untapped flexibility resources on the grid (DOE).
How cool TES works
A cool TES system charges by running chillers during off-peak hours — typically overnight — to cool a storage medium. During peak hours, the stored cooling is discharged to meet building loads, allowing chillers to shut down or run at reduced capacity. DOE's Thermal Energy Storage Fact Sheet identifies two main approaches: chilled-water storage (sensible heat, using the heat capacity of water across a temperature difference) and ice storage (latent heat, using the phase change of water to ice) (DOE).
| Attribute | Chilled-Water TES | Ice TES |
|---|---|---|
| Storage type | Sensible heat | Latent heat (phase change) |
| Energy density | ~14 BTU/lb (14°F ΔT) | ~144 BTU/lb (latent) + sensible |
| Chiller COP during charge | Higher (standard chilled-water temps) | Lower (ice-making requires 22-25°F fluid) |
| Tank volume | Larger | Smaller (high energy density) |
| Installed cost | $100-200 per ton-hour | Higher per ton-hour (varies) |
| Distribution benefit | Standard supply-air temps | Lower supply-air temps reduce duct/pipe size |
The economics: demand charges and utility incentives
The primary economic driver for TES is demand charge avoidance. DOE reports that utility incentives for cool TES range from $200 to $1,000 per kilowatt of on-peak demand reduced. Chilled-water TES tanks typically cost $100-200 per ton-hour installed, or $0.97-1.95 per gallon based on a 14°F temperature difference. TES can also enable smaller, less expensive chillers and balance-of-plant equipment, potentially offsetting the storage tank cost in new construction (DOE).
Real-world results are compelling. A DOE-backed study by the International District Energy Association documented that Miami University's 1.65-million-gallon chilled-water TES tank reduces campus peak electric load by 2.1 MW during afternoon discharge. The University of Texas at Austin uses two TES tanks providing 22,000 tons of cooling for over 4.6 hours to load-level a campus electrical demand that swings from 40 MW to 65 MW on hot days. Princeton University operates a 40,000 ton-hour low-temperature-fluid TES tank that offsets steam-driven chillers and reduces emissions (DOE/IDEA).
Round-trip efficiency surprise.A DOE-backed study found that the annual net round-trip efficiency of chilled-water TES is very near to, or even above, 100% compared with the same cooling system without TES. How? Charging happens overnight when condenser water temperatures are lower, improving chiller COP. The study found charging/discharging and heat-gain losses of only 3-6%, offset by improved off-peak operating conditions. Sensible TES storage efficiencies range from 50-98% (DOE/IDEA).
ASHRAE design guidance
ASHRAE's updated Design Guide for Cool Thermal Storage, authored by Jason Glazer, P.E. (chair of the energy cost budget subcommittee for Standard 90.1), provides comprehensive design guidance including building energy modeling, utility tariff analysis, and system selection criteria. The guide covers both ice and chilled-water systems and is the primary reference for engineers evaluating TES for commercial buildings. Utilities recognize cool TES as a demand-response resource, and ASHRAE's guide helps designers quantify the economic case (ASHRAE).
DOE cost targets and the future
DOE's Long-Duration Storage Shot targets 90% cost reductions for technologies providing 10+ hours of storage, with a pathway to less than $0.05/kWh-thermal for building-scale TES. The DOE Energy Storage Handbook notes that sensible heat storage materials (rock, sand) cost as little as $0.10/kg, while latent heat materials range from $4-300/kg. DOE's CSP program targets $15/kWh for complete thermal storage systems — far below battery storage costs (DOE, DOE/Sandia).
When TES makes sense for your building
- High demand charges: Buildings paying $15-30+/kW monthly demand charges benefit most from peak shaving.
- Time-of-use rate spreads: Large differences between on-peak and off-peak energy charges improve payback.
- New construction or chiller replacement: TES can offset chiller capacity cost, improving overall project economics.
- Campus or district cooling: Large central plants benefit from load-leveling and equipment right-sizing.
- Grid decarbonization: Shifting cooling to overnight uses lower-carbon baseload power instead of peaker plants.
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Want to evaluate thermal energy storage for your building's cooling load? Request a consultation — we analyze your utility rate structure, load profile, and equipment to quantify the demand-charge savings and system payback.