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g_pepper comments on Stupid Questions May 2015 - Less Wrong Discussion
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If it were cheap enough, maybe, but at the moment the demand fluctuations are covered by power generating plants which come online in times of high demand (e.g. day) and shut off during low demand (e.g. night). Typically these plants burn natural gas.
Sufficiently cheap storage would be very useful, yes.
Actually, pumped storage hydro is used for the purposes than DanArmak describes; see my post elsewhere in this thread.