I've heard that desalination of seawater is not a practical solution to drought because it's too energy-intensive. Does this change when energy temporarily costs less than $0/unit?
It's also very capital-intensive. Ideally you would want a useful energy-intensive process with low capital costs so coming online during these peaks but staying idle for the other 80% of the day has minimal impacts.
I wonder if hydrogen generation would be more along the lines of what you're thinking. Hydrogen is an energy store not an energy source -- it takes more energy to produce hydrogen than you get out. But that just means it's a type of battery. It seems conceptually simple to produce... if a plant can be made simple enough (low enough capital costs that the idle time matters less), I wonder if hydrogen generation/burning has been studied as grid-level storage to do this kind of time-of-day energy arbitrage.
(With the amount of interest in grid-level storage and by the law of markets-are-efficient, presumably someone has run the numbers...)
Southern California, for example, dumps most of it's rain water into the ocean. I'd bet that capturing some of that would be much cheaper in the long run.
it's not hard to come up with some creative solutions... How about a giant bag or huge tanks out in the ocean for holding the water, instead of building dams. Or injection wells to replenish the water tables during the rainy season, pumping it out during the rest of the year.
It just seems weird that millions of gallons of fresh water gets dumped into the ocean, and nothing is done to capture even some of that water.