It is becoming more common for unpredictable power sources to be used to generate electricity, such as wind turbines and solar panels. When wind turbines are connected to an electrical grid, even on windy days the turbines generate varying power levels; the arrival and departure time of the wind resource can vary from the forecast by hours. Similarly, solar panels generate power, even on sunny days, at varying power levels. When these types of power sources are connected to the electrical grid, existing expensive resources must be assigned to compensate, or shape, the large variations in power production from wind and solar resources. When the electrical load on the grid does not exceed the power generated by the variable power sources and other grid connected power sources, there is excess power being delivered to the grid. In such a case, power from the power sources needs to be reduced to balance the electrical demand unless the power can somehow be stored for later retrieval and use, such as when peak demand exceeds power being supplied to the grid by the power sources. Also, by storing energy for later retrieval, selected power sources (such as inefficient gas-fired generation plants) can be operated at a lower capacity as the stored energy can be used to supplement power from other, more efficient, power sources. The thermal storage in this system can be used to reduce consumption of electricity for heating and cooling at times of peak system demand.