Elevated water storage is used as a ‘battery’ of sorts. During periods of low water demand (think when most people in your town or city are fast asleep), there is excess pressure and water in the system, thus allowing the tank to fill. This excess water and pressure are useful for periods of high demand (morning or evening when many people are showering or cooking before or after work).
It essentially provides a buffer so we don’t have to crank the distribution system up to 10 during high demand periods and turn it down to 1 for low demand periods. We can instead run it at a steady 5 all the time. Then we are also prepared for unusually high demands (say a fire at 2 AM).
A ton of engineering goes into the design of water distribution systems….and everything above is not 100% literal, but it’ll give you the main idea.
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