COMPRESSED AIR ENERGY STORAGE

On nights and weekends, Compressed Air Energy Storage ("CAES") systems compresses air on the surface and then pumps the air underground to a cavern or former mine. There, it is stored as an energy source. During the day and at peak times, air is released and heated using a small amount of natural gas. The heated air flows through a turbine generator to produce electricity.

In conventional gas-turbine power generation, the air that drives the turbine is compressed and heated using natural gas. On the other hand, compressed air energy storage technology needs less gas to produce power during periods of peak demand because it uses air that has already been compressed and stored underground.

Two major compressed air energy storage plants exist worldwide: a CAES plant in Alabama, which is 11-years-old and rated at 110 megawatts, and a German facility that is 23-years-old and 290 MW. A new CAES plant is under development located near Cleveland and will be capable of generating 2,700 MW. Currently, manufacturers can create CAES machinery for facilities ranging from 5 to 350 MW. Palo Alto, Calif.-based EPRI has estimated that more than 85 percent of the U.S. has geological characteristics will accommodate underground compressed air energy storage. Studies have concluded that the technology is competitive with combustion turbines and combined-cycle units, even without attributing some of the uncommon benefits of energy storage.

Compressed air energy storage utilities can use off-peak electricity to compress air and store it in airtight underground caverns. When the air is released from the underground mine or cavern, the air expands through a combustion turbine to create electricity. Nearly two-thirds of the natural gas in a conventional power plant is consumed by a typical natural gas turbine because the gas is used to drive the machine's compressor. By comparison, a compressed-air storage plant uses low-cost heated compressed air to power the turbines and create off-peak electricity, conserving some natural gas.


Compressed air energy storage has a few disadvantages. The disadvantage is that energy is lost when it is “pumped” into the cavern and then re-extracted as compressed air. Some estimates say that it could be as high as 80 percent. That, in effect, means that the selling price must accommodate that shortcoming, which may drive up rates for consumers. Also, building underground storage can be expensive, which might make some prospective projects infeasible. But, with gas prices estimated to be in the $5-6 per million BTU range in the short to medium term, an investment in underground storage could pay for itself over time. Moreover, if the nation develops an energy policy that pushes renewable power sources, the idea may catch on. If that happens and a debate over the technology ensues, developers say that they can win approval from stakeholders. Because storage is used with renewable forms of power, capital costs can be more readily recouped. And furthermore, wind and solar energy, for example, can be stored whenever it is generated and then released on demand—helping to negate the argument that those power sources are intermittent and therefore unreliable.