2010: The Year of Compressed Air Energy Storage?

There are signs that 2010 could be the coming out party for Compressed Air Energy Storage (CAES). With the onslaught of large wind and solar deployments that will be added to the grid to meet state renewable portfolio standards requirements, there is a lot of buzz about the need for energy storage systems, particularly bulk energy storage. Bulk systems can store megawatt-scale amounts of energy produced during off peak times. They then discharge that energy during peak times, when prices are higher, and over many hours. With so much attention and investment paid to lithium ion batteries, it is easy to forget that advanced batteries are not true bulk storage technologies. However, CAES is.

Historically, CAES projects have faced an uphill climb in terms of site selection and permitting. However, there is now tangible evidence of market momentum and validation. CAES Development Company recently sold to FirstEnergy Generation the rights to the Norton (Ohio) Energy Storage Project, a site that will exceed 2 GW if all phases are complete. Pacific Gas and Electric is in the process of validating the design and performance of a 300 MW CAES project near Bakersfield, CA. New York State Electric and Gas (NYSEG) will be demonstrating a 150 MW CAES technology plant using an existing salt cavern in Watkins Glen, NY. There are also other small demonstrations from CAES technology providers that do not require natural gas to heat the compressed air and generate electricity.

For bulk energy storage there are three key dimensions to consider: capacity or rated power (measured in the hundreds of megawatts), discharge duration (measured in hours), and cost of energy (measured in $/kWh). CAES scores high on these dimensions and can cost as little as $60/kWh for larger systems, less than any other energy storage technology. A significant portion of U.S. geology has the bedded salt/salt dome geology that is most suitable for CAES and that geology’s overlap with large wind is significant. Also, CAES is a very flexible resource that can also provide shorter duration regulation services. The project finance nature of CAES makes the technology scalable.

Accordingly, Pike Research estimates that the CAES market will grow from 453 MW in 2010 to nearly 7 GW by 2020, which will cement the technology’s role in helping integrate renewables on the grid.

Article by David Link, appearing courtesy Matter Network.