Can compressed air energy storage solve the long-duration dilemma?

China just brought online the first large-scale CAES system in decades. (Courtesy: SSS Clutch)

Contributed by Archie Robb

About 40 years ago, compressed air energy storage (CAES) was viewed as a technology with high potential. Some saw it as the energy storage medium of the future. Only two plants were ever built – one in Germany in 1979 and another in Alabama in 1991 – and none in the following thirty years. It seemed that interest in CAES had died.

How suddenly things change. A study by Global Industry Analysts, “Compressed Air Energy Storage – Global Market Trajectory & Analytics”, predicts that the global CAES market will be worth $10.3 billion by 2026. While that number may be optimistic, there is substance behind it. China, for example, just brought online a 100 MW CAES system variant in the city of Zhangjiakou in northern China.

This CAES revival is driven by a need to solve the problem of long-duration energy storage. States like California with high amounts of wind and solar on the grid urgently need a way to store excess renewable energy.

“Long duration energy storage (LDES) technologies are making significant contributions to ensure the reliability of California’s electric grid,” said Julia Souder, Executive Director, Long Duration Energy Storage Council. “It is imperative that California create strong investment signals and devise regulatory frameworks for innovative technologies like LDES to continue to expand clean energy markets and move us toward a net-zero future.”

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Energy storage conundrum

Compressed air energy storage uses compressed air to store energy to be used later during peak demand hours. The surge in the use of renewable energy has generated interest in all manner of energy storage technologies. Chief among them is batteries, which have recently received an enormous amount of funding and economic incentives. Yet batteries provide only a few hours of storage. They are a good short-term source of backup power.

But what about long-term storage? It is vitally needed to fully capitalize on renewable generation. Wind generally blows strongest during the night and in the early morning. It tends to be available mainly at off-peak times. The sun is more regular. The daylight hours can be predicted with more confidence. Solar provides plenty of power during the day but drops off as the afternoon progresses. Wind and solar often produce more power at certain times than can be consumed by the grid. A means of storing this excess energy is needed so it can be used when wind or solar energy may not be available.

Power producers are building battery energy storage systems in record numbers to harness excess renewable energy and use it during peak hours, but these are not long-duration systems. Similarly, money is being spent on electrolyzer technology that converts excess renewable energy into hydrogen to be stored for later use for power generation as a way to replace or augment natural gas.  These are laudable efforts, but they fail to address the problem of long-duration storage. CAES is being increasingly viewed as a viable and cost-efficient way to address the storage challenge.

The case for CAES

Two CAES projects have been running efficiently for decades in Huntorf, Germany (320 MW) and McIntosh, Alabama (110 MW). These installations use off-peak power to run compressors that inject air into an underground storage chamber such as a salt cavern. During hours of high electric demand, compressed air is withdrawn from the cavern, preheated, and introduced to combustors where natural gas is fired to further heat the air. Hot expanding gases drive expansion turbines that are connected to a generator and produce electricity for the grid. The fuel rate is considerably better than that of a modern combined cycle power plant. The system produces more energy than is needed to compress the air.

The McIntosh plant in Alabama was commissioned in 1991.  It is owned by utility Power South. It comprises a single machinery train with two Dresser Rand (now Siemens Energy) compressors and expanders, a motor/generator, and a huge salt cavern. It takes about 40 hours to recharge the cavern with compressed air, after which the generator can provide power at full capacity for about 25 hours. The unit performs emergency starts in nine minutes and the plant runs all year round. It provides peaking power when needed and otherwise helps control the grid in fall and spring or provides backup power based on market conditions. Fuel costs, electricity prices, and grid conditions determine how it is operated.

The machinery train consists of low-pressure (LP), intermediate-pressure (IP), and high-pressure (HP) compressors, LP and HP turbo-expanders, and self-synchronizing clutches manufactured by SSS Clutch. It is the engagement or disengagement of the clutches that controls whether the motor/generator is used to drive the compressor or generate grid power.

After 30 years of operation, Power South is now engaged in maintenance work to repair/refurbish and upgrade its turbo-expanders and other components.

“After many years of trouble-free service at the McIntosh CAES plant, it is offline for some repairs and upgrades,” said Morgan Hendry, CEO of SSS Clutch. 

As part of the outage, Power South asked his company to remove and inspect the size 220T compressor clutch that had been operating for three decades. It underwent a detailed inspection and testing at the SSS Clutch headquarters in New Castle, Delaware. This was the first such inspection since it was originally commissioned.

“The clutch was found to be in good condition after nearly 30 years of service, a testament to the care the plant has given to its equipment and maintenance best practices,” said Hendry.

CAES interest surges

The fact that the Power South plant is putting more money into its CAES plant may be related to the fact that interest in CAES is surging as the problem of long-duration storage comes into sharper focus. Countries such as the U.S., China, Japan, Canada, Australia, Germany, and other parts of Europe have announced projects in recent years.

The good news is that there are many suitable storage locations for CAES throughout much of the world. According to the EPRI, about 85% of the U.S. has geologic sites that could work for CAES. Northern Europe, too, has plenty of potential sites, some of which are already used for natural gas storage. 

Some of the projects being considered are traditional CAES. Others are hybrid examples that add elements to CAES. Here are a few of the highlights: 

The Bethel Energy Center is a fully permitted 324 MW (16,000 MWh) CAES facility destined for Anderson County, within the Texas ERCOT market. It will use electric motor-driven compressors to compress the air, and natural gas-based turboexpanders to generate power. The advantage is that it will be able to provide the same volume of fast-start ancillary services as a 2,000 MW combined cycle plant while reducing emissions by about 90%.

Canadian company Hydrostor is well advanced along the approval/permitting pipeline to build a CAES facility in Rosamond, California. The Willow Rock Energy Storage Center (formerly Gem Energy Storage Center) will provide 500 MW (4,000 MWh) of power. Construction is scheduled to begin in a year or so.

“Willow Rock will be capable of eliminating the equivalent of roughly 120,000 cars off the road every year over its 50+ year project life,” said Curtis Van Walleghem, Hydrostor’s Chief Executive Officer. 

It works a little differently than the Power South site. The compressed air is stored in pods that sit in a 2,000-foot cavern. Air is retained at pressure by displacing water in these pods, which are held in a spill pond on the surface. To generate power, air is released from the cavern, heated in hot water tanks, and used to power turbines. A similar project is under development by Hydrostor in New South Wales, Australia. – the 200 MW 1,500 (MWh) Silver City Energy Storage Centre. 

Liquid air energy storage (LAES) is a variation on CAES using liquid air rather than compressed air. Highview Power, for example, is developing up to 2 GWh of long-duration LAES across Spain. Up to seven of Highview’s “CRYOBatteries” use liquid air as the storage medium. Off-peak power is harnessed to produce liquid air. Two small-scale versions are already operating in the UK.  

Just In Time Energy, meanwhile, offers an Optimized LAES process that is said to provide increased power from a given amount of liquid air and better project economics. The company has also developed a combined gas and electric storage system that replaces liquid air with liquefied natural gas (LNG). The LNG is produced at off-peak times using excess renewable power and returned to the pipeline systems concurrently with power delivered to the grid

And the newly online Chinese 100 MW system is said to use supercritical thermal storage to boost system efficiency instead of natural gas. It can store up to 400 MWh at 70% efficiency.

Over the last two decades, a number of other CAES projects have been proposed and later abandoned. Lack of funding was part of the reason. These include the Norton CAES facility in Ohio, another in Iowa, one in County Antrim, Northern Ireland, the Seneca CAES Project in New York state, the Adele project in Germany, and a PG&E CAES facility planned for San Joaquin County, California. It is possible that interest in some of these projects may soon revive.

Incentives and funding

Part of the reason for the renewed interest in traditional and hybrid CAES is better funding potential. The Inflation Reduction Act of 2022 provides a tax credit of up to 30% that broadly applies to energy storage technologies. Coupled with the low levelized cost of energy (LCOE) of CAES, funding possibilities have grown in recent times.

The last comprehensive comparison of LCOE that included CAES was done by consulting firm Lazard in 2016.

Battery storage prices have declined since then. But the latest cost projections from NREL still place lithium-ion battery storage at around $300. And issues have emerged about the availability and energy security of lithium.

Lazard appears to have changed the way it calculates LCOE and now calls it LCOS (for storage). It doesn’t include a comparison with CAES. But Lazard noted in its late 2021 report:

“Interest in longer-duration technologies continues to grow in tandem with expectations of ever greater penetration of renewable energy generation.”  

The CAES market, then, is certainly more vibrant than it has been for decades. But it remains to be seen whether we will indeed see a CAES or hybrid CAES renaissance in the coming years.

Author: Archie Robb is a writer from Southern California specializing in business and energy.

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