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PG&E Approved for $50 Million Compressed Air Energy Storage Project

By Amy Westervelt

Jan 31, 2010

Pacific Gas & Electric is stepping into high-risk energy experimenting with the government go-ahead to spend $50 million on the first phase of a compressed air energy storage demonstration project.

Compressed air energy storage is not exactly a new technology, but it has yet to be widely deployed because no one quite knows how it would work at a large scale.

The basic idea is this: Excess energy from a power plant or renewable energy source is used to run air compressors that pump air into either storage tanks or naturally occurring caverns underground, where it is stored under pressure. When electricity is needed, the air is expanded via gas turbines, generating energy.

It’s not a completely closed loop, however. Jim Gardner of Boise State University’s Office of Energy Research, Policy and Campus Sustainability notes that some additional energy (typically natural gas) is used during the expansion process to ensure that maximum energy is obtained from the compressed air. By some estimates, 1 kilowatt-hour worth of natural gas will be needed for every 3 kWh generated from a CAES system.

“As is the case with any energy conversion, certain losses are inevitable,” Gardner says. “Less energy eventually makes it to the grid if it passes through the CAES system than in a similar system without storage.”

In the best-case scenario, it’s a way to deal with the intermittency of renewable energy sources by storing excess energy for later use via a technology that is available today. The Electric Power Research Institute (EPRI) CAES the only energy storage option, apart from pumped hydro, that is available now and can store large amounts of energy and release it over long periods of time — both of which are necessary if you’re looking at energy storage for the electrical grid.

Still, if fossil fuels are necessary to make that happen, it sounds like the energy equivalent of robbing Peter to pay Paul.

In the worst-case, CAES a ticking time bomb that no one wants in their back yard. Compressed air energy storage faces similar obstacles to carbon sequestration in that finding a safe place to store high-pressure air isn’t exactly easy, despite the fact that, according to recent research by EPRI, 80 percent of U.S. land has geology suitable for underground storage.

Because of the risks involved, it can take several years to find, regulate and build a compressed air site, according to Annabelle Louie, who works in PG&E’s Emerging Clean Technology Policy department.

Nonetheless, PG&E has been talking excitedly about the potential of compressed air for about a year now. At a conference on in May, Louie announced to a crowd of journalists and energy policy experts that the Northern California utility was actively pursuing funding for a project because “even a project that is started today won’t be fully functional for several years.” She noted that there had been little private investment in compressed air energy storage.

According to Marianne Wu, a venture capitalist and partner at Mohr Davidow Ventures, who also spoke at the conference, it’s not just compressed air that hasn’t managed to attract a piece of the last couple years’ of major venture investment in cleantech.

“The energy market is still very immature, especially when compared to other areas of cleantech such as solar,” Wu said.

To date, only a handful of compressed air energy storage facilities have been built — in Germany, Alabama and Iowa.

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