Storing Green Energy
Location: New York
Author: Ken Silverstein, EnergyBiz Insider, Editor-in-Chief
Date: Monday, September 15, 2008
By making a $20 million investment in energy storage, Public Service
Enterprise Group hopes to breathe new life into green energy. The New
Jersey-based utility has entered into a joint venture with a key inventor of
the technology. It will market the compressed air energy storage tools
needed to generate power when demand is highest.
Energy storage could advance the cause of wind and solar power, which are
often criticized as they are intermittent fuels. That would give utilities,
power marketers and large commercial or industrial customers the flexibility
of how they respond to shortages, price spikes or brownouts. Utilities, for
instance, must precisely measure their load generation with the demands of
their end users. Without adequate generation capacity, all wholesale buyers
of electricity would be subject to the whims of the market.
"We believe this technology is an important component of a broad effort to
combat climate change, an effort that must include increased conservation,
expanded renewable energy and new clean central power," says Stephen Byrd,
president and CEO of PSEG Energy Holdings.
Two major compressed air energy storage plants exist worldwide: an Alabama
plant, which was built in 1991 and which is 110 megawatts and a German
facility, which was constructed in the late 1970s and which is 290
megawatts. Over the next 5-10 years, experts say that the technology has the
potential to get a firm foothold in the market.
Palo Alto, Calif.-based EPRI has estimated that more than 75 percent of the
U.S. has geological characteristics that will accommodate underground
compressed air energy storage. Those reservoirs will allow utilities to use
off-peak electricity to compress air and store it in airtight underground
caverns. In urban areas where space is at a premium or where bedrock makes
deep drilling cost prohibitive, developers say that ground level pipelines
can be used instead.
When the air is released from storage, it is heated in combustors by natural
gas and sent through expanders to power a generator to create electricity.
Nearly two-thirds of the natural gas in a conventional power plant is
consumed by the natural gas turbine because the gas is used to drive the
machine's compressor. In contrast, a compressed-air storage plant uses
low-cost heated compressed air to produce off-peak electricity, conserving
some natural gas.
In the case of PSEG, it has formed a joint venture with Michael Nakhamkin,
who created the compressed air site in Alabama that can fill a cavern with
enough energy to generate 110 megawatts for 26 hours. The venture, called
Energy Storage & Power, would try to extend those benefits to other power
providers by using standardized parts.
"The technology has evolved to the point where it can be critical to helping
this nation meet its growing energy needs while helping decrease carbon
emissions from the electricity sector," says Nakhamkin.
Strong Fundamentals
To be sure, compressed air energy storage has its pitfalls. 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 storage can be pricey, which might make some prospective
projects infeasible. But with gas prices estimated to be as high as $14 per
million BTU, an investment in underground storage could pay for itself over
time.
Costs could also be defrayed if compressed air energy storage replaced
expensive "peaking" units that provide power during the hottest summer days
or the coldest winter nights. Air is stored in the form of compressed air
energy during off peak hours and then released during the periods of highest
demand, which will also lower the prices that consumers pay for power. At
the same time, compressed air energy storage units can reduce the stress on
base load plants that would otherwise have to ramp up and down.
The Iowa Association of Municipal Utilities believes in the cause. It has
selected a reservoir near Des Moines to build a 300-megawatt plant that is
comprised of a 100 megawatt wind farm and a 200 megawatt compressed air
energy storage facility. Most distributors will continue to use coal-fired
steam generating power plants to serve their "base-load" needs but will use
energy from the new facility to meet intermediate needs. It is anticipated
this electricity will be available to utilities and their customers in 2011.
"We see strong market potential for compressed air energy storage in the
traditional power industry as well as for the growing renewable energy
industry," says Roy Daniel, chief executive of the PSEG-led venture, Energy
Storage & Power. "Energy storage is the missing piece of the puzzle for a
green, affordable and reliable electric grid for the 21st century."
If the technology becomes cost effective and wins wider market acceptance,
it would cause the energy paradigm to shift. By storing wind and solar
energy and discharging the air when it is needed, suppliers could reduce
their need for fossil fuels and give utilities a powerful tool in their
quest to meet their expected future energy needs.
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