the case for CAES

importance of Compressed Air Energy Storage

written by Jim Isherwood

energy transition

Global electricity generation is transitioning to an ever-greater contribution from variable renewable sources (VRE), such as wind and solar. As international grids adjust, the need for energy storage[1] becomes acute. When the wind does not blow, or sun does not shine, a disparity is created between power supply and demand, resulting in shortfalls of power and grid instability. Rather than using traditional fossil fuel based generating capacity as backup to VRE, energy storage is the means to manage that disparity, by shifting renewable energy production in time and also providing grid support services, such as reserve, reactive power, inertia and frequency response.

variable renewable energy and the UK contract for difference

At present much VRE in the UK is contracted for difference; the true cost of VRE is never really reflected or compared fairly with existing power generation. A 600MW wind farm is not the same as a 600MW Combined Cycle Gas Turbine (CCGT) facility; the wind farm is contracted for difference ahead of the CCGT but the dispatchable power is only around 20% in the UK (offshore wind is higher than onshore, however regardless the wind does not always blow as we would like) and a 600MW wind facility supplies on average 180MW on an annualised basis. The Levelized Cost of Energy (LCOE) is much higher than generally quoted and, what is more, the un-dispatchable portion has to be provided via alternative sources. Whilst the world needs more VRE, this is not the route to cheaper electricity and as a result we continue to see ever greater investment in wind because governments, regulators and the national grid are subsidising VRE, much as they have done for fossil fuels for decades. However, these economic arguments are somewhat irrelevant, it is has become generally accepted by most that we should burn fewer fossil fuels for energy, increase the contribution of VRE in power generation and decarbonise the wider economy, all as a matter of urgency. In the UK it is a matter of law, following the legal commitment to net-zero by 2050.

The contract for difference price offshore wind achieved in the second bid round is £57.50/MWh; however an additional ‘whole system’ cost of between £15 and £45/MWh needs to be added to these prices, with the range reflecting a flexible versus inflexible grid – in terms of stability.

Economics and subsidies aside there are real technical issues to solve if ever-greater levels of VRE are to supply the grid. Some of which really are major infrastructure issues, not least of which is the need for large-scale long duration energy storage. As the proportion of VRE increases the risk of grid instability also increases, a risk that was inherently mitigated by conventional fossil fuel power generation facilities.

Large-scale, long-duration energy storage is not new, pumped hydro storage has been around for decades and installations such as the Dinorwig and Ffestiniog Power Stations in Wales have provided back-up power during periods of excessive demand on the UK national grid. Today, circa 98% of worldwide energy storage capacity is pumped hydro. However, pumped hydro requires a suitable geography and the most suitable sites are already in use, leaving reduced potential for further growth.

As the proportion of renewable energy production on a grid increases so must energy storage capacity to balance supply and support grid stability. It is estimated by Carbon Tracker [2] that 0.25GW of storage for each GW of solar PV and wind generation capacity will be required once the penetration of renewables exceed 20% market share. This translates to:

  • / Global installed wind electricity generation capacity alone is forecasted to be at least 300GW by 2040; implying 75GW of storage will be required. Solar PV generation capacity is forecasted to be even greater.

Additionally, the UK government has identified that 128GWh of storage with 27.4GW of dispatch capacity will be needed by 2050 to support variable renewable deployment.

It is clear, the need for energy storage is significant and necessary if the forecasted growth in renewable electricity generation capacity is realised.

what is CAES?

Compressed air energy storage (CAES) is a large-scale, long-duration energy storage technology. The CAES process is straightforward: when there is excess VRE in the grid, it is used to run electric motor driven compressors to compress air and store it at pressure in underground caverns. When energy demand is high and VRE is unable meet that demand, the stored air is released back to the atmosphere via a turbine-generator providing power back to the grid. During this discharge operation, unless the air is heated, the turbine expansion will cool the air dramatically, leading to at first water condensation, then icing preventing operation. In basic diabatic CAES systems, this heating is typically provided by combusting natural gas, leading to CO2 emissions.

Advanced CAES (A-CAES) designs, such as those under development by Hydrostor Inc., store the heat of compression during charge and make use of it during discharge to avoid the need for combusting natural gas and the associated CO2 emissions. An A-CAES design approaches adiabatic performance, enhancing round trip efficiency[3].

what is the niche for CAES?

Though a significant portion of the global energy storage needs will be supplied by battery technology, CAES has a role to play. Battery technologies are suited to very fast acting but relatively low power output and storage durations whereas CAES is most suited to large-scale, long-duration energy storage. The chart below indicates the anticipated appropriate areas for various energy storage technology options, with CAES shown in red. Note the suggested area of applicability is expected to be larger if A-CAES facilities are considered.

CAES and in particular A-CAES technologies are expected to be in competition with pumped hydro, hydrogen and synthetic gas; with attributes that under the right circumstances make it a prudent choice. The following aspects are the key differentiators:

  • / Unlike pumped hydro, where suitable geography constrains potential locations greatly, the CAES cavern can be constructed in almost all rock types, making identification of feasible locations that are in proximity to the desired infrastructure or VRE generating facilities likely.
  • / Hydrogen or synthetic gas storage options are transportable, thereby allowing energy to be exported beyond the VRE connected grid. However, CAES round-trip efficiency is superior to both hydrogen and synthetic gas, and thus more suited to support the VRE connected grid in situ.
  • / Charge and discharge response time for CAES is broadly similar to pumped hydro; starting up is simply a matter of getting the compressors and turbine generators up to synchronous speed. This allows variations in the VRE supply to be tracked relatively closely. Green hydrogen and synthetic gas production are more complex processes, making responsiveness more difficult and potentially costly.

concluding insights

Ever greater deployment of VRE to meet rising energy demand is inevitable as the world transitions to net zero carbon emissions. Due to the implications of VRE to the grid and the need to shift energy in time, energy storage at grand scale is necessary.

Energy storage will be provided by a combination of technologies that together can provide rapid response, significant dispatchable power, grid support services and storage durations in the order of hours and weeks. CAES and in particular A-CAES facilities can provide lifecycle cost competitive high power and long duration energy storage solutions that are not as tightly constrained by geography as pumped hydro and achieve higher round-trip efficiency than hydrogen or synthetic gas storage. The case for CAES is strong.

io is best considered as a systems engineer or project integrator, and has deep domain expertise in the very early stages of major energy projects, specialised in identifying the key drivers and bringing transparency to decision making. Energy Storage is one the io’s six Energy Transition segments: energy storage, carbon capture usage & storage, hydrogen value chain, net zero facilities, emissions reduction, and negative emissions, where io applies its techno-economic and strategy skills. io has performed projects in green hydrogen, CO2 transportation, energy storage, energy efficiency, demanning/electrification of platforms and associated gas utilisation.

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[1] Electricity cannot itself be stored at any scale, it must be converted into other forms of energy that can be stored and subsequently turned back into electricity, ideally on demand.

[2] Carbon Tracker – Expect the Unexpected – The Disruptive Power of Low-carbon Technology (https://www.imperial.ac.uk/media/imperial-college/grantham-institute/public/publications/collaborative-publications/Expect-the-Unexpected_CTI_Imperial.pdf)

[3] Round trip efficiency is the ratio of energy put in (in MWh) to the energy retrieved from storage (in MWh) and is expressed as a percentage. Though the steady-state round trip efficiency should be straightforward to calculate, there appear to be differences in interpretation about what energy losses should be included and there does not appear to be a common approach applied across all storage technologies. However, that is a topic in itself and one for another day.