N.J. venture uses compressed air to store energy
A central New Jersey company says it believes it has figured out a way in the green economy to make money from air.
Energy Storage & Power L.L.C., funded by a $20 million investment from utility giant Public Service Enterprise Group Inc., has devised a patented system for storing electricity in compressed air, which is pumped into caverns, abandoned mines, or aboveground canisters and then released when it is needed to generate power.
Such mass-storage systems will be increasingly necessary as more power is derived from intermittent sources such as wind and solar generators. Windmills tend to produce power at night, when customers need it the least.
"As folks have seen renewables come into the market, particularly wind, people have gained a much greater appreciation for the importance of storage," said Stephen C. Byrd, chief executive officer of the company in Bridgewater, N.J., near Edison.
The firm, a joint venture of Public Service Enterprise Group Global L.L.C. and air-storage pioneer Michael Nakhamkin, is in line to get a share of the $50 million to $60 million that the Department of Energy will award this fall to as many as four compressed-air energy-storage projects.
Byrd said the venture's technology was incorporated into several proposed air-storage facilities that were strong candidates for grants, including a 300-megawatt plant being developed by Pacific Gas & Electric Co., of San Francisco.
"I would not be surprised if we had several of those parties win DOE support," he said.
Mass energy-storage systems will become increasingly critical as the nation's energy markets shift to comply with laws favoring renewable power over greenhouse-gas-emitting fossil fuels. Among several alternatives - ice-storage systems, pumped-storage hydroelectric plants, massive battery arrays - the compressed-air systems are considered the most cost-effective.
If renewable power is to constitute 20 percent of the nation's electrical supply - about 9 percent now comes from renewables, mostly hydroelectric - the nation will need 114,000 megawatts of electrical-storage capacity, according to a study published last year by the American Institute of Chemical Engineers.
"That's about a $342 billion market," Byrd said.
Though compressed-air storage sounds exotic, the process employs technology and equipment already extensively used by oil and gas developers to force hydrocarbons to the surface by pumping high-pressure gas and liquids underground.
And Byrd said storing compressed air in depleted salt mines or gas fields was no different than the technique utilities use to store high-pressure natural gas underground ahead of the heating season.
"We're just storing air. We're not storing hydrocarbons," he said. "So it's much more straightforward."
As the compressed air is released and expands, it becomes very cold and must be mixed with natural gas to drive a conventional turbine generator. The mixture saves about 65 percent of the gas used by a fossil-fuel turbine.
"It does take a little bit of education, but once people understand how it works, it is akin to a regular power plant," Byrd said. "It's just configured in a very different way."
Only one such facility exists in America: a 110-megawatt plant built in 1991 in McIntosh, Ala.
Nakhamkin, the technological muscle behind the Energy Storage & Power joint venture, helped build the Alabama plant. He has developed technology that cuts plant emissions, improves efficiency, and reduces costs by using more standard components.
Byrd said the installed cost had dropped about 30 percent, to $700 to $800 per kilowatt of capacity.
Energy-storage systems make economic sense: Cheap electricity produced during off-peak hours is acquired, stored, then used to generate power during peak hours, when prices are much higher.
The economics have become much more attractive with the push to build more renewables.
Advocates for storage systems say they could be built at the site of renewable-energy production, such as wind farms. But they also might be located closer to markets for the power, even in urban areas, so that they would draw upon long-distance transmission lines during the night and provide some relief during peak hours, when the electrical grid is most stressed.
"If you have storage, you can much more evenly use the transmission system and can substantially decrease the amount of transmission you have to build for renewables," Byrd said. "That's big, and a number of utilities are looking at that."
Some of the systems the company is developing are as small as 16 megawatts and could be built on two acres where the compressed air is stored aboveground in canisters, he said.
Environmental hurdles for a compressed-air plant would be "quite minimal" since regulatory agencies are accustomed to underground gas storage, Byrd said.
"And from an emissions point of view, it's quite benign."