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Compressed Air Storage for the Electricity Grid

Compressed Air Storage for the Electricity Grid. Coalition to Advance Renewable Energy through Bulk Storage (CAREBS). Jason Makansi, Executive Director President, Pearl Street Inc Author, Lights Out: The Electricity Crisis, the Global Economy, and What It Means to You

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Compressed Air Storage for the Electricity Grid

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  1. Compressed Air Storage for the Electricity Grid Coalition to Advance Renewable Energy through Bulk Storage (CAREBS) Jason Makansi, Executive Director President, Pearl Street Inc Author, Lights Out: The Electricity Crisis, the Global Economy, and What It Means to You 314-495-4545 | jmakansi@pearlstreetinc.com | www.carebs.org

  2. The Mission Promote the benefits of bulk energy storage to enhance electricity grid operations, including integration of renewable energy, improved reliability and security, advanced market development, and cost efficiencies throughout the production and delivery value chain Shape and support federal policies affecting bulk energy storage and work with key state-level and storage organizations to advance energy storage generally Distinguish bulk energy storage from distributed storage options - CAES, Pumped Storage Hydroelectric, large-scale batteries and flywheels www.carebs.org |

  3. Why Talk About Bulk Storage? Electricity supply industry has precious little ability to “store” its product – just in time inventory Electricity has to be consumed as soon as it is produced! Renewable energy is extremely variable – at expected penetration levels, will change the way the grid has to operate The U.S. has less grid energy storage (~2%) than other developed countries (4-10%) www.carebs.org |

  4. www.carebs.org |

  5. CAES Schematic (based on Norton) www.carebs.org |

  6. Geology: Tapping the Mt. Simon Sandstone Courtesy: Iowa Stored Energy Park Completed Work Activities • Dallas Center Site Selected • Geophysical Surveying • Drilled & Cored Three Test Wells • Economic Analysis Phase I Current Work Activities • Economic Analysis Phase II • Complete Laboratory Core Analysis • Perform CAES Reservoir Simulation Analysis • Perform Geology Peer Review GO/NO-GO DECISION FOR AIR INJECTION TESTING Spring/Summer 2011

  7. CAES Technology Status 50 plant years of commercial operation – 270 MW facility, Huntorf Germany (1977), 110 MW facility, McIntosh, Alabama (1994) operated by Power South System Improvements for 20% performance gain over McIntosh available from the marketplace today with full warranties Advanced systems teed up - Adiabatic CAES and Next-Generation CAES systems slated for demonstration through ARRA Stimulus funding for U.S. based supplier (Dresser Rand) with U.S. manufacturing base! Others could bid as well. Performance guarantees available More than a dozen commercial and demonstration projects currently being considered Above-ground (power plant) piece – today’s commercial offerings pose little to no technology risk Below-ground (storage medium) piece – cavern storage proven, aquifer storage needs demonstration but natural gas storage in similar geologies operating for decades www.carebs.org |

  8. Grid Integration • Site specific and will likely change over the course of operation, e.g. • Utility integrated resource plan model • Energy, capacity, ancillary services market model • Infrastructure network model • Generic response – D-R Smart CAES • 25-100% in power gen mode with flat cycle efficiency (consistent heat rate) • Start up to full load less than 10 min (generation mode) • Start up to full load less than 5 min (compression mode) • Rapid load taking off grid +/- 35%/minute (compression) • Rapid capacity added to grid +/-20% (generation mode) • ISEP – similar to an intermediate-load combined cycle plant • 270 MW CAES Project –fully dispatchable facility • Compress (220 MW) up to 12-16 hrs (nights, weekends) • Generate (270 MW) up to 12-16 hrs weekdays www.carebs.org |

  9. Deployment Challenges • Efficiency – technical vs. economic • Natural gas consumption • Acceptance by the renewable energy industry • Optimizing location –near the capacity or near the load? • Monetizing the benefit and value • Transmission • Ancillary services • Capacity market • Energy market • Avoidance of older fossil plant cycling www.carebs.org |

  10. Lessons Learned Have to get the geology right – extensive testing and evaluation (Sandia Experience) It may be air but still must be treated with care – detailed process engineering Policy framework has to be supportive Economic and grid modeling needs to be more robust to illuminate and monetize values www.carebs.org |

  11. CAES Benefits I… • Swings both ways – Acts as load and as capacity • Financeable – underground CAES consistently exhibits lowest capital costs of all storage options • Competitive – can compete with today’s prevailing options • Cycling of older, dirtier, and inefficient fossil units • New gas turbine and combined cycle facilities • Renewable energy firming - can bring more renewable energy to more people more of the time – smooth variability in supply, optimize transmission from high renewable areas to load • Little technology risk – does not impair grid reliability • Familiarity and comfort • equipment similar to existing utility gas-turbine based systems • Storage media proven (caverns) or fully proven in allied industry (e.g., natural gas) www.carebs.org |

  12. CAES Benefits II Emissions reduction – Overall much less fossil fuel consumed inefficiently to provide essential grid operating services (e.g., ancillary services) Ancillary services – speed (responds within minutes) and duration (4, 12, 16, and more hours generation at partial or full capacity Extends benefits seen in gas storage - Can do for the electricity industry what natural gas storage did for the natural gas industry Stabilizes electricity markets Optimizes grid operations and management www.carebs.org |

  13. An Emerging Policy Framework Layers of Legislation/Policy Supporting Storage www.carebs.org |

  14. What CAREBS asks for… Re-introduction of the storage investment tax credit (ITC) – Senate bill. Bingaman, Wyden, others Appropriate subsidies and incentives that recognize storage as a cost-effective multiplier of renewable energy delivered through the grid Inclusion in the proposed Clean Energy Credit program FERC incentives similar to transmission assets Classification by FERC as a separate asset class with its own benefits to the grid Inducements to electric utilities and ISO/RTOs to evaluate bulk storage on a equal basis with generation and transmission assets www.carebs.org |

  15. Marketplace Realities • Legislative/policy framework still evolving • Value to monetize still may not be transparent • Carbon credits • Costs of cycling fossil units • Modeling capabilities still evolving • Underground CAES exhibits lowest estimated capital costs of all storage options • CAES equipment comes with WRAP and performance guarantees • CAES satisfies response time and duration requirements of most storage applications • CAES can compete against today’s prevailing options - gas turbine and combined-cycle solutions and deeper cycling of fossil assets www.carebs.org |

  16. To learn more, visit: www.carebs.org Or contact: jmakansi@pearlstreetinc.com

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