Commercial, Merchant Compressed-air Energy Storage Plant Under Development?

Michael Giberson

Wind power RFP processes* are common enough these days, typically driven by renewable energy mandates placed on utilities. A recent wind power RFP announcement out of Santa Fe, New Mexico, is different. A new company, Chamisa Energy, has initiated an RFP seeking wind power to pair up with a planned compressed-air energy storage (CAES) plant to be developed in Swisher County, Texas. Chamisa has partnered with Dresser-Rand and intends to use their SMARTCAES technology, which it claims can “provide a wide array of electrical services: peaking, intermediate, base load, tolling and ancillary services.”

The RFP says that the CAES project may connect to the ERCOT CREZ lines that will be crossing Swisher County, or it may connect to Xcel’s system in the Southwest Power Pool (SPP), or it may connect to both ERCOT and SPP! This last option would put Chamisa in the interesting position of being able to arbitrage some price differences between the two power markets. (It may raise some of the same jurisdictional barriers that Tres Amigas is facing with its proposed three-way power system interconnection, planned for Clovis, New Mexico. ADDED: But a few existing power plants in Texas are dually connected between ERCOT and utilities in the Eastern Interconnection, so the issue appears manageable.)

The relationship between Chamisa’s CAES project and the Tres Amigas interconnection is interesting. Both companies are headquartered in Santa Fe, New Mexico. The proposed projects are about 90 miles apart, one at the eastern edge of New Mexico and the other directly east, in the middle of the Texas panhandle. Chamisa proposes an energy storage project that may link the two regional power systems; Tres Amigas proposes to build a link for three regional power systems but would have an energy storage component, too. Both aim to facilitate the accommodation of intermittent power resources to the grid by providing storage and other grid reliability services.

Not clear that the business of accommodating intermittent power is big enough for both of them, but maybe that is just “not yet big enough.” Many wind projects are under development in the region, and just waiting for a little more clarity on when and where transmission enhancements will be showing up.

* RFP = “request for proposals”, a common process by which one company invites others to offer to become suppliers.

7 thoughts on “Commercial, Merchant Compressed-air Energy Storage Plant Under Development?

  1. Transmission becomes less of an issue when storage is available to ‘time-shift” wind power to peak or intermediate load periods.

    However, while CAES or other storage technologies have the potential to make wind power more valuable, they also make it substantially more expensive, both as the result of the incremental investment in the storage facilities and in the in/out losses inherent in the storage operations.

    Of course, with sufficient federal and state incentives, anything is possible, though not necessarily economically attractive.

  2. Gridflex Energy is pursuing several CAES as well as pumped storage projects specifically for the purpose of integrating wind and solar resources. The incremental cost of using these storage technologies to create firm capacity with wind is low enough to allow it to compete against conventional fossil resources, particularly with the appropriate credit given to the renewable resource component.

  3. “Chamisa uses the Dresser-Rand SMARTCAES … the roundtrip efficiency of a CAES train is about 87% and the HHV is 4400.”

    That efficiency is a lot higher than the 70% I usually see. Are they doing something new, or not counting the energy of the gas they’re burning, or what?

  4. Most likely they are using a different method of calculating the efficiency than what is typically used. If you convert the electrical input plus fuel burned into joules, versus electricity out in joules, the round-trip is about 63%. However, that may not be the most meaningful way of assessing its efficiency. It’s really a meaningless number in the context of the value you get out of the operation of the plant.

  5. The efficiency of the process is hardly meaningless.

    In the simplest case, time-shifting, the installed wind generation capacity must be 60% greater to compensate for the inefficiency of the storage process while delivering the same amount of energy to the grid. This would increase the installed cost of the wind generation field by 60%, not including the installed cost of the storage equipment. Therefore, simple time shifting of a quantity of wind-generated energy would roughly double the cost of that energy. Granted, it would also increase its value by improving load matching.

  6. Your assessment, Ed, assumes that all or most of the wind would go into storage. In reality, only a smaller fraction of the wind would go into storage, and then be withdrawn flexibly to match what wind is feeding into the grid to maintain the desired output level. That is why the efficiency question is not very important. The incremental addition of flexible storage and generating capacity, used incrementally to gain the maximum benefit, makes the investment well worth it. We’ve conducted this analysis many times in the context of actual wind data and our storage development sites. You are correct, however, in that if the emphasis is purely on time-shifting, it doesn’t work out very well.

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