Economics of thermal energy storage for compressed air energy storage systems

Abstract

The costs of compressed air energy storage (CAES) systems utilizing thermal energy storage are compared with the costs of conventional CAES systems and combustion gas turbine systems. Comparisons are made on the basis of system energy cost levelized over system operating lifetime (mills/kWh). The comparison was performed by Pacific Northwest Laboratory for the Department of Energy using information from reference studies by the Massachusetts Institute of Technology, Central Electricity Generating Board and Knutsen Research Services. System energy costs were estimated using information from three reference CAES/thermal energy storage studies, a recent PNL research effort, and the EPRI Technical Assessment Guide. Capital investment cost estimates and system operating requirements were obtained from the reference studies. Current turbine fuel and compression energy prices were obtained from a July 1979 PNL research effort. Economic and financial input assumptions and a discounted cash flow-required revenue computational methodology were taken from the Technical Assessment Guide. Use of such a normalization procedure results in system energy cost estimates that are both realistic and comparable. Two principal conclusions resulted from the study. First, given today's fuel prices and the expected fuel prices in the 1980's, conventional CAES systems yield lower energy cost estimates than combustion gas turbinemore » systems. Second, thermal energy system storage/adiabatic CAES systems yield equivalent and, in some instances, slightly lower energy cost estimates than conventional CAES systems while requiring considerably less turbine fuel oil.« less