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Is the Juice Worth the Squeeze? Compressed Air Energy Storage for Grid-Scale Power

When you hear about Compressed Air Energy Storage, it almost sounds like science fiction. Using compressed air for power? It reads like a gimmick from a Jules Verne novel or like some crazy invention from the middle of the 19th century that got shelved in a museum. Trust us though, it is a real energy storage option…as real as the batteries we use. It even has the potential to become more useful than batteries in the context of grid-scale storage for wind and solar energy. 

The development of Compressed Air Energy Storage or CAES started in the 1970s with construction of the first CAES power storage facility in Huntorf, Germany. This 290 megawatt facility was built with the intention to supply homes with electricity during peak load periods. The facility is located near the city of Bremen, 60 miles from the city of Hamburg, which has over five million people in its metro area.

Huntorf Compressed Air Storage
Historic Picture of Huntorf Power Facility

At the time that the Huntorf CAES facility storage was built there was limited renewable energy generation in the region, and the energy to serve peak demand was produced by burning coal. Since the late 90s, however, there has been considerable innovation and progress in renewable deployment, especially in solar and wind energy. This has sparked a renewed interest in CAES technology.

In 1991, a CAES storage plant with a 110 megawatt capacity of 26 hours (2,860 MWh energy) was built in McIntosh, Alabama. The cost of construction was estimated to be $65 million, and it achieved an energy efficiency of 54% in comparison to the Huntorf plant at 42%.

How Does a CAES Plant Work?

Both the McIntosh and Huntrof facilities utilize huge salt caverns to store compressed air underground. Large storage sites are needed for this process because of the low density of air; salt caverns constitute an ideal subsurface compartment with adequate void space to accommodate the lower density fluid. The salt has unique characteristics: it is impermeable which limits pressure loss, and it also does not react to oxygen in the air.

These caverns are usually artificially constructed using solution mining techniques in deep salt formations. For example, the McIntosh plant uses a salt cavern that is almost 1,000 feet tall and 200 feet wide, a large enough space to fit an 80-story building. The cavern has a volume of approximately 19 million cubic feet.

Compressed Air Energy Storage
Illustration of CAES System

The salt caverns are pumped full of compressed air at night when the demand for energy is lowest. During peak demand hours, occurring in the morning and early evening when many people are getting ready and returning from work, the need for electricity goes up and the plant releases air from the caverns. Natural gas is used to heat the air and direct it through a power turbine to generate electricity. This technology is relatively low cost and can store thousands of megawatt-hours of energy. 

The McIntosh plant pumps air into the caverns during late night hours. This process is known as “compression mode.” Air pressure reaches 1,100 pounds per square inch (psi). When the morning energy demand arises, the plant goes into “generation mode,” as air from the cavern is released and directed through pipes into a heat exchanger called the recuperator.

Here the air is heated to 600°F and enters a high pressure combustion engine where natural gas heats the air up further to 1,000°F. Then, the air travels through a high and low pressure expander, which rotates the generator to produce electricity. This electricity is later fed into the power grid and can power 11,000 homes for a period of up to 26 hours.

The above video shows the McIntosh plant operation and construction, as well as the Huntrof plant.

Advantages and Disadvantages of CAES

Compressed air storage technology has some drawbacks that make it difficult for wider adoption.

One of the main disadvantages is the energy inefficiency of CAES plants. The process of compressing and decompressing air involves large energy losses, which means electricity-to-electricity efficiency is typically around 40-52%, compared to 70-85% for pumped-hydro energy storage facilities and 70%-90% for chemical batteries.

As an aside, Lithium-ion batteries have one of the highest CE ratings out of all types of rechargeable batteries at 99% or higher; these are the most efficient batteries and to this point, have been the most deployed form of grid-scale energy storage in the U.S. Lead acid batteries are lower at about 90%, and nickel-based batteries are closer to 80% with efficiencies dropping at high charge rates

The low efficiency of CAES systems is a result of required heating of air during compression and decompression. When air is compressed, it releases heat during the process which is not recaptured, so part of the energy is wasted. During the decompression process, the air gains heat and therefore generates a cooling capacity that could freeze a water vapor. This makes the process energy inefficient, while also reliant on fossil fuels for heating needs when air is released.

The technology is, however, cleaner than the use of batteries because it does not involve the release of toxic chemicals into the environment during decommissioning. Also, the lifespan of CAES plants can be quite long, with both plants mentioned above having been in operation longer than 30 years; a lithium ion battery typically has a lifespan of 2-3 years or 300-500 charges.

Another advantage of CAES systems is the duration of achievable energy storage. Energy can be stored for over 25 days, which is pretty impressive and among the highest of currently operational energy storage technologies. It’s second place only to pumped hydro energy storage.

Capabilities of Compressed Air Energy Storage
Capabilities of Existing Electricity Storage Technologies (APS, 2007)

The Future of Compressed Air Storage

The history of using compressed air for energy storage is limited, with the two facilities above being the best examples of deployment. What’s really interesting is the future of CAES. At the moment, there are a few novel concepts and pilot programs underway that are attempting to make compressed air storage a serious alternative to batteries for grid storage.

One of the main barriers that companies confront is the need for natural gas to heat and reheat the air pressure of CAES.

There have been two companies, LightSale and Sustain X, that have tried to eliminate the natural gas by replacing it with a type of water foam that saves electricity and makes the whole process consume less net energy. LightSale attempted to replace the natural gas needed to heat air via injection of a fine, dense mist of water spray. The other company, Sustain X, also tried to use water foam, but attempted to keep the air pressure in large pipes (similar to pipes that carry natural gas) so the technology could be positioned near industrial locations and not just where there are underground caverns.

The idea was for the air pressure temperature to remain near constant, negating the requirement of natural gas for compression and decompression. Furthermore, the capacity of the storage system could be expanded or reduced according to the needs due to the use of pipes. It is harder to control quantity with salt caverns, but pipes can always be installed or removed based on need.

Sadly, both projects have not yielded any results. According to an article in 2016, LightSail has laid off many of its employees and did not succeed in producing the pipes they hoped to store air pressure in. Although the CEO of the company claimed that they created and sold “the most advanced carbon-fiber tanks for bulk gas storage on the planet,” a source said that the tanks that LightSail produced were not in any way innovative, but rather regular carbon-fiber Type 4 tanks that had been in use for decades. In fact, another company had been producing them commercially for 50 years. 

Years later, another article claimed that LightSail won three California Energy Commission grants to demonstrate it’s inventive technology. They later withdrew from all three projects, failing to demonstrate the efficiency of their tanks.

On the other hand, in 2013, SustainX built a 1.5-megawatt ICAES system (the type envisioned with water foam) located at their headquarters in Seabrook, New Hampshire. Since that time, there has not been news of further commercialization of technology or new project builds. In 2016, the company announced plans to merge with General Compression (another CAES startup). They formed a new entity by the name of GCX Energy Storage, which will focus on “combining fuel-free CAES technology with low-cost existing and developable salt caverns” in their future endeavors. So it seems the new company will pause future development of innovative CAES solutions and instead, focus on developing the more traditional salt cavern variant. 

Failure of these two prominent startups show building CAES above ground is more challenging and requires further innovation in insulation and building materials.

One promising alternative option that has been researched is Adiabatic Compressed Air Energy Storage or A-CAES. Both facilities in Germany and Alabama are Diabatic; In an Adiabatic facility, energy used for compression is stored and used again for decompression. Also, the process relies less on natural gas and other fossil fuels. This improvement increases the efficiency of the process to a theoretical limit in excess of 90% if there is perfect insulation; however, the maximum efficiency achieved through improving insulation stands at 70%, which is still marked improvement over the 40-52% efficiency of the Diabatic storage. 

The main problem of this system is the design of heat beds that have advanced insulation and can store heat for longer periods without wasting heat energy. Project ADELE-ING, founded by BMWi and developed in Germany, was dedicated to building a working prototype of CAES. In the summer of 2017, BMWi claimed to achieve efficiency of about 70%. This reduces the price per unit of energy storage of an adiabatic CAES operation and may make it a viable solution for utility-scale energy storage moving forward.

Even if these new concepts do not work, facilities like the one in McIntosh can be built to offer great carbon reduction in energy storage, with the potential to save the environment from toxic chemicals. Two Finnish professors recently did a study of CAES potential in 145 countries worldwide. They found that North America and Sub-Saharan Africa have the greatest concentration of salt areas suitable for building storage facilities. The study concluded that it could “…be explained by the fact that North America has huge salt deposits and favorable geology for CAES,”. Likewise, “sub-Saharan Africa has large aquifer reservoirs and salt deposits which match with appropriate geological formations.”

So in any case, North America has extraordinary potential for CAES deployment, with Western Canada being the region with highest potential in the world.

Capital Costs

The capital cost of a CAES facility is a sum of the storage medium, the facility capacity (power), and the energy stored in the storage medium. (EPRI, 2002). The cheapest option for air pressure storage are still salt caverns.

Table 3. CAES Plant Costs For Various Storage Media And Plant Configurations. Source: EPRI, 2002

Storage medium for CAES plant

Size (MWe)

Cost for power related plant components ($/kW)

Cost for the energy storage components ($/kWh)

Typical hours of storage for a plant

Total capital costs ($/kWe)







Porous media






Hard rock (new cavern)






Surface piping






Operating Costs

The primary inputs to the operating costs of a CAES system are electric utilities and natural gas. Total delivered opex during power generation mode is about 75% of the incremental cost of off-peak power purchased during the compression mode, plus the cost of the fuel.

As natural gas prices increase, Diabatic CAES becomes more challenged economically. The 75% figure accounts for the ratio between generated electricity and purchased electricity and the energy lost to pipe friction, air leakage, pressure regulation, and compressor/expander component efficiencies.


Using air for storing electricity may sound a bit strange, but it is totally possible. In the last 30 years, the plants that have used this system have made the case that it can be a viable alternative to batteries or other electrical storage. There are still many obstacles to overcome in order to make the technology widely available, but creation of new materials and new engineering innovations can get us there.

In the future, we may find ourselves not only speaking of countries rich with oil, but also those that are rich with salt deposits. Electric energy storage may become just as important as electricity generation as the penetration of renewables increases.

Andrew Schaper is a professional engineer and principal of Schaper Energy Consulting.  His practice focuses on advisory in oil and gas, sustainable energy and carbon strategies.

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