Compressed Air Energy Storage (CAES) – An Overview

What is Compressed Air Energy Storage?

Compressed Air Energy Storage, or CAES, is essentially a form of energy storage technology. Ambient air is compressed and stored under pressure in underground caverns using surplus or off-peak power. During times of peak power usage, air is heated (and therefore expands), which drives a turbine to generate power that is then exported to the grid. There are also a couple of variations of this technology. Firstly, is Advanced CAES (A-CAES) which is similar to traditional CAES but utilises a closed loop water reservoir to hydrostatically compensate the pressure of the air being added to the underground caverns. Secondly, is Liquid CAES (L-CAES) which converts air into a liquid by refrigeration, stores it in above ground tanks and subsequently brings the air back to a gaseous state using waste heat. The expansion from liquid to gas is used to power a turbine and generate electricity. 

 

Existing Compressed Air Energy Storage sites in the UK 

There are currently only 2 operational CAES sites worldwide: One plant is in McIntosch, US (110 MW), commissioned in 1991, and one in Huntorf, Germany (320 MW), commissioned in 1978. However, we are aware that several projects are under development worldwide in the US and Australia.   

In the UK, A-CAES is being explored, with BEIS awarding £1 million to the Cheshire Energy Storage Centre, a joint venture between EDF UK R&D, io consulting and Hydrostor Inc., to investigate using Advanced CAES technology and potentially mothballed gas cavities in Cheshire. We are also aware of a 50MW L-CAES project that has been developed in Carrington at Trafford Energy Park by Highview Power, with another 200MW facility being developed in North Yorkshire. 

 

The advantages of Compressed Air Energy Storage

Due to the governments current Net Zero Strategy: Build Back Greener, there is now a legally binding target to become net-zero by 2050. This in turn has lead to a massive demand for renewable generational assets which will only continue to increase with recent concessions that the 2030 emissions reduction target will be missed. Whilst renewable generation now accounts for over 40% of the UK’s requirements, there are times when this cannot support the overall demand on the grid but also where generation levels exceed the demand on the system. During the latter periods, generators are often paid constraint payments to turn down generators and limit exports onto the grid.  

CAES can store this energy for longer, which helps manage electricity generation variations and increasing resilience, while also maximising value for money. Long-term, this will maximise the efficiency of renewable energy generation and reduce our reliance on fossil fuels whilst decreasing energy prices for consumers. 

In comparison to batteries, CAES sites operate over a longer duration similarly to a traditional powerplant. Whilst most large-scale battery schemes have shorter storage durations of 2, 4 and possibly up to 6 hours and are generally developed to provide ‘frequency management’ services, CAES systems can store and produce power on average for 8 hours increasing up to a maximum of 12.

 

Compressed Air Energy Storage opportunities in the UK

 Due to the low energy storage density, there will be a requirement for vast underground storage systems with opportunities to explore this development within existing geological formations such as disused hard-rock or salt mines, and former natural gas storage caverns. For A-CAES ideally there should be a surface component of 40 – 100 acres to facilitate the infrastructure necessary for the compression due to the requirement for a reservoir for 200-500MW projects. For L-CAES the land requirement is much smaller, being approximately 7 acres for a 50MW project. All forms of development will also require a significant grid connection to facilitate both the operational activities and ultimately the export of power.  

Whilst this is an emerging market with limited market evidence, we would expect land rental and freehold values to be comparable with either gas storage projects (for A-CAES) or battery projects (for L-CAES) and formulated around a revenue sharing approach given they are competing for similar types of sites within the market.  

As is always the case with underground assets both developers and landowners require specialist advice in respect of mineral rights which Carter Jonas can also advise on between the Energy and Minerals and Waste Teams. 

If you think you may have a suitable site, or require professional advice, please contact Jack Pocklington at jack.pocklington@carterjonas.co.uk.