DOE OSTI2012
Compressed Air Energy Storage (CAES) is a hybrid energy storage and generation concept that has many potential benefits especially in a location with increasing percentages of intermittent wind energy generation. The objectives of the NYSEG Seneca CAES Project included: for Phase 1, development of a Front End Engineering Design for a 130MW to 210 MW utility-owned facility including capital costs; project financials based on the engineering design and forecasts of energy market revenues; design of the salt cavern to be used for air storage; draft environmental permit filings; and draft NYISO interconnection filing; for Phase 2, objectives included plant construction with a target in-service date of mid-2016; and for Phase 3, objectives included commercial demonstration, testing, and two-years of performance reporting. This Final Report is presented now at the end of Phase 1 because NYSEG has concluded that the economics of the project are not favorable for development in the current economic environment in New York State. The proposed site is located in NYSEG’s service territory in the Town of Reading, New York, at the southern end of Seneca Lake, in New York State’s Finger Lakes region. The landowner of the proposed site is Inergy, a company that owns the salt solution mining facility at this property. Inergy would have developed a new air storage cavern facility to be designed for NYSEG specifically for the Seneca CAES project. A large volume, natural gas storage facility owned and operated by Inergy is also located near this site and would have provided a source of high pressure pipeline quality natural gas for use in the CAES plant. The site has an electrical take-away capability of 210 MW via two NYSEG 115 kV circuits located approximately one half mile from the plant site. Cooling tower make-up water would have been supplied from Seneca Lake. NYSEG’s engineering consultant WorleyParsons Group thoroughly evaluated three CAES designs and concluded that any of the designs would perform acceptably. Their general scope of work included development of detailed project construction schedules, capital cost and cash flow estimates for both CAES cycles, and development of detailed operational data, including fuel and compression energy requirements, to support dispatch modeling for the CAES cycles. The Dispatch Modeling Consultant selected for this project was Customized Energy Solutions (CES). Their general scope of work included development of wholesale electric and gas market price forecasts and development of a dispatch model specific to CAES technologies. Parsons Brinkerhoff Energy Storage Services (PBESS) was retained to develop an air storage cavern and well system design for the CAES project. Their general scope of work included development of a cavern design, solution mining plan, and air production well design, cost, and schedule estimates for the project. Detailed Front End Engineering Design (FEED) during Phase 1 of the project determined that CAES plant capital equipment costs were much greater than the $\$$125.6- million originally estimated by EPRI for the project. The initial air storage cavern Design Basis was increased from a single five million cubic foot capacity cavern to three, five million cubic foot caverns with associated air production wells and piping. The result of this change in storage cavern Design Basis increased project capital costs significantly. In addition, the development time required to complete the three cavern system was estimated at approximately six years. This meant that the CAES plant would initially go into service with only one third of the required storage capacity and would not achieve full capability until after approximately five years of commercial operation. The market price forecasting and dispatch modeling completed by CES indicated that the CAES technologies would operate at only 10 to 20% capacity factors and the resulting overall project economics were not favorable for further development. As a result of all of these factors, the Phase 1 FEED developed an installed CAES plant cost estimate of approximately $\$$2,300/KW for the 210MW CAES 1A and 2 cycles. The capital cost for the 136 MW CAES 1 cycle was even higher due to the lower generating capacity of the cycle. Notably, the large equipment could have generated additional capacity (up to 270MW) which would have improved the cost per KW; however, the output was limited by the night time transmission system capability. The research herein, therefore, is particular to the site-specific factors that influenced the design and the current and forecasted generation mix and energy prices in Upstate New York and may not necessarily indicate that CAES plants cannot be economically constructed in other places in New York State or the world.