General Compression Pumps in $17M for Fuel-free Air Energy Storage

While everyone’s talking about new battery technologies that can store huge amounts of electricity for the power grid, for the time being the cheapest ways to store grid power is water and air — that is, pumped hydro and compressed air energy storage, or CAES. The latter involves using cheap power to pump air into underground caverns or tanks, then releasing it to augment a natural gas-fired turbine when power demands are at their peak.

Entrepreneurs and VCs are now looking for innovative ways to tweak this decades-old technology and startup General Compression has come up with an effective way to use compressed air for energy storage without burning natural gas. On Tuesday, the company announced the close of a $17 million Series A round of funding to help it build a commercial-scale unit to test the proposition.

The round was led by US Renewables Group and included Duke Energy (s duk), a utility with a lot of wind power to back up. It comes on top of $9.9 million the Newton, Mass.-based startup raised in 2007, according to Mass High Tech.

General Compression’s “GCAES” units use isothermal compression and expansion to generate power without burning any fuel, according to the company’s web site. The company claims its 2-megawatt modular units can store power at 70-75 percent round-trip efficiency. Because the units can respond in less than 30 seconds and cycle between compression and expansion quickly, they could be used to back up wind farm power output, which is the company’s main focus. As for a working model, General Compression has set an early 2011 date to start building its first commercial project — where and for which customer, it doesn’t say.

Nor does it list costs for its energy storage systems, either in kilowatt or kilowatt-hour terms. In general, big (100-300 megawatt) underground gas-fired CAES storage costs about $600-$750 per kilowatt of storage capacity built, according to the Electric Power Research Institute. Smaller scale (10-20 megawatt) above-ground CAES costs about $1,000-$1,800 per kilowatt and $200-$250$250 to $450 per kilowatt-hour, EPRI reported — still cheaper than pumped hydro to build, if not to operate, and cheaper in kilowatt-hour terms than the battery technologies EPRI surveyed in its 2008 cost comparison. (Here’s a handy primer on various energy storage technologies.)

General Compression isn’t the only startup competing to deliver low-cost, no-fuel CAES. UK-based Isentropic Energy says that its method of heating and cooling adjacent tanks of gravel and capturing the stored energy via a heat pump can pull costs down to $80 per kilowatt-hour. Right now there are only two working CAES plants in the world, one in Huntorf, Germany and another in McIntosh, Ala., so new technologies have a lot to prove.

It’s certainly the right time to be bringing new energy storage technologies to market. Any big push to make wind and solar power account for more than a tiny fraction of the world’s energy supply will have to deal with the intermittency problem — the wind doesn’t always blow and the sun doesn’t always shine, but the grid’s power demands follow predictable peaks that have to be met.

The Department of Energy’s $4.5 billion in smart grid grants late last year included $185 million for 16 energy storage projects. Among the batteries, flywheels, fuel cells and other technologies that got a boost were some CAES projects — Pacific Gas & Electric (S pcg) got $25 million to help build a 300-megawatt CAES plant near Bakersfield, Calif., and West Lebanon, N.H.-based SustainX won $5.39 million to develop its own CAES technology. New York State Electric & Gas is working on a CAES facility using an underground salt cavern, and municipal utilities in Iowa have been planning a CAES project since 2003, though construction hasn’t started yet.