Soon to Be a Reality: Next-Gen Compressed Air Energy Storage

Utility scale energy storage doesn’t get the type of attention as, say, solar or electric cars — particularly a technology as dry and far-removed from consumers as compressed air energy storage. But startups are actually innovating in this area, and two in particular are moving ever closer to commercialization: SustainX and General Compression.

In an interview on Monday, SustainX CEO Thomas Zarrella and founder Dax Kepshire told me that by the middle of next year, the company will start construction on a 1 MW compressed air energy storage project, likely at a coal plant, in conjunction with power company AES, its first customer. In late 2009, the Department of Energy awarded SustainX a $5.39 million grant to help it reach that commercialization goal.

General Compression, too, says it will soon start construction on its first commercial project, and is shooting to start in the fall of 2011, according to its website. I chatted with a General Compression exec at the ARPA-E Summit earlier this year (it received a $750,000 grant from ARPA-E), and the company said it has proven its technology via a pilot project.

In the world of compressed air energy storage, these moves toward commercialization are a big deal. Compressed air is a decades-old technology which takes excess energy from a power plant or renewable energy and uses it to run air compressors, which pump air into tanks or underground caverns where it’s stored under pressure. When the air is released, it powers a turbine, creating electricity. There’s only a handful of compressed air energy storage projects in the world, including one in Alabama and one in Germany.

SustainX has already built a 40 kW project at its headquarters in West Lebanon, N.H., which Zarrella said has proven the technology. To build the pilot, the company raised money from RockPort Capital, Polaris Venture Partners, Angeli Parvi and recently received attention from GE (s GE) via its Ecomagination Challenge.

SustainX says its secret sauce is in how it uses a water spray to keep the air at a constant temperature through the compression and storing process. In January, the company announced a patent for that technology, and says it holds three patents around its technology. SustainX’s Kepshire says the company uses off-the-shelf parts and can offer energy storage at a disruptively low cost.

General Compression has been working on a similar technology, and says its technology has a 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. General Compression also raised a $17 million Series A round of funding and $9.9 million back in 2007. Investors include US Renewables Group and Duke Energy (s duk), a utility with a lot of wind power to back up.

After these two companies commercialize their technologies, we’ll see how widely power companies will adopt the tech. The idea is that compressed air energy storage can be cheaper — over the lifetime of the system — than other energy storage options like batteries. The systems also don’t require potentially toxic chemicals like batteries do, and aren’t site specific like pumped hydro is (you need a hill).