Compressed air energy storage (CAES) technology has strong growth potential and will play an important role in reducing on-peak power costs as well as in the management of renewable energy, says PSEG Global.

The US utility has formed a new joint venture company – Energy Storage and Power (ES&P) – with energy storage pioneer Dr. Michael Nakhamkin, and aims to market, license, develop and deploy second-generation CAES technology as a commercial product.

“PSEG has the expertise and financial resources to bring this technology out of the development stage and into the deployment stage,” said Nakhamkin, who led the design and technical implementation of North America’s only CAES plant in McIntosh, Alabama. “The time is right technically, environmentally and economically for a large-scale deployment of ES&P’s CAES technology.”

ES&P’s patented second-generation CAES technology incorporates lessons learned and operational experience of the Alabama CAES project. It will license its technology to customers, as well as optimize the performance of CAES plants and provide technical support throughout the project design, development and construction process.

CAES technology stores off-peak energy in the form of compressed air in an underground reservoir, and releases this energy during peak hours. It can be used for load management of intermittent renewable energy resources or as a stand-alone intermediate generation source for capturing energy arbitrage, capacity payments and ancillary services.

Potential customers of the technology include electric utility companies, independent power producers, wind developers and transmission owners.

“Energy Storage and Power’s CAES technology is poised to become an important part of the dispatch stack that can address the intermittency of renewables and reduce on-peak power costs,” said Stephen Byrd, president of PSEG Energy Holdings. “We believe this technology is an important component of a broad effort to combat climate change, an effort that must include increased conservation, expanded renewable energy and new clean central power.”

CAES technology has significant potential as a near term, viable, large-scale energy storage technology, according to the Electric Power Research Institute.

“As we see greater and more widespread integration of intermittent generation such as wind gain acceptance, storage technologies like CAES will become even more vital,” said EPRI’s vice president of power delivery Dr. Arshad Mansoor.