Large scale penetration of renewable energies such as wind and solar into the electric grid is complicated by their intermittency. Energy storage systems can mitigate these fluctuations by storing off-peak energy for use at peak-demand times. Compressed air energy storage (CAES) is one of the most promising storage technologies due to the large amount of energy that can be stored at an economical cost. We evaluate the feasibility of improving the economics of CAES by distributing compressors near heat loads to enable recovery of the heat of compression to supply low-grade heating needs such as district heating. Distributed CAES (DCAES) is more efficient; however, it has higher capital costs due to the compressed air pipeline required between distributed compressors and the storage site. We evaluate the project economics of DCAES in a hypothetical scenario with a variable electric and heat load. The size and dispatch of a generation fleet composed of a wind farm, CAES or DCAES plant and conventional gas turbines are optimized to satisfy the annual electricity load at an hourly resolution at the lowest total cost. We find that the total cost of supplying heat and electric loads is less expensive with DCAES given a 50 km pipeline when fuel prices exceed $7.6/GJ. The cross-over fuel price depends on the distance as it drives the capital cost of the pipeline. The minimum effective fuel price required for economic superiority of the DCAES system is $7.0/GJ and $8.3/GJ at pipeline lengths of 25 and 100 km, respectively.
Safaei, Hossein, David W. Keith, and Ronald J. Hugoc. "Compressed Air Energy Storage (CAES) with Compressors Distributed at Heat Loads to Enable Waste Heat Utilization." Applied Energy 103 (March 2013): 165–179.