Power generation and distribution systems suffer from two expensive characteristics:
- Inexpensive power sources aren’t always near users.
- Generation capacity doesn’t always line up with power demand. For example, power suppliers have to meet peak demand that may consume several times the average for just a few hours a day.
There are a number of solutions to the first problem. High-voltage transmission lines can carry electricity long distances, but there are losses and expenses to transporting power even in that form. Rather than generate electricity at the power source, sometimes it’s more cost-effective to move the power source to the demand: So we have natural gas pipelines and coal railways spanning continents to deliver fuel to generators closer to users. Have a cheap power source that can’t be moved around or attached to a high-voltage grid (say, geothermal wells in Iceland)? Power can be exported in the form of energy-intensive commodities, like refined aluminum.
To solve the second “peak demand” problem most power systems rely on flexible but expensive natural gas generators to supplement their baseload supplies. But it would be better if they could run their cost-effective power plants at a more consistent level and somehow store the extra energy generated during off-peak hours to release during peak hours. When you’re talking about hundreds of megawatt-hours chemical batteries are not a realistic solution. Some utilities are investigating flywheel arrays, but at this point the capacity and cost-effectiveness of those are limited.
Two clever solutions to the problem are compressed air energy storage (CAES) and pumped hydro storage (PHS). PHS depends on being near a water reservoir: It’s basically a hydroelectric dam that is filled during off-peak hours by pumping water up into it and run during on-peak hours by draining water through turbines. The EU has about 40GW of PHS capacity and the U.S. has about 20GW. As with PHS, CAES depends on geological circumstances. Presently there’s only one plant in the U.S. (at McIntosh, Alabama) running CAES. Thanks to its location near an underground salt dome it has a 19 million cubic foot cavern that the plant can pressurize up to 1100psi. When full this CAES reservoir can run a 110MW generator for 26 hours straight. (Source: Power Magazine.)