During 2006 our research exploring the competition to gasification with CCS was focused on: (i) understanding the market competition between baseload wind power and baseload coal power, and (ii) getting a better understanding of compressed air energy storage.


Baseload Wind Power vs. Baseload Coal Power

Major findings of studies modeling polygeneration systems based on switchgrass (led by Larson) and coal + biomass (led by Williams) are:

During 2006 we focused our energy systems analysis for wind/compressed air energy storage (wind/CAES) systems on the competition in baseload power.markets between wind/CAES systems and coal power systems, considering for the latter both coal integrated gasifier combined cycle (IGCC) plants with CCS and coal IGCC plants with CO2 vented. We found that the GHG emission rate of a baseload wind/CAES unit fired with natural gas would be ~ 1/10 of that for a coal IGCC with CO2 vented or ~ ½ of that for a coal IGCC with CCS. We also found that although wind/CAES cannot come close to competing with today’s new coal power plants in the absence of a climate change mitigation policy, its levelized generation cost (in $/MWh) would be very close to that for coal power in the presence of price on GHG emissions of about $100//tCequiv—a benchmark emissions price that is about the minimum needed to induce a power generator by market forces to build a coal plant with CO2 capture and storage instead of a plant with CO2 vented (assuming that all power plants operate at the same “baseload” capacity factor of 85%).

In a real power market, capacity factors cannot be specified at a fixed value but rather are determined by market forces to reflect the relative dispatch costs (short-run marginal costs— i.e., fuel costs plus costs for GHG emissions plus variable operation and maintenance costs) of the competing options on the electric power grid. For a given set of power generating systems connected to the grid, the grid operator determines the capacity factors of these systems by calling first on the system with the least dispatch cost. Under this condition, deployment in sufficient quantity of the technology with the least dispatch cost can lead to a reduction of the capacity factors and thus an increase in the levelized generation cost of the competing options on the grid. Our research found that the wind/CAES option would have a lower dispatch cost than the coal options ~ 75% of the time and more than 90% of the time when the value of GHG emissions is $0/tCequiv and $100/tCequiv, respectively. Thus adding more and more wind/CAES to the power grid would lead to lower and lower capacity factors for all the competing options—thus driving up the levelized generation costs for the coal power options.

Notably, the wind/CAES option enables both wind and natural gas to compete in baseload power markets in a climate change constrained world. The intermittency of wind makes it impossible for a “pure” wind system to provide baseload power. Moreover, high natural gas prices exclude natural gas combined cycle power technology from providing baseload power wherever there is a substantial amount of coal power on the grid. But coupling wind to CAES makes it possible for wind to deliver firm power. And the use of wind to provide compressor energy for CAES enables natural gas to be burned at low enough heat rates in CAES units to be competitive with coal in economic dispatch.


CAES Technology

The extent of the wind/CAES opportunity in mitigating climate change depends on the availability of suitable geologies for CAES. To better understand the issues involved, the group carried out an assessment of CAES technology for potential applications that include, but are not restricted to, wind/CAES. A draft final report on this assessment is nearing completion. The report discusses both the turbomachinery of CAES (essentially a gas turbine in which the compressor and expander functions are separated in time) and the geologies of underground air storage.

The major CAES storage options are mined hard rock (including abandoned existing mines), aquifers, and salt (salt domes or bedded salt). The only commercial plants have used salt domes but the world’s first wind/CAES plant—plans for construction of which were announced in late 2006—will use aquifer storage. The CAES report gives focused attention to aquifer storage because it is the dominant geological storage option in most US regions where the good wind resources are located. Earlier assessments of CAES have suggested that aquifers are likely to be available in most wind-rich regions of the US. Moreover, although there is little experience with storing air in aquifers, there is extensive industrial experience with aquifer storage of natural gas.

However, our report points out that the true US CAES potential for aquifers cannot be determined without doing detailed studies of different aquifer types—giving focused attention to the implications of air storage. Most experience with natural gas storage relates to seasonal storage, whereas CAES coupled to wind would be characterized by charge/discharge cycles of the order of a day rather than a season. Moreover, air has physical and chemical properties that are different from natural gas (including the fact that storing air introduces oxygen underground that can lead to a wide range of chemical reactions and the introduction of aerobic bacteria) that imply rates of injection and recovery that are not only different from those for natural gas but also which can change over time as a result of chemical reactions and biological activity.