Compressed Air Energy Storage

Traditional Underground and Next-Generation CAES Technologies:
Global Market Analysis and Forecasts

The rapidly increasing penetration of intermittent renewable energy on grids worldwide and volatility of load profiles are encouraging demand for long duration energy storage. Aside from pumped hydro, compressed air energy storage (CAES) is the only commercial long duration storage technology to have been deployed at utility scale. As a result, demand for traditional underground CAES that can be deployed at bulk scale, which has been dormant since 1991, will pick up meaningfully over the next few years.

The unique siting requirements of traditional underground CAES, however, present substantial development risk and limit the technology’s outlook. Higher efficiency, next-generation CAES technologies that are not limited by geological considerations are on the cusp of commercialization, and are well positioned to address the gap in availability of long duration energy storage technology that can be sited where needed. Navigant Research forecasts that worldwide installed capacity of compressed air energy storage systems will reach 11.2 GW by 2023.

This Navigant Research report analyzes the global market opportunity for both traditional underground CAES and next-generation CAES technologies across five key application segments: wind energy integration, solar energy integration, grid asset optimization, transmission and distribution deferral, and ancillary services. The report provides a comprehensive assessment of the demand drivers, policy factors, and technology issues associated with the market for CAES. Key industry players are profiled, and worldwide capacity and revenue forecasts, segmented by application, technology, and region, extend through 2023.

Key Questions Addressed:
  • What are the critical industry issues facing the CAES sector?
  • How fast will the market grow and what are the key demand drivers?
  • What are the key countries/regions for CAES going forward, and what are the key drivers, barriers, and opportunities for CAES in those markets?
  • How will the market for traditional underground CAES develop vs. the market for next-generation, geology-agnostic CAES?
  • What are the estimated installed costs and levelized costs for traditional underground and next-generation CAES technologies, and how will they trend?
  • How large will the market be in 2023, in terms of capacity installed and revenue, by region, application and technology?
  • Who are the key players in the CAES market?
Who needs this report?
  • CAES and other energy storage technology providers
  • CAES and energy storage project developers
  • Renewable energy equipment manufacturers
  • Major electrical and power systems firms
  • Utilities and grid operators
  • Government agencies
  • Investor community

Table of Contents

1. Executive Summary

1.1  Introduction

1.2  Key Market Conditions

1.3  Industry Issues

1.4  Market Forecast

1.4.1   North America

1.4.2   Europe

1.4.3   Asia Pacific

2. Market Issues

2.1  Introduction

2.2  Market Drivers

2.3  End-Market Applications Best Suited to CAES

2.3.1   Grid Asset Optimization

2.3.2   Integration of Intermittent Renewables

2.3.3   Transmission and Distribution Deferral

2.3.4   Ancillary Services

2.3.5   Energy Arbitrage

2.4  Market Conditions and Regulatory Issues in Key Geographic End Markets

2.4.1   North America

2.4.1.1  United States

2.4.1.1.1.   Regulatory Environment

2.4.1.1.2.   State Renewable Portfolio Standards

2.4.1.1.3.   Investment in Infrastructure

2.4.1.1.4.   Federal Wind Funding

2.4.1.1.5.   California Assembly Bill 2514

2.4.1.1.6.   CPUC Proposal for Energy Storage Procurement Targets and Mechanisms

2.4.1.1.7.   STORAGE Act of 2013

2.4.2   Europe

2.4.2.1  Energy Mix

2.4.2.2  Investment in Infrastructure

2.4.2.3  Natural Gas Prices and Energy Market Structures

2.4.3   Asia Pacific

2.4.3.1  China

2.4.3.2  India

2.4.3.2.1.   Mandatory Scheduling of Wind Power

2.5  Supply-Side Issues: Business Models and Supply Chain

2.5.1   Supply Chain

3. Technology Issues

3.1  Introduction

3.2  Overview of Traditional CAES Technology and Its Limitations

3.2.1   Pros and Cons of Traditional CAES

3.3  Next-Generation CAES Technologies

3.3.1   Isothermal CAES

3.3.2   Advanced Adiabatic CAES

3.3.3   Pros and Cons of Next-Generation CAES

3.4  Cost Buildup and Comparison with Other Storage Technologies

3.4.1   Traditional CAES

3.4.2   Next-Generation CAES

4. Key Industry Players

4.1  Introduction

4.2  CAES Technology Developers and Vendors

4.2.1   Dresser-Rand

4.2.2   General Compression

4.2.3   Hydrostor

4.2.4   LightSail Energy

4.2.5   SustainX

4.3  Utilities

4.3.1   Pacific Gas and Electric Company

4.3.2   RWE Power

4.4  CAES Project Developers

4.4.1   Apex CAES

4.5  Other CAES Industry Participants

4.6  CAES Component/Equipment Vendors and Service Providers

5. Market Forecasts

5.1  Methodology

5.1.1   Key Flex Points in the Model

5.1.2   CAES Baseline Figures

5.1.3   CAES Capital Cost Figures

5.2  Global Market Forecast

5.2.1   Market Forecast by Region

5.2.1.1  North America

5.2.1.2  Europe

5.2.1.3  Asia Pacific

5.2.2   Market Forecast by Application

5.2.3   Market Forecast by Technology

5.3  Conclusions and Recommendations

6. Company Directory
7. Acronym and Abbreviation List
8. Table of Contents
9. Table of Charts and Figures
10. Scope of Study, Sources and Methodology, Notes

List of Charts and Figures

  • Expected Load Following Ramp Rate Requirement, California: 2006-2020
  • Advanced Adiabatic CAES Schematic from RWE Power
  • CAES Installed Cost by Technology, World Markets: 2013-2023
  • Estimated Capital Cost Breakdown for a Traditional CAES Plant
  • Levelized Cost of Traditional CAES vs. Natural Gas Peaker and Pumped Hydro Storage
  • Annual Levelized Cost of Traditional CAES vs. Natural Gas Peaker and Pumped Hydro Storage
  • LCOE Range for Traditional CAES, World Markets: 2013-2023
  • Estimated Capital Cost Breakdown for an Aboveground Isothermal CAES Plant
  • Levelized Cost of Aboveground Isothermal CAES vs. NaS and Flow Battery Storage
  • Annual Levelized Cost of Aboveground Isothermal CAES vs. NaS and Flow Battery Storage
  • LCOE Range for Isothermal Aboveground CAES, World Markets: 2013-2023
  • CAES Installed Capital Energy Cost by Technology, World Markets: 2013-2023
  • CAES Installed Capital Power Cost by Technology, World Markets: 2013-2023
  • CAES New Installed Capacity by Region, World Markets: 2013-2023
  • CAES New Installed Revenue by Region, World Markets: 2013-2023
  • CAES New Installed Capacity by Application, World Markets: 2013-2023
  • CAES New Installed Capacity by Technology, World Markets: 2013-2023
  • CAES New Installed Revenue by Technology, World Markets: 2013-2023
  • CAES New Capacity Additions by Application, North America: 2013-2023
  • CAES New Capacity Additions by Technology, North America: 2013-2023
  • CAES New Capacity Additions by Application, Europe: 2013-2023
  • CAES New Capacity Additions by Technology, Europe: 2013-2023
  • CAES New Capacity Additions by Application, Asia Pacific: 2013-2023
  • CAES New Capacity Additions by Technology, Asia Pacific: 2013-2023
  • CAES New Installed Revenue by Technology, North America: 2013-2023
  • CAES New Installed Revenue by Technology, Europe: 2013-2023
  • CAES New Installed Revenue by Technology, Asia Pacific: 2013-2023
  • High Amount of Off-Peak Wind Generation Can Require Curtailment
  • Power Sector Capital Investment Needs, United States: 2010-2030
  • Proposed Energy Storage Targets, California IOUs
  • CAES Supply Chain
  • Schematic of Compressed Air Energy Storage
  • Geological Formations Potentially Suited to CAES, Continental United States
  • Underground Salt Deposits and Cavern Fields, Europe
  • Second-Generation CAES Design
  • Isothermal CAES Schematic from SustainX

List of Tables

  • Summary of Ancillary Services Suited to CAES
  • AB 2514 Implementation Timeline
  • Wind Energy Penetration by Country, European Union: 2015 and 2020
  • Key Applications for CAES, China
  • Capital Cost and Operating Characteristics of Traditional CAES vs. Natural Gas Peaker and Pumped Hydro Storage
  • Capital Cost and Operating Characteristics of Aboveground Isothermal CAES vs. Sodium Sulfur and Flow Battery Storage
  • Estimated Capital Cost Breakdown for a Traditional CAES Plant, World Markets: 2013
  • Range of Levelized Costs of Traditional CAES vs. Natural Gas Peaker and Pumped Hydro Storage
  • Estimated Capital Cost Breakdown for an Aboveground Isothermal CAES Plant, World Markets: 2013
  • Range of Levelized Costs of Aboveground Isothermal CAES vs. NaS and Flow Battery Storage
  • Range of List of CAES Projects and Status, World Markets: 2013
  • Levelized Cost of Energy for CAES by Technology, World Markets: 2013-2023
  • Dresser-Rand SWOT Analysis
  • General Compression SWOT Analysis
  • Hydrostor SWOT Analysis
  • LightSail Energy SWOT Analysis
  • SustainX SWOT Analysis
  • Other CAES Industry Participants
  • CAES Supply Chain Participants
  • Key Flex Points in the CAES Model
  • Baseline Figures for Each Application in the Market Forecast
  • CAES Average Duration of Discharge by Technology, World Markets: 2013-2023
  • CAES Cumulative Installed Capacity by Region, World Markets: 2013-2023
  • CAES New Installed Capacity by Region, World Markets: 2013-2023
  • CAES Cumulative Installed Capacity by Application, World Markets: 2013-2023
  • CAES New Installed Capacity by Application, World Markets: 2013-2023
  • CAES Cumulative Installed Capacity by Technology, World Markets: 2013-2023
  • CAES New Installed Capacity by Technology, World Markets: 2013-2023
  • New CAES Annual Growth by Region, World Markets:2013-2023
  • New CAES Annual Growth by Technology, World Markets: 2013-2023
  • CAES Cumulative Installed Capacity by Application, North America: 2013-2023
  • CAES New Installed Capacity by Application, North America: 2013-2023
  • CAES Cumulative Installed Capacity by Application, Europe: 2013-2023
  • CAES New Installed Capacity by Application, Europe: 2013-2023
  • CAES Cumulative Installed Capacity by Application, Asia Pacific: 2013-2023
  • CAES New Installed Capacity by Application, Asia Pacific: 2013-2023
  • CAES Cumulative Installed Capacity by Technology, North America: 2013-2023
  • CAES New Installed Capacity by Technology, North America: 2013-2023
  • CAES Cumulative Installed Capacity by Technology, Europe: 2013-2023
  • CAES New Installed Capacity by Technology, Europe:2013-2023
  • CAES Cumulative Installed Capacity by Technology, Asia Pacific: 2013-2023
  • CAES New Installed Capacity by Technology, Asia Pacific: 2013-2023
  • CAES New Installed System Revenue by Region, World Markets: 2013-2023
  • CAES New Installed System Revenue by Technology, World Markets: 2013-2023
  • CAES New Installed System Revenue by Technology, North America: 2013-2023
  • CAES New Installed System Revenue by Technology, Europe: 2013-2023
  • CAES New Installed System Revenue by Technology, Asia Pacific: 2013-2023

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