When it comes to energy storage...If you're talking big hours and big megawatts, if you're going to be moving a lot of low cost night time energy to daytime, if you're talking hundreds of megawatts...

Then you really only have two choices, Pumped Hydro or Compressed Air Energy Storage (CAES) according to EPRI, the Electric Power Research Institute.  Lithium-ion might be good for cells phones and maybe EVs.  Flywheels for short bursts of storage.  New technologies like flow batteries are emerging but they're still a ways from utility-scale prime time cost requirements.  Pumped hydro is very site-specific and very little new pumped hydro sources have come on line in the last decade.  

That leaves you with CAES.  According to EPRI's energy storage expert, Rich Lordan, "CAES is going to be important."

In the middle of the night when the price of electricity is low, utilities can run compressors and pump air into a cavern or vessel at 750 psi.  When the price of electricity goes up - the compressed air is preheated (with a natural gas fired burner) and the air is then used to help power a turbine.  In EPRI's view, the technology is moving from diabatic to adiabatic where the heat lost during compression is stored and used for preheating -- eliminating the need for natural gas pre-heating.   

A few CAES demonstration projects have recently received or are slated for government funding:

  • New York State Electric and Gas (NYSEG) is working on a CAES project in a salt cavern in upstate New York 
  • Pacific Gas and Electric (PG&E) is looking at a 300MW CAES project in Kern county.  DOE and PG&E are still working on the details and site information.

CAES is relatively low efficiency but prices out at about $1000 per kilowatt of storage - compared to about $3000 per kilowatt for lead acid battery storage (price estimates according to EPRI).

A few more links on utility-scale energy storage: