Compressed natural gas for low-cost electrical energy storage

Sebastiano Giardinella's picture
Sebastiano Giardinella, Vice President - Projects, Ecotek Investments Inc.
Comments: 0

Natural gas now occupies the largest share of total power generation in the U.S. Growing demand for natural gas from the power generation sector also means that electricity and natural gas peak demands tend to converge in some markets.

Renewables plus energy storage has been proposed as an alternative to natural gas peaking plants, and large investment has been made to develop energy storage commercially. For energy storage to be beneficial it must be reliable, efficient and cost-effective. All of these characteristics are present in natural gas infrastructure.

Natural gas networks include most of the components needed to store energy: 1) a means to convert electricity to a form of energy that can be stored (compressors), 2) a means to store the converted energy (natural gas storage fields, pipelines, CNG trailers). With the incorporation of a mature technology (an expander), the energy in the compressed gas can be converted back to electricity.

An expander-generator can be installed at key points in the natural gas network where pressure is reduced: natural gas storage fields, pressure reduction valves, city gate valves. Heaters and treatment are installed where necessary to maintain adequate gas quality and temperature.

Controls are configured between the existing compressors and the new expander. These controls allow the operator to time deposits and withdrawals to maximize economic performance, based on data analytics from electricity and natural gas markets:

  • When electricity prices are lowest, the facility enters into storage mode, ramping up compression rate.
  • When electricity prices are highest (and natural gas prices are favourable), the facility enters into recovery mode, ramping up the expansion rate.

Figure 1 shows an example natural gas storage station converted into a natural gas and energy storage site. In this example, no additional gas treatment was required as the facility already included equipment for this purpose.

Figure 1. Example Natural Gas + Energy Storage plant

Economic performance depends on site-specific factors that should be addressed on a feasibility study. Technical factors include gas composition, operating conditions, existing facilities, storage and local grid, as well as selected project configuration and chosen equipment suppliers. Economic factors include natural gas and electricity market conditions, local costs and incentives.

A typical compressed natural gas + energy storage facility would have a roundtrip efficiency of 55 to 65% and consume less than 1% of the delivered gas. The amount of recoverable energy increases with gas flow rate and pressure ratio, with typical values in the order of 500 kWh/MMSCF for a 4:1 pressure ratio, or up to 1500 kWh/MMSCF for 20:1 pressure ratio.

Total installed costs vary with location, expander type, capacities and conditions. Based on expander power output, they may range between 600 USD/MW to over 1300 USD/MW for power capacities below 50 MW. Based on energy output, they may range between 100 and 350 USD/MWh for energy capacities below 500 MWh. Levelized cost of electricity typically ranges from 0.07 to 0.15 USD/kWh.

For example:

A pipeline operates at an average pressure of 1280 psig, with a city gate valve lowering the pressure to 300 psig. Local demand ranges from 1.7 MMSCF/H to 2.5 MMSCF/H, with the low and peak demand values coinciding with low and peak electricity demand. Local electricity price ranges from 50 to 110 USD/MWh.

A hypothetical expander station replaces the city gate valve, at a cost of 7.0 MMUSD and maximum power output of 5.3 MW. The pipeline is controlled in a manner such that the compression runs on storage mode at approximately 20% above its average flow rate and on recovery mode at approximately 20% below its average flow rate, while the expander follows demand. The pipeline operating pressure thus oscillates between approximately –5 to +5% of its average operating pressure between recovery and storage cycles.

In this example, additional income from electricity sales exceeded 3.1 MMUSD per year, and the project internal rate of return surpassed 30% for a 20-year period.

Other potential benefits and potential impact on the industry

Natural gas networks and electricity grids are increasingly working in collaboration as a result of natural gas’ increasing share of the total generation. Leveraging the existing natural gas infrastructure to provide additional electrical grid services, such as energy storage, can provide further avenues for coordination between both markets.

In states with increasing renewable energy penetration, natural gas storage fields and pipelines can store the excess energy as high-pressure natural gas, and deliver it at peak demand times. This is particularly advantageous for locations where there are electrical grid congestions, as the pipeline can be used to bypass the congestions in transmission networks and deliver electricity near demand centres.

For natural gas network operators, this creates the potential for additional revenues to offset lower seasonal gas price spreads and benefit from other incentives, such as clean peak standards.

Renowned for its quality, breadth and expertise, the Gastech Conference is one not to be missed! Register now to hear the exclusive insights from the world-class leaders.