Compressed air energy storage (CAES) is a way to store energy generated at one time for use at another time using compressed air. At utility scale, energy generated during periods of low energy demand (off-peak) can be released to meet higher demand (peak load) periods. Small scale systems have long been used in such applications as propulsion of mine locomotives. Large scale applications must conserve the heat energy associated with compressing air; dissipating heat lowers the energy efficiency of the storage system.
Compression of air creates heat; the air is warmer after compression. Expansion removes heat. If no extra heat is added, the air will be much colder after expansion. If the heat generated during compression can be stored and used during expansion, the efficiency of the storage improves considerably. There are three ways in which a CAES system can deal with the heat. Air storage can be adiabatic, diabatic, or isothermal.
Adiabatic storage continues to keep the heat produced by compression and returns it to the air as it is expanded to generate power. This is a subject of ongoing study, with no utility scale plants as of 2015, but a German project ADELE is planning to bring a demonstration plant (360 MWh storage capacity) into service in 2016. The theoretical efficiency of adiabatic storage approaches 100% with perfect insulation, but in practice round trip efficiency is expected to be 70%. Heat can be stored in a solid such as concrete or stone, or more likely in a fluid such as hot oil (up to 300 °C) or molten salt solutions (600 °C).
Diabatic storage dissipates much of the heat of compression with intercoolers (thus approaching isothermal compression) into the atmosphere as waste; essentially wasting, thereby, the renewable energy used to perform the work of compression. Upon removal from storage, the temperature of this compressed air is the one indicator of the amount of stored energy that remains in this air. Consequently, if the air temperature is low for the energy recovery process, the air must be substantially re-heated prior to expansion in the turbine to power a generator. This reheating can be accomplished with a natural gas fired burner for utility grade storage or with a heated metal mass. As recovery is often most needed when renewable sources are quiescent, fuel must be burned to make up for the wasted heat. This degrades the efficiency of the storage-recovery cycle; and while this approach is relatively simple, the burning of fuel adds to the cost of the recovered electrical energy and compromises the ecological benefits associated with most renewable energy sources. Nevertheless, this is thus far the only system which has been implemented commercially.