HOUSTON LIGHTING AND POWER COMPANY EVALUATION OF COMPRESSED AIR ENERGY STORAGE.

Compressed air energy storage (CAES) is a resource being evaluated by Houston Lighting and Power Company (HL&P). CAES technology uses electrical energy generated during off-peak load periods to compress air into an underground cavern or porous strata for storage under pressure. During periods of peak demand, the compressed air is drawn from storage, heated by burning fuel in a combustion chamber, and expanded through a turbine to furnish shaft power to an electric generator. There is underground salt formation suitable for CAES development around HL&P's serivice area. This paper presents the results of a preliminary economic analysis of a 660 MW CAES plant in 1994 in comparison with a coal/lignite plant. Sensitivity analysis was conducted to examine the effect of off-peak charging energy from outside systems and the effect of gas prices. Results indicated that the CAES plant had a benefit to cost ratio of 1. 15 which would be raised above 1. 5 if off-system charging energy at a reasonable price could be obtained. Decreasing gas price would favor CAES in comparison with coal or lignite. The CAES plant in operation would save 5 to 13 million mcf of gas per year.