NPPD seeks to add innovative energy solution to generation portfolio

October 26, 2011

Columbus, Neb. – NPPD takes pride in using a variety of fuels to generate electricity, including coal, uranium, water, wind, natural gas, and solar. But what about compressed air? Could that be an energy source of the future? NPPD believes it could.

Today, NPPD signed an agreement to purchase certain gas storage leases and related rights from KEBRH Operating, LLC, owner and operator of the Big Springs Gas Storage Unit in Deuel County, Neb. west of Ogallala. The agreement will enable NPPD to test what could be a future, compressed air energy storage facility, if the location proves suitable for such an operation.

Over the next six to eight months, NPPD will develop an air injection, test plan to determine the viability of using the Dakota sandstone formation as a compressed air energy storage facility and energy resource. The plan will determine testing costs, what type of equipment should be used to conduct the test and inject the air, how long will it stay compressed and the rate at which it can be compressed and withdrawn. NPPD expects the test could take 6-12 months to complete.

Information obtained from the air injection test would be used to design a future compressed air energy storage facility, if the project is determined to be beneficial for NPPD and its customers.

In October, NPPD’s board of directors approved negotiating the agreement and developing the test plan. Once complete, the Board will review the projected costs for testing the location’s capabilities as a compressed air storage unit and make a determination about moving forward with the air injection test.

The natural gas storage reservoir was identified by NPPD as a geological formation that could handle sufficient pressure, support the injection of air, and produce good air withdrawal rates. The air would then be used to generate electricity when needed at a later time.

Natural gas is currently stored in the sandstone 3,000 feet below the surface. The sandstone serves as a sponge, storing the gas, most of which has been depleted. KEBRH will continue to remove the remaining recoverable gas from the unit, a process that could take several years to complete.

NPPD will conduct the air test to determine the maximum quantity and pressure of stored air the unit can hold. Neither the size of the compressed air energy storage facility nor the amount of electric production can be determined until this test is complete, but NPPD is hopeful the facility could represent more than 100 megawatts of capacity.

“If feasible as a compressed air energy storage unit, the unit could serve as an alternative energy resource for NPPD’s generation mix,” said Senior Generation Strategies Engineer Mike Matheson.  “Electricity from off- peak periods would operate compressors that pump compressed air into the geological formation through injection wells and store it until needed. The air is then withdrawn to serve as the fuel source for powering an air turbine to generate electricity.”

There are currently two, primary, grid-scale technologies used to store energy a) pumped hydro storage and b) compressed air energy storage. NPPD has studied pumped hydro storage, but it is far more expensive compared to the estimated $1,200 – $1,300 per kilowatt in capital costs to construct a compressed air energy facility. In addition, the scale and flexibility of such a resource fits better with NPPD’s system.

“Pursuing this project reflects NPPD’s commitment to studying new energy technologies,” said NPPD President and CEO Pat Pope. “If commercially viable, the facility could benefit NPPD’s in-state ratepayers as an additional generation resource and be one of three, commercial-scale CAES facilities in operation worldwide, joining one in Germany and a second in Macintosh, Ala.”

NPPD is participating in the Electric Power Research Institute Compressed Air Energy Storage Pilot Project. The project is currently being funded by NPPD’s Domestic Energy Research and Application Initiative.

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