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Iowa utilities still learning lessons from stored energy facility
Every class has one—a quiet, hard-working student who passes up football games and parties to study, and surprises classmates years later with great business success. Members of the Iowa Association of Municipal Utilities probably felt a like that dark horse kid when IAMU and the Iowa Stored Energy Park Agency recently announced that a long-delayed compressed air energy storage project is now moving forward. After four years of fits and starts, IAMU could be forgiven for thinking that a powerplant that runs on stored wind energy was just too good to be true. The many potential benefits to Iowa utilities, consumers and communities were the reason IAMU first decided to build the Iowa Stored Energy Park in 2003. According to an agency press release, ISEP will enhance the value of wind and other resources while conserving fossil fuels, controlling electricity costs, creating jobs and providing environmentally friendly power. So even after an early study showed that the original Fort Dodge, Iowa, location was unsuitable for a variety of reasons, IAMU didn't give up. "The subcommittee in charge of the project had to step back and start the search for a site all over again," recalled ISEPA Development Director Kent Holst. Enlisting the aid of the Iowa Geological Society, IAMU screened more than 20 underground caverns. Only three emerged as possibilities, and two of those didn't make the cut for geological reasons. "A reservoir has to have a cap rock formation to seal in compressed air," explained Holst. Facility design creates specific needs The final site, just west of Dallas Center in central Iowa, appears to have all the requirements. The reservoir is deep and wide enough with the right kind of rock for ISEP's unique technology. ISEP will be the first CAES facility to use a porous sandstone layer far under the earth's surface to hold the compressed air. The other two operating CAES facilities—in Alabama and Germany—store compressed air in salt and use pre-existing underground mines. At ISEP, wind power and other low-cost resources will be used to pump air into the sandstone, displacing water in a limited and carefully controlled area to form a "bubble." The air will remain in place as an underground reservoir of stored energy. Wells tapped into the reservoir will allow the air out when needed to provide electricity. "So you can see, we had very specific geological needs," Holst said. The site's location, within 30 miles of downtown Des Moines, is good from an economic development point of view. It is not, however, in the best wind area in a state that ranks third nationally for its wind resources. The original ISEP plan called for building a 75- to 100-MW wind farm near the storage site. Now the wind power will have to come from a remote site. That may mean building an agency-owned wind farm or contracting with a private company to supply the wind power. "The next two studies ISEPA plans will look at our best options for addressing transmission and interconnection issues," said Holst. When one door closes, though, another one opens. "The new storage location is connected in one direction to the Midwest Independent Transmission System Operator," said Holst. "There may be opportunities to buy and sell energy with MISO—but that's a subject for another study." Stand-alone agency streamlines management From its early experiences, IAMU learned to thoroughly investigate all options before ruling any out, but Holst said that other types of renewable generation are not under consideration. "Not for running the compressors, at least. Sandia [National Laboratories] is doing research on using biofuels—ethanol or biodiesel—to replace some of the natural gas," he said. "That's a very popular idea here in Iowa." IAMU also learned that there was an easier way to manage the project for the participating utilities. Under Section 28E of the Iowa Code, two or more agencies are able join together to form a separate government body to provide a new service. "We formed ISEPA as a 28E organization, a stand-alone entity that can handle contracting and other legal aspects of development," explained Holst. ISEPA represents the more than 130 municipal utilities involved in the development of the project. The initial ownership/investor arrangements has not been established yet, but is expected to be finalized this summer. "We feel strongly that the facility can succeed as a municipally-owned project," Holst stated. Time table laid out The design phase would begin some time after that, and financing details should be in place by May 2009. The U.S. Department of Energy has supported the project financially with $2.9 million in funding, and with technical assistance from Sandia. IAMU member utilities and surrounding states will cover the rest of the cost. The agency hopes to be generating 268 MW by summer 2011. "It has to be that big to get the economy of scale," Holst said. "You can't spread the development of the storage field around, the way you could with some other types of powerplants." Above-ground plans for the park include a building designed to meet the highest standards for environmental protection and showcase the latest equipment and technology. There will be a welcome center to give consumers the opportunity to learn about wind energy, energy storage and Iowa's role in maintaining the country's energy supply. Estimated savings reward participants Once operating, ISEP will contribute to a mix of energy resources supplying cities and utilities participating in the project. IAMU anticipates that most ISEP customers will continue to use conventional generation—mainly coal-fired steam powerplants—to serve their baseload needs. Energy from ISEP will be a mid-range, or "intermediate," power source. Studies have shown that is the area with the most urgent need for utilities. ISEPA estimates that CAES plus wind energy from the facility could account for 20 percent of a typical Iowa municipal utility's yearly energy use, and could save cities and their utilities as much as $5 million annually in purchased energy. The cost of energy from ISEP CAES facilities has been estimated at $65 per megawatthour. That is a significant success for a group of admitted novices to power project development. "None of the participants have been involved in building a major powerplant," Holst confirmed. "It has been a learning curve all the way, but there are a lot of knowledgeable people out there who are willing to share their expertise. And, of course, you have to do extensive diligence at every stage," he added. Spoken like a good—and determined—student. |
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