Overview April May 2005

The Iowa Stored Energy Plant: 

The Iowa Stored Energy Plant A Project Review and Update May 2005 Bob Haug, Executive Director Iowa Association of Municipal Utilities

Iowa Association of Municipal Utilities (IAMU): 

Iowa Association of Municipal Utilities (IAMU) IAMU members include 550 Iowa cities 550 municipal water utilities 136 municipal electric utilities 50 municipal gas utilities 27 municipal telecommunications utilities The Iowa Stored Energy Plant (ISEP) is an IAMU power supply project funded by 109 municipal utilities located in Iowa, Minnesota, and the Dakotas.

The Iowa Stored Energy Plant (ISEP): 

The Iowa Stored Energy Plant (ISEP) 3 Proven Technologies 1. Renewable wind energy 2. Aquifer storage of gas 3. Combustion turbine

1. Iowa and municipal wind energy: 

1. Iowa and municipal wind energy

Distributed wind project - Algona: 

Distributed wind project - Algona 3 turbines (750 kW each) Jointly owned by 7 communities Located within host utility’s distribution system

2. Aquifer storage of gas: 

2. Aquifer storage of gas

Gas storage: 

Gas storage

3. Combustion turbine (simple cycle): 

3. Combustion turbine (simple cycle) Natural Gas 12,000 BTU/kWh Air Air Compressor Turbine Generator Combustor

The Alabama CAES plant: 

The Alabama CAES plant Alabama Electric Cooperative McIntosh Power Plant Aerial View

CAES drive train (Dresser Rand): 

CAES drive train (Dresser Rand) Motor/ Generator and Combustion Turbine --------- Motor/Generator and Compressor Train 

Mechanics of CAES – storage: 

Mechanics of CAES – storage Air Air Compressor Turbine Motor/ Generator Combustor Aquifer Clutch

Mechanics of CAES – generation: 

Mechanics of CAES – generation Natural Gas 3,800 BTU/kWh Air Air Compressor Turbine Motor/ Generator Combustor Aquifer Clutch

Mechanics of CAES – reliability/performance: 

Mechanics of CAES – reliability/performance CAES uses well-proven and highly reliable equipment (common used in petroleum refining) Reliability (from Alabama operation) Average 218 starts per year (1996-2001) 90% starting reliability; >97% running reliability Quick start capability (Alabama 110 MW unit) 9 min. to full power or 6 min. emergency startup

Mechanics of CAES - performance: 

Mechanics of CAES - performance Efficiency of operation CAES uses 4,300 BTU/kWh vs. 12,000 BTU/kWh for simple cycle turbines and 7,000 BTU/kWh combined cycle units Operates efficiently from 10% to >100 output Economically efficient in 100-130 MW increments Lower temp. (1,600°F vs. 2,200 °F) = longer service life 60% lower emissions than GT Low hot-weather capacity degradation CAES is ideal for delivering ancillary services

Integrating wind and CAES: 

Integrating wind and CAES Wind is low-cost generation source Wind is not dispatchable CAES provides a battery for wind CAES/Wind is dispatchable as an intermediate resource and is very flexible in meeting changing capacity needs

Slide16: 

Electric Power Substation at CAES Power Plant CAES Power Plant Operation During Energy Storage or Compression Phase Wind Generation Used to Compress Air No Extra Grid Power Used TAW 7/18/2002 Power Flow Air Flow Local Wind Farm Underground Aquifer Compressed Air Storage 50 MW 50 MW 0 MW

Slide17: 

Electric Power Substation at CAES Power Plant CAES Power Plant Operation During Energy Storage or Compression Phase Wind Generation Used to Compress Air And Supplemental Off-Peak Grid Power Also Used TAW 7/18/2002 Air Flow Underground Aquifer Compressed Air Storage 50 MW 25 MW 75 MW Local Wind Farm

Slide18: 

Electric Power Substation at CAES Power Plant CAES Power Plant Operation During Energy Generation Phase CAES Power Plant Generates Power to Supplement and Firm Up Wind Farm Output TAW 7/18/2002 PWind Air Flow Underground Aquifer Compressed Air Storage PCAES 20 MW 100 MW 80 MW Local Wind Farm

Slide19: 

1.10 Tons of CO2 / Mwh for Lousia

December 5, 2001: 

December 5, 2001

Why consider carbon costs?: 

Why consider carbon costs? Because it is the right thing Fuel diversification is needed to hedge cost of emissions – Keoto or not – a carbon tax or equivalent offset at $15/ton adds $17/MWH from coal vs. $4/MWH CAES Other emission reductions likely, e.g., SOx particulates, Mercury, others?

400,000 years of C02 and Temperature DataRecent Observed and Predicted Change: 

400,000 years of C02 and Temperature Data Recent Observed and Predicted Change “Business as Usual” 2002 Doubling Scenario (550 PPM) 1800 2100 CO2 °C

Summary case for ISEP: 

Summary case for ISEP For us, it is a local option for dealing with climate change. It keeps money in the state. Supported by customers Very clean plant (local emissions) Uses Iowa’s most abundant indigenous energy resource, wind power, to mitigate GHG emissions Supported by farmers who receive rents for wind turbines and for gas storage

Summary case for ISEP: 

Summary case for ISEP Meets need for intermediate generation with option for base load later Good hedge against environmental costs for GHG and other emissions Diversifies generation & fuel resources Adds renewable resources Gas storage under further study

Where things stand: 

Where things stand Municipal utilities have spent about $800,000 to date Plant studies: Burns & McDonnell preliminary cost study complete, DOE-funded Black & Veatch market analysis complete and highly positive Underground Aquifer Storage: Site selection process well underway Transmission: initial studies complete; additional analysis to begin soon

DOE funded studies (initial $136,000 funding): 

DOE funded studies (initial $136,000 funding) Independent verification of aquifer suitability Subcontractor: Fairchild & Wells, Inc. (Houston) Scope: Review of data from prior investigation of site as gas storage facility, subsequent well logs, ISEP seismic data, and other geological information Finding: Adequate storage for CAES, though some reduction in previously estimated storage capacity Status: Task complete

DOE funded studies (continued): 

DOE funded studies (continued) Assessment of suitability for two-gas storage Subcontractor: Fairchild & Wells, Inc. (Houston) Scope: Review of data from prior investigation of site as natural gas storage facility, subsequent well logs, AVO seismic data collected by ISEP, and other geological information Initial finding: vertical communication between aquifers appears to limit two-gas option Status: Limited negative assessment complete

DOE funded studies (continued): 

DOE funded studies (continued) Power market forecast Subcontractor: Black & Veatch Scope: Forecast of 20-year market clearing price for electricity in Iowa Status: Complete

DOE funded studies (continued): 

DOE funded studies (continued) Production cost modeling Subcontractor: Black & Veatch Scope: Modeling of CAES plant marginal dispatch costs and operating constraints Status: Complete and very positive

DOE funded studies (continued): 

DOE funded studies (continued) Financial pro forma analysis Subcontractor: Black & Veatch Scope: Pro forma analysis to determine return on investment, as measured by projected cash flows, net present value, and internal rate of return. Status: Complete and very positive

What’s next?: 

What’s next? DOE contracts for over $1.4 million in additional studies are nearly complete Participants submitting letters of intent Find non-muni participants, if needed Plant start-up = 3 years from final approval