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NYSEG Chooses Not to Move Forward With Compressed Air Energy Storage Project

Rochester, NY – NYSEG, a subsidiary of Iberdrola USA, has informed the U.S. Department of Energy that it will not move forward with a compressed air energy storage (CAES) project in the Town of Reading (Schuyler County).

“We appreciate the opportunity to have collaborated with the DOE and the National Energy Technology Laboratory on this important study, and we thank the New York State Energy Research and Development Authority (NYSERDA) for its support,” said Mark S. Lynch, president of NYSEG and RG&E. “We believe that the body of technical work developed during the course of this study will be of value to others who may be evaluating CAES technologies.”

Upon completion of comprehensive engineering and financial evaluations, NYSEG determined that a number of site-specific issues, including the cost of site development, and energy market conditions, including the effects of inexpensive natural gas-fired generation on market prices, make the project at the Town of Reading site uneconomical.

In November 2010, NYSEG announced the start of the engineering and financial evaluations of compressed air energy storage at the site following the execution of a $29.6-million Cooperative Funding Agreement with DOE as part of the agency’s Smart Grid Demonstration Program. In April 2011, NYSEG received a $1 million grant from NYSERDA for the project.

How Compressed Air Energy Storage Works
Compressed air is pumped into a depleted underground salt cavern using low-cost, off-peak electricity to power the compressors. The compressed air from the cavern is then released to spin a turbine and generate electricity as needed, particularly during times of high customer demand.