General Compression Raises $20M for Air Energy Storage

Updated: The next-generation of technology to use compressed air for energy storage is on its way. One of the companies leading the way — General Compression — has raised a $20.39 million Series B round, according to a filing. Update: General Compression officially announced this funding about a week after this post, and said it’s the first part of a $54.5 million round, and was led by Northwater Capital Management, US Renewables Group, Duke Energy, and Serious Change.
Compressed air is a decades-old technology which takes excess energy from a power plant or renewable energy project and uses it to run air compressors, which pump air into tanks or underground caverns where it’s stored under pressure. When the air is released, it powers a turbine, creating electricity. Essentially, compressing and storing the energy acts like a battery for a utility, which can pair the energy storage tech with variable clean power, like wind, which only blows at certain times.
There’s only a handful of compressed air energy storage projects in the world, including one in Alabama and one in Germany, but startups like General Compression are working on next-generation technology, building pilot projects and moving toward commercialization. SustainX is another company working on this technology and moving toward commercial-scale projects.
General Compression announced it was raising a $17 million Series A round in February 2010, and close to $10 million back in 2007. Previous investors include US Renewables Group and Duke Energy (s duk), and the company also received a $750,000 grant from the Department of Energy’s high-risk, early-stage, ARPA-E program. General Compression’s two Series A filings add up to $14.25 million in funding, so a small part of this Series B round could have been included back in that February 2010 announcement. (I’ll update this post when I hear more).
According to previous press releases from General Compression, the company intended to build and install its first storage unit in 2010, and its first commercial-scale project in 2011. I’m also waiting to hear back from General Compression on more details of its funding and progress. Update: General Compression says its first project is currently under construction in Texas with partner and investor ConocoPhillips. The company says its technology has a 70- to 75-percent round-trip efficiency, and because the units can respond in less than 30 seconds and cycle between compression and expansion quickly, they can be used to back up wind farm power.
SustainX CEO Thomas Zarrella and founder Dax Kepshire told me in March that by the middle of next year, the company will start construction on a one MW compressed air energy storage project, likely at a coal plant, in conjunction with power company AES, its first customer. SustainX has already built a 40 kW project at its headquarters in West Lebanon, N.H., which Zarrella said has proven the technology.
To build the pilot, SustainX raised money from RockPort Capital, Polaris Venture Partners, and Angeli Parvi, and recently received attention from GE (s ge) via its Ecomagination Challenge. In late 2009, the Department of Energy awarded SustainX a $5.39 million grant to help it reach that commercialization goal.
SustainX says its secret sauce is in how it uses a water spray to keep the air at a constant temperature through the compression and storing process. In January, the company announced a patent for that technology, and says it holds three patents around its technology. I’m not sure if General Compression uses a similar water technology or not.
If these startups can provide low-cost and useful compressed energy storage for utilities, it would be a major breakthrough. The idea is that compressed air energy storage can be cheaper — over the lifetime of the system — than other energy storage options like batteries. The systems also don’t require potentially toxic chemicals like batteries do, and aren’t site-specific like pumped hydro is (you need a hill).
Image courtesy of SustainX.