Electricity That's Cheaper Than Free
By Marc Gunther on October 28, 2009
In west Texas and Illinois, when the wind blows at night and nuclear plants run around-the-clock, power generators produce more electricity than people need. This oversupply “has forced electricity prices into the negative range,” an expert explains—meaning that some customers are paid to use electricity.
The expert is Terry Boston, and he knows what he’s talking about. Boston is the CEO of PJM, the company that manages the electricity grid that serves 51 million people in 13 mid-Atlantic states and Washington, D.C. It’s not an everyday occurrence but when demand exceeds supply, “cement manufacturing plants can get paid to take electricity,” he says.
One solution to this problem (aside from fixing the incentives) is energy storage, which would deliver other benefits as well. Ever since Thomas Edison invented the light bulb, people have been looking for cost-effective ways to store lots of electricity. One approach is a technology called Compressed Air Energy Storage, or CAES, and Boston came to the National Press Club in Washington to talk it up. He was joined by Stephen Byrd, who is the CEO of a startup company called Energy Storage & Power that is seeking to develop next-generation compressed air storage plants.
Energy Storage & Power is a joint venture of PSEG Global, a $13.3-billion a year New Jersey power generation company and utility, and Dr. Michael Nakhamkin, an energy-storage pioneer who holds patents for the technology and led the design and construction of North America’s only compressed air plant, in McIntosh, Alabama, back in 1991.
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