Abstract

Some of the existing natural gas pipelines in Chile are underutilized; thus, these reservoirs could be utilized as Compressed Air Energy Storage (CAES) systems taking advantages of fluctuations in the price of electricity related to the entrance of renewable energy sources in the electrical market. A thermodynamic and economic-optimization of CAES system using existing gas pipelines under different operating conditions is performed. Substations located in the proximity to existing gas pipelines are assessed as possible CAES locations. Throughout the day, the CAES system compresses air, charges the pipeline by buying energy during low prices, and expands the air, discharging the pipeline by selling energy when prices are high. One of the Northern substations (Taltal) shows the best results where more of the photovoltaic power plant are located; consequently, CAES is more profitable when high difference in marginal cost is present along the day, which happens on grids with high renewable share. Therefore, the daily variations of marginal costs should be a key parameter decision to operate the CAES plant. With higher marginal costs fluctuations throughout the day, CAES systems should become more attractive economically. (C) 2019 Elsevier Ltd. All rights reserved.