Why compressed air energy storage is key to a sustainable UK energy system
What is compressed air energy storage? The case for AACAES in the UK energy transition
Compressed air energy storage (CAES) is quickly becoming recognised as a key component in the shift toward renewable energy. As the demand for efficient, scalable energy storage grows, CAES stands out as a sustainable, adaptable, and cost-effective option. But how does compressed air energy storage work, and why is it particularly suited to meet the energy needs of the future?
At Sherwood Power, we believe our advanced adiabatic compressed air energy storage (AACAES) system provides answers to some of the most pressing challenges in the renewable energy transition. With a unique heat capture technology and exceptional scalability, AACAES is designed for industrial and commercial clients alike, making it a powerful tool for stabilising energy grids and lowering energy costs. Here’s how we see it transforming energy storage.
The rising demand for efficient energy storage
To support the growth of renewable energy sources like wind and solar, we need solutions that can bridge the gap between times of peak production and peak demand. In the last two years UK grid balancing costs have doubled from £1.5 billion to £3 billion a year. Globally grid balancing costs exceed € 50 – 55 bn annually. And it’s rising every year.
This expense isn’t just about money; it reflects the enormous challenges of an ageing grid infrastructure that wasn’t built for variable power sources.
“Energy storage is essential to overcoming grid instability,” says Alex Hunter, CEO of Sherwood Power. “Without solutions that allow us to store excess renewable energy and use it later, the system will break down.”
Batteries and other traditional storage options bring their own issues, such as limited life cycles, high production costs, and reliance on metals like lithium and cobalt (which bring with them a range of issues). In contrast, CAES stores energy as compressed air, avoiding the resource strain and environmental impact of battery production. Compressed air energy storage, especially our AACAES system, offers a cleaner, longer-lasting alternative.
How compressed air energy storage works: the Sherwood Power approach
Traditional CAES systems store energy by compressing air, which is then kept in storage until it’s needed. When demand rises, the air is released, driving a generator to produce electricity. Sherwood Power’s AACAES design takes this a step further by retaining 99% of the heat generated during compression – a feature that significantly improves efficiency.
“With our heat capture technology, AACAES operates at around 80% efficiency, a major step up from other CAES and battery systems,” Hunter explains. “And unlike batteries, which lose capacity over time, AACAES has a much longer life span, lasting over 25 years.”
Not only does this approach reduce the need for materials with their own environmental impact, it also ensures a more stable, predictable cost structure. For industrial and commercial users, AACAES provides a Levelised Cost of Storage (LCOS) of £0.10 per kWh, which is significantly lower than many traditional battery solutions. This makes it an attractive option for long-term energy management.
Addressing grid infrastructure challenges with compressed air energy storage
The traditional approach to grid stability has relied on expanding infrastructure – laying new cables, building substations, and upgrading old systems. However, these projects take time and come at enormous expense, often taking 15 years or more to complete. Compressed air energy storage systems like AACAES, however, provide an alternative that’s less dependent on new infrastructure.
AACAES allows surplus renewable energy to be stored when demand is low and then released during peak times. By balancing supply and demand, this system reduces strain on the grid, cutting back on the need for new infrastructure and helping stabilise electricity costs for consumers.
Flexibility on the demand side is key to making energy efficient: without it, extra generation capacity has to be built, to cope with low wind and solar days. When wind and solar supply rises, these generators then have to be switched off. This is a wasted capital investment; it also increases the long-term operational costs associated with managing over-generation.
As Alex Hunter puts it, “The renewable energy transition is at risk. Current grid infrastructure is not designed for variable renewable energy supply and demand models. We need storage options that facilitate the balance between supply and demand and actually alleviate grid congestion.”
A scalable and sustainable choice for renewable energy
CAES systems, particularly advanced models like AACAES, are built to be flexible. Traditional storage solutions like lithium-ion batteries rely on specific minerals, which can be costly, geographically limited, and environmentally challenging to source. In contrast, AACAES uses air, a resource that’s abundant and free from the toxic waste associated with battery disposal.
“Compressed air energy storage works for any setting, urban or rural,” says Hunter. “Whether it’s a logistics centre, a commercial building, or a data centre, AACAES can be installed where it’s needed, without the geographic constraints that limit other systems.”
This flexibility also extends to the system’s storage capacity. AACAES can be scaled from 1 MWh to 1,000 MWh, allowing it to serve everything from small businesses to large industrial sites. This level of scalability, combined with the system’s low environmental impact and long operational life, makes AACAES an ideal choice for those looking to integrate reliable, renewable energy storage into their operations.
Why compressed air energy
storage is a smart investment
Given the current challenges facing energy providers globally, sustainable, long-term solutions must be a priority. Compressed air energy storage, and AACAES in particular, offers significant cost savings over the lifetime of the system. Its low operational cost, long life span, and flexibility make it an excellent option for companies looking to lower energy costs while supporting their sustainability goals.
“When you look at the cost per kWh and the life span of our system, AACAES is simply more cost-effective than other compressed air energy storage systems,” Hunter states. “It’s designed to keep running efficiently year after year, making it a practical choice for any business looking at its long-term energy strategy.”
Investors, policymakers, and decision-makers are increasingly looking for energy solutions that are not only scalable but also aligned with broader goals for decarbonisation and sustainable development. As the energy landscape shifts, Sherwood Power’s AACAES system offers a way to support this transition without relying on costly new infrastructure or finite imported resources.
Investing in the future of compressed air energy storage
The shift to renewable energy is here, and as we move forward, the need for efficient, scalable, and sustainable storage solutions will only grow. Compressed air energy storage, and especially Sherwood Power’s AACAES system, has the potential to meet this demand, helping businesses, governments, and the energy sector as a whole reduce costs and improve grid resilience.
For the investment community, the decision to back compressed air energy storage is an investment in the future of energy stability and sustainability. With Sherwood Power’s technology, we have a unique opportunity to support a clean energy transition in a way that’s practical, reliable, and ready for the demands of the modern world.