"You need bulk storage to support all the renewables, and CAES is pretty much the only technology to do that," said Jim Heid, vice president at Dresser-Rand Group, a supplier of compressed air products. "It's a worldwide phenomenon because of all the intermittent renewables coming online." The mechanics are simple. Electricity from wind turbines and solar panels run compressors that fill man-made caverns also used for natural gas storage. When the pressurised air is released, it drives turbines that provide clean power when the sun doesn't shine and the wind doesn't blow. In less than a decade, annual investment in compressed air will be almost $US5 billion, according to Navigant Research. That will support more than 11 gigawatts of installed capacity and help renewable power developers match demand with supply. Competition is stiff. Along with batteries, developers are using everything from vats of molten salt to rooftop tanks filled with ice to store energy, a market Navigant sees expanding about 35-fold by 2024 from $US605.8 million this year. Even supporters acknowledge that air storage must improve. The systems return only about 60 per cent of the power used to fill caverns, according to Dresser-Rand.

"When you put in one unit of energy, you want to get one unit out," said Sam Shelton, senior fellow at the Strategic Energy Institute at the Georgia Institute of Technology. "Air is not very dense, so compression storage is low efficiency. It's all economics." Advancements in technology will boost efficiency and eliminate the need to heat the pressurised air with natural gas, reducing carbon dioxide emissions. Developers are improving above-ground vessels for smaller-scale applications. "Overall it's a market that has a couple of niches," said Brian Warshay, an analyst with Bloomberg New Energy Finance in New York. "A lot depends on the location and the proximity to demand." Two years ago, California regulators asked the state's three biggest utilities to add 1.33 gigawatts of energy-storage capacity by 2020 -- about 20 percent more than currently exists in the world, excluding pumped hydropower systems. Spain's Abengoa is developing a solar-thermal project in California that will incorporate power storage. Ice Energy Holdings, a Santa Barbara, California-based company, is pioneering a storage method using rooftop ice to provide cooling during the day.

The Greek inventor Ctesibius wrote studies on the science of compressed air in the third century BC. The technology was used in an alarm clock and a cannon that shot arrows; it was also used to open the gates at the Temple of Alexandria. Thanks to its scale, compressed air storage today solves the problem of how to store wind power at night, when demand for electricity slumps, and solar power for cloudy days. Compressed air can store hundreds of megawatt hours of electricity for weeks at a time. Batteries are useful for smaller volumes for shorter periods, said Rocco Vita, director of emerging technology at pipeline company Enbridge, which operates solar and wind farms across North America. Chamisa Energy, based in Santa Fe, New Mexico, is seeking to raise about $US400 million to build a compressed air project in the Texas Panhandle that can store wind energy at night and release it when turbines are still. "We're surrounded by some of the best wind in the U.S. and the wind often blows in the off-peak," said Alissa Oppenheimer, managing director at Chamisa. "There are numerous times of the day when the price of wind is negative."

Investors, who may not understand the advantages of the technology or are concerned that air storage systems are inefficient, have been slow to commit, Oppenheimer said. Dresser-Rand built one of the world's two commercial compressed air systems in Alabama in 1991 and is currently working on other projects in Texas, said Heid. In Alabama, Power South Energy Cooperative's 110-megawatt system stores enough energy from nearby power plants to power 110,000 homes. The world's first commercial application of the technology was in Germany in 1978 with a 290-megawatt plant. In Canada, Ontario's grid operator wants to add 16 megawatts of storage, including CAES, to cope with a supply surge from wind turbines and solar panels. NRStor Inc., which is bidding for the contract, expects the efficiency and cost of air storage to improve. Were Ontario to add 1,000 megawatts of compressed air storage, consumers would save C$US8 billion ($US6.6 billion) over 20 years, said NRStor Chief Executive Officer Annette Verschuren. With the system she's proposing, stored air could turn turbines for as long as 300 hours. "Ontario has really built up a lot of renewable energy and is building up a lot more surplus energy," Verschuren said. "We would capture the night stuff, capture the weekend stuff and put the energy on the grid during daytime."

NRStor sees the price of compressed air systems falling fall to one-tenth that of the expected $US350 a kilowatt hour cost of battery storage in 2022, said Verschuren. She declined to say how much the Ontario project will cost. Bloomberg