Compressed air energy storage (CAES) is a way to store energy generated at one time for use at another time using compressed air. At utility scale, energy generated during periods of low energy demand (off-peak) can be released to meet higher demand (peak load) periods. Small scale systems have long been used in such applications as propulsion of mine locomotives. Large scale applications must conserve the heat energy associated with compressing air; dissipating heat lowers the energy efficiency of the storage system.
Compression of air creates heat; the air is warmer after compression. Expansion requires heat. If no extra heat is added, the air will be much colder after expansion. If the heat generated during compression can be stored and used during expansion, the efficiency of the storage improves considerably. There are three ways in which a CAES system can deal with the heat. Air storage can be adiabatic, diabatic, or isothermal.
Adiabatic storage continues to keep the heat produced by compression and returns it to the air when the air is expanded to generate power. This is a subject of ongoing study, with no utility scale plants as of 2015, but a German project ADELE is planning to bring a demonstration plant (360 megawatt hours storage capacity) in to service in 2016. The theoretical efficiency of adiabatic storage approaches 100% with perfect insulation, but in practice round trip efficiency is expected to be 70%. Heat can be stored in a solid such as concrete or stone, or more likely in a fluid such as hot oil (up to 300 °C) or molten salt solutions (600 °C).