Iowa’s municipal utilities announced plans Friday to build a $200 million power plant west of Dallas Center that will store wind energy in the ground and use it to generate up to 268 megawatts of electricity.
The announcement is a culmination of more than four years of study and research by the Iowa Association of Municipal Utilities and others, although operation of the plant is still several years away.
Construction would begin in 2009 with completion expected in 2011, said John Bilsten, general manager of Algona Municipal Utilities and vice president of the newly formed Iowa Stored Energy Park Agency.
Only two similar wind storage plants are in existence, one in Germany and the other in Alabama. Both are about half the size of the plant planned for Dallas County, Bilsten said.
Financing would be similar to methods used to build other utility power plants. The agency would pre-sell contracts to municipal utilities and others interested in buying the power and then use those contracts to sell bonds to provide the money needed to cover construction costs, Bilsten said.
The site is roughly 40 acres of farmland located between U.S. Highway 169 and Dallas Center. Roughly 3,000 feet below the farmland is a porous rock structure that extends for about a mile or more and has the capacity to hold compressed air pumped into the ground. It is the key to the storage facility.
Backers of the project had originally considered sites with similar geological properties in the Fort Dodge area, but decided the Dallas County rock formations would work better.
The Dallas County site has not yet been purchased, but landowners in the area are agreeable to the location, Dallas Center Mayor Mitch Hamilton said at Friday’s news conference announcing the project.
Bilsten described how the project will work:
Electricity will be generated by wind energy farms at remote sites and will be carried by transmission lines to giant compressors at the storage site. The compressors will pump air into the ground, where it will be stored under pressure in the porous rock. The pressure is created by displacing air that is already in the rock. Air is contained within the rock by a surrounding solid rock cap.
The air can be converted back into electricity by releasing the pressure and allowing the air to drive turbines that create electricity.
The project would employ 300 to 400 workers during construction and create about 20 to 40 permanent jobs. The permanent jobs would be skilled jobs with good pay, Bilsten said.
The 268-megawatt capacity of the plant is more than twice the size of the 111-megawatt plant that serves Ames, which has more than 50,000 residents and more than 18,000 households.
As many as 130 municipal utilities in Iowa and surrounding states have expressed interest in the energy storage project, Bilsten said. The Iowa Association of Municipal Utilities spearheaded the effort, creating the Iowa Stored Energy Park Agency in 2005.
The U.S. Department of Energy provided $3.5 million in research grants for the project, while Iowa municipalities have kicked in about $800,000 for research, Bilsten said.
The DOE is not expected to provide money for plant construction, he said. The utilities will pay for that on their own.
MidAmerican Energy, which has the largest wind energy operation in the state, could become a partner at some point, he said.
The key to the success of the storage plant will be how much the Iowa Stored Energy Park charges for electricity, two industry experts said.
The basic technology that the Dallas County park would use has been around for some time, said Jesse Broehl, editor of Windpower Monthly magazine in Los Angeles.
The reason there are only two wind storage facilities in the world, he said, is that up until now it has not been cost-effective to store wind in the ground and bring it back out later to generate new electricity.
Bilsten said it is too early to estimate the price of energy that would be generated by the Dallas County plant four years from now. But he said the intention is that the plant would be able to store energy from wind turbines located as far away as 100 to 200 miles from the plant and resell it later at a market rate.
The generating plant will run on a combination of compressed air, which is stored in the ground, and another fuel, which could be natural gas or a biofuel, such as crop waste, Bilsten said.
“It’s a very good thing to have projects that include storage, but it is important to understand that wind can contribute a large share of the electricity supply without dedicated storage, as is happening in Europe,” said Christine Real de Azua, spokeswoman for the American Wind Energy Association.
“The ultimate issue is the cost per kilowatt hour,” de Azua said, and storage facilities increase that cost.
Business Editor David Elbert can be reached at (515) 284-8533 or email@example.com