Learn about the PG&E commitment to expanding renewable energy sources and storage technologies

Compressed air energy storage (CAES) is a promising energy storage technology that can lower costs for customers and reduce greenhouse gas emissions through a greater integration of renewable energy sources. PG&E is engaged in a project to explore the use of CAES to power generators during peak periods when the energy is needed most.


Find out why CAES means cleaner energy

We’re committed to reaching California’s mandate of meeting 50 percent of the state’s electricity demands with renewable energy such as wind and solar power by 2030. A key challenge of this ambitious goal is the unpredictable nature of most renewable energy sources. Energy storage, such as CAES, can store energy produced during low-demand times to use during high-demand times and can potentially contribute to grid efficiency, reliability, and may reduce the need to build additional fossil-fueled generation.


Understand the history of our CAES project

Following is an overview of the CAES project history:

  • November 24, 2009. The U.S. Department of Energy (DOE) awarded us a $25 million grant to fund our initial work on a CAES project. The project’s purpose was to support our increased use of intermittent renewable energy. The grant was given under the American Recovery and Reinvestment Act (ARRA).
  • January 21, 2010. The California Public Utilities Commission (CPUC) approved our request for matching funds of $25 million for the project; of which, $1 million was to be recovered via involvement of the California Energy Commission (CEC).
  • (Subsequently). The California Energy Commission (CEC) showed support for the project with conditional approval of a $1 million grant.


Learn about CAES technology

CAES uses energy during low demand periods to compress air. Then it injects the air into a depleted natural gas reservoir. Next, the compressed air is used to power a generator during times when energy demand is highest.




The proposed commercial-scale project has a nominal output capacity of up to 300 megawatts (MW). The output is similar to the output that a mid-sized power plant can generate for up to 10 hours. We estimate that a commercial plant could be online in the early or mid-2020s.


Two CAES plants are currently operating. One plant is located in Alabama and the other plant is in Germany. Both have operated safely and reliably for more than 50 years, combined. The plants use an underground cavern created in a salt formation. However, this type of salt formation is not commonly found in our territory.

On the other hand, porous rock formations are common. These underground porous rock formations might be a suitable alternative to salt formations. The rock formations are depleted natural-gas reservoirs about one-half to one mile below the ground. Typically, they are large sand deposits overlaid by a dense layer. This layer isolates the rock formation from shallower formations like fresh-water aquifers. Porous rock formations create isolated pockets in which compressed air can be stored.


Follow the progress of the CAES project

PG&E is conducting the CAES project in three primary phases:

  • Phase 1. Reservoir feasibility including site control, reservoir performance, economic viability and environmental impacts
  • Phase 2. Commercial plant engineering, procurement, and construction and commissioning
  • Phase 3. Operations monitoring and technology transfer

Phase 1 is funded. At the end of Phase 1, we will decide whether to seek the required regulatory approvals to proceed to Phase 2.