In this paper, the operations model of a behind-the-meter Small Scale Compressed Air Energy Storage (SS-CAES) facility is developed for an industrial customer with existing wells/caverns that can be re-purposed for air storage. The operations model seeks to minimize the electricity costs of the industrial customer, while determining the energy output and the corresponding charging and discharging decisions of the SS-CAES system. In order to examine the financial viability of a practical behind-the-meter SS-CAES facility, an economic analysis is carried out using real data of an industrial customer based in Ontario, Canada. Key parameters such as life cycle, CAES capacity and capital cost, and electricity price are considered for carrying out a sensitivity analysis, with the results showing that SS-CAES is economically viable for the current Ontario electricity tariff rate structure. The low capital cost of a SS-CAES project with a re-purposed storage cavern, and the high Global Adjustment charges levied in Ontario are shown to be a key determining factors for the economic feasibility of deployment of SS-CAES in Ontario.
