A diagram of General Compressions compressed air energy storage system from the ARPA-E Summit earlier this year.

General Compression said today it has raised money to further develop a method for storing energy from wind turbines with compressed air.

The Boston-area start-up secured the first tranche in a $54.5 million in a series B round of funding. The full funding is contingent on meeting certain milestones.

General Compression was started in 2006 to adapt air compressors used in other industries to store wind power by pumping pressurized air into underground formations. The company received seed funding in 2007 and has been seeking additional funding and corporate partners to advanced product development.

There are already two installations of underground compressed air storage and a number of other efforts to build new ones. After being pumped underground, the high-pressure air is released and passed through turbines to generate electricity.

In one natural gas plant in Alabama, the compressed air is pumped underground at off-peak times at night and then released to deliver power to the grid during peak times. Although there is some energy lost in the compression and expansion process, power generation companies can earn more money for delivering power during times of high demand, such as the middle of the day.

General Compression's ground-based system is designed so wind turbines power a compressor and air expansion unit. With storage, wind power can become "dispatchable," or able to deliver power when needed rather than only when the wind is blowing, according to the company.

ConocoPhillips, an investor in General Compression, is a partner in its first project now under construction in Texas. This round of funding was led by Northwater Capital Management. Other investors include US Renewables Group and utility Duke Energy. The series B will allow the company to build up its manufacturing supply chain and develop new projects, it said.

General Compression also received a grant from the Department of Energy's ARPA-E research program to pursue compressed air energy storage. The grant description indicates that the company's system does not use fossil fuels during the air expansion stage and has a potential efficiency of 75 percent.

Updated at 6:22 p.m. PT with change to technology description.