Hydrostor Inc. is slowly integrating a long-duration, non-emitting energy storage solution into global markets using advanced compressed air energy storage (A-CAES) that could help make intermittent wind and solar power more viable over the long-term.
“Wind and solar are the cheapest forms of generating energy globally. Cheaper than coal, cheaper than gas (and) cheaper than nuclear. There’s no way of making energy cheaper than wind and solar,” said Curtis VanWalleghem, Hydrostor’s co-founder and CEO.
“But if you want to rely on it, and not have your lights go out all the time, you need some way of firming that up and storing it. You need longer than an hour or two and so you do need this next generation of longer-duration storage that’s more flexible to locate than pumped hydro.”
Hydrostor, based in Toronto, was founded in 2010 and has grown to almost 40 employees. VanWalleghem hopes it will further increase to 60 or 70 employees by year’s end.
Prior to running Hydrostor, VanWalleghem held positions at Bruce Power and in Deloitte’s corporate strategy consulting practice.
The company’s pipeline of projects under development or in operation across Canada, the U.S., Chile and Australia totals over 6 GW and 65 GWh. The individual projects range in size from 200 to 500 MW.
The projects have lifespans of over 50 years and the energy storage capability can range from five hours to multiple days.
The company began by teaming with the Toronto Hydro Corporation in 2015 for an A-CAES system 3 kms from Toronto Island and 55 metres underwater — a world first. Although much smaller than its current projects, at 1 MW, a release from the time states it is capable of powering about 330 homes at peak output.
Its first operating facility is in Goderich, Ont., which became operational in 2019. Contracted by Ontario’s Independent Electricity System Operator, the plant has 1.75 MW of peak power output and over 10 MWh of storage capacity.
A-CAES starts with off-peak or surplus electricity which is used to run a compressor producing heated, compressed air. That heat is extracted from the air stream and stored inside a proprietary thermal store. The compressed air is stored in a constructed cavern where water is used to maintain the system at a constant pressure.
From there, the air can be driven to the surface where it is recombined with the stored heat and expanded through a turbine to generate electricity on demand.
A-CAES uses no fossil fuels and therefore produces no carbon emissions.
“Other than batteries (like) lithium ion, which are not really cost effective and they only last about 10 years, they’re okay for giving you one hour here or there,” VanWalleghem explained. “But if you need to store for 10 to 12 hours overnight when it’s not windy, and you obviously don’t have sun, they’re just nowhere near cost-effective to do that with batteries.”
During his time at Bruce Power, he met fellow co-founder Cameron Lewis, who had two patents for a different way of accomplishing compressed air energy storage. They involved the storage of the heat itself, as well as the use of water compression, which allows Hydrostor to theoretically implement its A-CAES system anywhere with bedrock.
From there, the founders were backed by cleantech venture fund ArcTern Ventures in 2013, which led to the pilot plant with Toronto Hydro.
“It was clear to me that you needed another solution because pumped hydro is really hard to site and find sites where you can permit there,” he said. “They take up massive amounts of water, and they’re really challenging.”
Hydrostor’s current projects
VanWalleghem had brought in a team to “hunt for contracts” which led them to Australia, the Cheshire Energy Storage Centre in the U.K., as well as Willow Rock and Pecho in California.
Projects can take anywhere from two to four years to build depending on scale. Given the length of time these plants will run and their costs, he also said they would, in essence, eventually run as their own companies.
He said the furthest along of these billion-dollar projects is the 200 MW A-CAES system in a decommissioned mine near Broken Hill in New South Wales, Australia. Planned for 2025, it will provide up to 1,600 MWh for an eight-hour duration.
The 500 MW Willow Rock project northeast of the Los Angeles basin is planned for service in 2028 and will provide up to 4,000 MWh over an eight-hour duration to both the L.A. and California grids. It marks the largest standalone energy storage project in the state.
In April, Hydrostor received a $32.5 million investment from the Canada Pension Plan Investment Board. Late last year, the company also received a $325.1 million investment from Goldman Sachs Asset Management. That funding will go toward the company’s project development pipeline.
VanWalleghem promised more contract announcements in the fourth quarter of this year.
The future of A-CAES
Regarding expansions into other regions of the world, he explained that aside from areas actually having enough wind and solar energy to make A-CAES viable, it also comes down to the policy and regulatory apparatus in each country.
“Australia and California were at the leading edge. A lot more markets across North America are now in the mix, including Ontario and Alberta,” VanWalleghem said.
“Then we also see India, Japan and China as very attractive markets. [Also] given the war in Ukraine and the desire to get off of gas and how prominent renewables are in Europe, pretty much all Western Europe is attractive at the moment including the U.K. and Ireland. So it is really spreading globally.”
He noted renewables currently make up about 20 per cent of generating capacity, and the need for decarbonization means that has to increase to 80 or 90 per cent.
Part of that company growth may also involve an IPO. Once the growth capital from the CPP and Goldman Sachs investments translates into revenue, he also mentioned contracting “another 10 or so” A-CAES systems.
“We would look to either IPO or get sold or acquired by a global energy company at some time in the future. That time is probably late this decade,” VanWalleghem said. “Then as we need more capital to further expand geographically and build the next wave of plants, that’s probably when it makes sense to look at either a strategic partnership or an IPO.”