This article is one in a series investigating the importance of modernizing and decarbonizing the electric grid. The company we feature in this article – Hydrostor – has made a brilliant re-think of a decades-old system called Compressed Air Energy Storage and to create a form of grid-scale energy storage that is very attractive. Hydrostor just announced that it’s building 1,000 megawatts of storage at two locations in Kern County, California.

If you want to understand the issue in context, see the article Grid Modernization; for cutting edge experts’ take on the topic, see the article Here Is How To Create A Clean, Resilient Electrical Grid.

For a look at an innovative company spun out of Stanford University’s labs that have developed a battery with tremendous potential for providing grid storage, see the article, Enervenue: The Batteries We Need for Grid-Scale Storage. To learn more about how the power of software can be harnessed to create a more resilient, efficient public grid, see my Video Report about Virtual Power Plants.

To learn more about a scrappy, publicly-traded American company using special superconducting cables to improve the resiliency of our present grid and create efficiencies at urban substations, see this article on AMSC. And to learn about Finnish company, Wartsila, that is busy globally building “hybrid” grid systems incorporating both conventional and renewable generation sources, see this article.

Executive Summary


  • By far the most popular form of grid-scale energy storage is not lithium-ion — not by a long shot. Energy storage does not necessarily have to mean a chemical battery.
  • Compressed Air Energy Storage technology is decades old, but has some technical issues that means it has not become an important grid-scale storage resource.
  • Canadian company, Hydrostor, has done a brilliant re-think of CAES systems and come up with its own Advanced-CAES technology that makes it a very attractive option for long-term (8-12 hours), grid-scale storage.


The Power of Dihydrogen Monoxide

One of the consistent themes of this series on grid modernization is the necessity to engineer systems that allow for energy storage and retrieval to help make up for the intermittency problem posed by renewable generation sources.

After speaking with people from EnerVenue, I got excited about that company’s innovative metal-oxide batteries. When I spoke with the folks from Wartsila, I understood the power of large-scale lithium-ion installations.

However, the leading grid storage solution in the world is based on a completely different chemistry from either of these two solutions. The leading grid storage chemistry in the world is based on the awesome power of dihydrogen monoxide.

That’s right – according to the US Department of Energy, 95% of all grid storage is based on H20 – pumped-storage hydropower.

The idea is simple, when you have excess power, you use some of that to pump water into a reservoir on a hill. When you need power, you release some of that water through a generator at the bottom of the hill.

The pumped-storage hydropower solution is very reliable, cheap on a kilowatt hour basis, and can maintain its charging capacity for as long as you can keep the pump working. The problem with this solution is that – as in the case of dams – places that can easily accommodate a pumped-storage hydropower installation already have one.

The point is that “storage” does not have to mean “battery.” As long as one can store potential energy and convert it when needed into electrical energy, it doesn’t matter if the potential energy is stored in chemical form (e.g., lithium-ion) or in some other way.

Once I understood this point about potential energy, the amazing work of Toronto, Canada-based Hydrostor made a great deal of sense to me.

Compressed Air Energy Storage

In a Compressed Air Energy Storage (CAES) system, potential energy is stored by compressing air and injecting it into an underground (or underwater) cavern.

Here’s how a legacy CAES system works:

Electricity – perhaps generated by a wind farm or a solar array that is churning out extra electrons during off-peak hours – flows to the CAES facility and powers a compressor. The compressed air is sent down a shaft to an underground storage cavern, where it can sit indefinitely.

When the grid needs power – after the sun goes down and everyone flips on Netflix, for instance – the compressed air is released from its underground storage, travels back to the surface, and spins a generator to create some electrons.

The round trip actually burns energy – you can’t compress air, inject it into a well, pull it back up again, and use it to spin a generator without losses. With an old-fashioned CAES system, you’ll be able to dispatch around four units of energy for every 10 units you receive to power your equipment.

There are a few problem areas that has reduced CAES system popularity over the years. Even though this technology was developed in the 1970s, only two CAES systems have ever been placed into service – one in Germany and one in Alabama.

In addition to the fact that most grid systems were simply not designed with integrated energy storage in mind, two major engineering problems associated with CAES have meant that this technology has not taken off.

The first problem is related to the heat that builds up whenever air is compressed. The warmer the air, the greater the volume required to store it (think back to your high school chemistry classes). The greater the storage volume, the more expensive the installation becomes and the harder it is to site the facility.

The second problem is that when the compressed air is released from the cavern, the pressure in the cavern naturally goes down (again recall your high school chemistry class). The lower the pressure differential between the cavern and the generator, the less electricity can be produced.

There are various ways engineers have tried to solve these two problems, but the way they have done so in the past has created new problems – including the emission of greenhouse gases.

Hydrostor’s Advanced Compressed Air Energy Storage

The ingenious way Hydrostor has solved CAES’s engineering problems sets it apart.

To get around the first CAES problem, Hydrostor removes the heat created by the air compression process and stores it in insulated containers before injecting the cool, compressed gas into the underground cavern. This heat separation process allows for smaller caverns to be built; the saved heat becomes important in a later step – we’ll get to that in a minute.

To solve the second problem, Hydrostor builds a large pool at the surface next to the plant and connects that pool to the cavern by pipe. When compressed air fills the cavern, water is forced back into the pool. When air is drawn up from the cavern, the pool water presses down to keep the air remaining in the cavern at a constant pressure. Brilliant!

In a sense, Hydrostor has figured out how to incorporate the power of “dyhydrogen monoxide” — pumped-storage hydro — into compressed air energy storage.

One last problem with legacy CAES systems that relates specifically to the problem of climate change, is that usually, the force of the expansion of the compressed air is not great enough to turn the generator to create much energy.

As such, natural gas is injected into a turbine with the compressed air and burned so that enough energy can be created. Obviously, burning natural gas is no bueno if you’re aiming at net-zero carbon emissions.

Recall that the Hydrostor system retains the heat generated from the initial air compression step. When the air is pulled back to the surface from its storage cavern, Hydrostor reheats it before sending it to a special kind of turbine. This added heat contains energy of its own and the combination of the heat energy with the compressed air energy allows more electricity to be generated.

At the end of the whole, reengineered process – which Hydrostor calls Advanced Compressed Air Energy Storage (A-CAES) – the grid gets back six units of energy for every 10 that goes in (increasing efficiency by a whopping 50% over legacy systems) without any emissions of either heat or greenhouse gases. That’s impressive!

Why I Like Hydrostor

There are a lot of reasons to like what Hydrostor is doing, beside the simple fact that it has found an elegant engineering solution to inherent weaknesses to some difficult energy storage problems.

First, I like that once the facility is built, it is easy and cheap to add capacity. Simply dig out a little more space for your cavern and you wind up with a few more hours’ worth of energy reserves. Lithium-ion installations are cheaper for storing small amounts of energy (from 1-4 hours’ worth), but as the storage time requirements lengthen past that, Hydrostor’s A-CAES solution has the advantage.

Second, I like that Hydrostor facilities can be sited in a wide variety of locations – CEO and co-founder of the company, Curtis VanWalleghem, says that around 70% of all land has suitable geology for the construction of a Hydrostor system.

Third, I like that the facilities operate without any emissions. This feature, combined with the geological feature, means that there is less of a likelihood of NIMBYism if Hydrostor wants a permit to build a plant in a given area.

Fourth, I like that all of the equipment used for these facilities represents off-the-shelf parts that any oilfield engineer would feel comfortable working with (one of Hydrostor’s investors is the oilfield equipment firm, BakerHughes). This means that Hydrostor can easily buy replacement parts, train workers, and operationalize its facilities without experiencing a huge amount of bleeding edge technology risk.

Last, I like that – similar to pumped-stored hydro – you don’t run into a maximum number of “recharge cycles” before the facility needs replaced. Lithium-ion batteries have a few thousand recharge cycles in them before metallic fuzz called “dendrites” end up ruining the storage capacity. Its not like Hydrostor’s caverns are going to start developing capacity-reducing stalactites! As long as the above-ground compressor equipment is maintained, these facilities should essentially last till the end of this century as far as I can see.

While I liked the idea of Hydrostor a lot as I as reading about it, one thing kept popping into my mind. What if someone developed a superbattery that would be cheap, have essentially infinite rechargeability, and operate more efficiently than Hydrostor’s A-CAES?

When I asked VanWalleghem about this, he told me that for the sake of his kids, he hoped someone would invent a miracle superbattery. However, he made the valid point that new technologies – battery technologies included – take a long time to gain engineering acceptance and longer still to scale to ubiquitous use.

In the time it will take for someone to invent a superbattery, convince other scientists and engineers to design superbatteries into global systems, then build enough of the superbatteries to make a difference to carbon emissions, we should at least be doing all we can to store energy more efficiently. Hydrostor provides precisely that promise.

VanWalleghem knows, as I know, that we need to focus all our natural ability to invent and adapt to meet the challenges facing us due to climate change. Hydrostor offers a wonderful example of a company doing just that.

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