Compressed-air storage company eyes California's need for long-lasting resources

Responding to California's need for longer-lasting energy storage to decarbonize the power grid, Toronto-based technology upstart Hydrostor Inc. and French financing partner Meridiam Infrastructure Partners SAS have proposed a massive compressed-air energy storage complex in San Luis Obispo County.

The estimated $800 million Pecho Energy Storage Center, targeted for commercial operation in 2026, would include 400 MW of eight-hour energy storage, or 3,200 MWh, Hydrostor said in a Nov. 23 announcement. Pecho LD Energy Storage LLC, a joint venture of Hydrostor and Meridiam, detailed the proposal in an application to the California Energy Commission the same day.

The companies are in active discussions with potential customers, according to Hydrostor President Jon Norman.

"We're hopeful that we'll have an announcement on that in the near term," Norman said in an interview.

Hydrostor plans to break ground at the Central Coast project site in 2023, near Pacific Gas and Electric Co.'s 2,240-MW Diablo Canyon nuclear power station, which is scheduled to retire in 2025.

In line with a California Public Utilities Commission procurement order in June, the PG&E Corp. utility and other energy suppliers in the state must purchase 1,000 MW of long-duration energy storage, with at least eight hours of discharge, by 2026. The requirement is part of a regulatory mandate to add 11.5-GW of new carbon-free resources to replace Diablo and retiring natural gas-fired power plants.

Hydrostor does not rely on natural gas, unlike conventional compressed-air energy storage projects such as the 110-MW McIntosh CAES in Alabama. The California project will include four all-electric air compressor trains and four 100-MW air-driven turbines, as well as heat exchangers, thermal heat storage equipment, a purpose-built subterranean storage cavern, an above-ground water reservoir and a 3.4-mile power line to an existing 230-kV switching station in Morro Bay.

"While we have improved some elements of [compressed air energy storage], it's still fundamentally the same technology," Norman said.

Hydrostor plans to file a second application soon with the Energy Commission for the company's planned 500-MW/4,000 MWh Gem Energy Storage Center in Kern County, with a similar development timeline, Norman added.

Scaling up

The company is likely to encounter competition to fill California's demand for long-duration storage from developers of a variety of thermal, mechanical, chemical and electrochemical storage technologies.

As an evolution of an already commercial technology, however, Hydrostor's approach has the advantage of relying on conventional machinery from major suppliers and standard techniques for storing heat, according to Norman.

"There's other more exotic proposals out there for different technology approaches, some of which can be even more flexibly sited," he said. "But they still have a lot of [research and development] work to do and a big path to commercialization." The technology can also outcompete lithium-ion battery systems designed for longer durations, Norman said.

Undertaking projects the size of its proposals in California is a significant step up for Hydrostor. The company has completed just two projects with a combined roughly 3 MW in Ontario, Canada. One of the projects was a demonstration; the other is a small commercial facility underpinned by a long-term contract with the province's Independent Electricity System Operator.

A 200-MW project with up to eight hours of energy storage capacity is also under development in Australia. Scheduled to break ground late next year or in early 2023, it would be the company's first large-scale facility.

"It's actually arguably more straightforward to deliver at that scale than at a smaller scale, because it's all off-the-shelf equipment with proven delivery channels," Norman said.