Massive underground air-battery project lands $1.76B DOE award: Hydrostor

The Biden administration offered a $1.76 billion conditional loan guarantee for GEM A-CAES, a wholly owned subsidiary of Canadian startup Hydrostor. That federal backing will help secure financing for the Willow Rock advanced compressed-air energy storage (A-CAES) project planned near the town of Rosamond in California’s eastern Kern County.

If all goes to plan, Hydrostor would begin construction late this year, with the goal of starting operations in 2030. Much of the construction will happen aboveground, as Hydrostor installs the compressors that will use electricity to pressurize air, the turbines to turn that air back into electricity, and the tanks and reservoirs containing the water that’s vital to the company’s unique approach.

Hydrostor has raised $250 million from Goldman Sachs Asset Management and $25 million from the Canada Pension Plan Investment Board. It’s planning to start construction this year on its second large-scale project in Australia and has about 10 more large-scale projects under development in North America and Australia. Another challenge that they might encounter is the impact of amendments to the Federal clean energy tax policies under the new Trump administration. The Biden-era DOE loan guarantee for Willow Rock is now under review by the current government. Additionally, a Republican-led Congress is debating whether to repeal or weaken clean energy tax credits. Despite these risks, Hydrostor is actively informing lawmakers about the benefits of long-duration storage. Executive VP Scott Bolton emphasized the project’s role in grid reliability, clean tech innovation, and job creation. Hydrostor first applied for the project permit in December 2021 and aimed to start full operations by 2028. Now, the company expects Willow Rock to go online in 2030. So far, it has secured a 25-year contract with Central Coast Community Energy for 200 MW of capacity. They are still negotiating deals for the remaining output. To date, Hydrostor has raised $520 million from 18 investors. Its most recent $200 million round in February included backing from Goldman Sachs Alternatives, Canada Pension Plan Investment Board, and Canada Growth Fund Inc.: https://carboncredits.com/hydrostors-1-5b-willow-rock-project-faces-permit-hurdles-but-could-revolutionize-californias-power-grid/.