Hydrostor is developing truly massive grid storage in watery caverns

Dozens of companies are building breakthrough technologies to store clean power for hours on end. Canadian startup Hydrostor could beat them to market with a combination of water and caves.

After operating its technology in Ontario’s wholesale market for two years, Hydrostor last week won a government grant worth 4 million Canadian dollars ($3.2 million) to pay for design work for a project that could deliver as much as 500 megawatts. That’s more capacity than the largest lithium-ion battery plants that are now operating. But Hydrostor’s facility would be able to discharge for up to 12 hours, longer than is typically cost-effective for batteries.

“We can help with renewable integration the way other storage assets can, but we really are a direct replacement for these fossil fuel plants that are retiring,” President Jon Norman told Canary Media.

The grant only covers initial design and engineering work; actual development will require considerably more financing. But Hydrostor is working with a still-undisclosed ​“major developer partner,” Norman said. The project could be ready to run by mid-decade, if the developer can lock down a commercial case.

Construction entails digging large-diameter shafts underground, one of which will be filled with water from aboveground tanks. Compressors on the surface will push air into the cavern, where it presses against the column of water to maintain a steady pressure. When released, that compressed air will spin 100-megawatt turbines that regenerate power. All that construction work is expected to take three to four years.

Norman acknowledged that the market mechanisms to compensate this new type of power plant ​“are still evolving,” but said its capabilities track well with where the provincial grid is headed. Among other things, Ontario is bracing for the 2025 shutdown of the Pickering nuclear plant outside of Toronto.

“They’re going to have a shortage of capacity as this nuclear conventional generation goes offline,” Norman said of the Ontario grid. ​“They still have an excess of energy.”

The rough business model of Hydrostor’s plant is to convert cheap excess energy into valuable grid capacity by storing it for later. Hydrostor is also developing projects in California, another state shutting down firm nuclear capacity and facing peak-hour shortfalls, even with a general excess of clean energy. Regulators recently affirmed a need for 1,000 megawatts of long-duration storage by 2026. Hydrostor’s website lists the Rosamond project, a 500-megawatt system in the works in the Golden State.

Filling the long-duration storage gap for decarbonizing power grids

Batteries dominate the grid storage market today, while more exotic technologies attempt to break ground on longer-duration projects that can take the place of natural-gas-fired power plants for delivering power on demand. Some sort of gas replacement is crucial for achieving the vision of 100 percent clean electricity favored by President Joe Biden and others.

See Canary Media’s latest coverage of the long-duration storage sector.

Numerous startups remain confident that flow batteries and other electrochemical solutions will get out of the lab and into profitable, large-scale grid facilities. A different class of companies stores power by repurposing heavy equipment from other industries, like Hydrostor’s ​“advanced compressed air” approach or Highview Power’s cryogenic air storage.

“We really just built this around existing supply chains,” Norman said. ​“We have patents on the way it is integrated together efficiently.”

That gives Hydrostor high fixed costs: excavating hard rock isn’t cheap. But once the drilling begins, it’s not so difficult to just drill a bit more, which translates to additional energy duration.

The Ontario project could start with 6 hours of duration, to be expanded as market conditions demand, Norman said. Hydrostor’s 10-megawatt-hour system in Goderich, Ontario has been providing power to Ontario’s Independent Electricity System Operator since 2019, albeit at much smaller volumes than it’s aiming to deliver at full scale.

The benefit is that Hydrostor doesn’t need to build market confidence around some newfangled nanomaterial or stealthy device. It’s developing 500-megawatt plants while many long-duration companies are still chasing their first pilot projects.