On January 10th, the asset management group of investment bank Goldman Sachs announced an investment of $250 million in Hydrostor, a Canadian advanced compressed air energy storage (A-CAES) company. Goldman Sachs' asset management company began researching the long-term energy storage market and technology two years ago, and now has finally taken the initiative to lay out long-term energy storage startups, which may indicate that a good time has arrived to enter this field.



Hydrostor is commercializing its proprietary compressed air energy storage technology, claiming it can become an extremely low-cost long-term energy storage solution. Although the company has only built one commercial 2.2MW/10MWh+system so far, which was launched in Ontario, Canada in 2019, it currently has planned projects of 1.1GW/8.7GWh in Australia and California, which are said to be "in progress". The new investment will support the development and construction of these projects and expand Hydrostor's global development channels.





Hydrostor Company was established in 2010, and in the first 10 years, the company only received very limited financing, mostly from government support funds. In recent years, with the increasing demand for long-term energy storage, Hydrostor, based on compressed air energy storage technology, has begun to receive attention. The company claims that by improving its compressed air technology process, the cycle efficiency of its energy storage system has increased from 40% in the past to 65% now. The company website introduces this improved energy storage technology, and we will explain it in detail as follows:



The entire energy storage system is shown in the following figure, including ground compressors, heat storage devices, reservoirs, and underground gas storage devices.





The ground compressor uses electricity to compress air into high-pressure gas, which is then injected into the underground gas storage device.





Due to thermodynamic reasons, the temperature of compressed gas will increase. During storage, heat will diffuse to surrounding objects, and the temperature will gradually return to normal temperature. This loss of heat is the reason for the low circulation efficiency of compressed air technology. If traditional compressed air technology does not preserve heat, its theoretical cycle efficiency will not exceed 50%. Hydrostor Company exchanges heat between these high-temperature gases and water, storing the heat in the water. When compressed gas is released to generate electricity later, the heat is returned to the gas, reducing the loss of energy and improving the system cycle efficiency to 65%.





Another innovation of Hydrostor is the gas storage device. Previously, compressed air systems generally relied on natural karst caves or abandoned salt caverns to provide well sealed gas storage spaces, and their site selection was severely limited by terrain conditions. Hydrostor company borrows mining technology and selects areas with hard rock layers to build rock gas storage spaces by drilling at a depth of 600 meters underground, which can give compressed air technology more flexibility in site selection. These rock spaces are usually filled with water, and when the compressor compresses air into the underground space, the water inside is pushed back into the reservoir on the ground. Under the pressure of water, the gas in the rock space can also maintain a certain high pressure, which can increase the density of stored gas.







When power generation is needed, the water in the reservoir is poured into the underground rock space, and the compressed air stored inside is squeezed out of the ground and enters the compressor to expand and generate electricity.





Before the gas returns to the ground and enters the compressor, it undergoes heat exchange with the water that stores heat. As the temperature of the gas increases, it can expand more and emit more electricity.





Overall, Hydrostor's technological innovation lies in the following two aspects:

1. Use liquid heat storage devices to store heat and increase the system's circulation efficiency from 40% to 65%.

2. Choosing underground rock layers to create gas storage space enhances the flexibility of plant site selection.



But these technological improvements all come at a certain cost, which is to increase the system installation cost. However, according to data disclosed by the company's CEO, the estimated total installed cost of their upcoming 8-hour 500MW/4000MWh energy storage station in California, USA is around 1 billion US dollars, which translates to a unit installation cost of 1.6 RMB/Wh. The bidding cost for compressed air energy storage announced in the Chinese market now ranges from 2 to 3.5 yuan/Wh, compared to Hydrostor's lower installation cost. However, this installation cost is only the number revealed by the CEO in an interview, and there may be some promotional elements, so it is not comparable to the cost of real gold and silver bidding in the Chinese market. Considering the numerous additional facilities of its technology and the generally high engineering costs in developed countries, it remains uncertain whether this unit installation cost can ultimately be achieved.





ZH Energy Storage Company will hold a course on long-term energy storage market and technology analysis in the near future. Interested parties can add the company's official WeChat account for consultation.




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Author and Company Profile:

Dr. Xie Wei, co-founder and chief scientist of ZH Energy Storage, holds a Bachelor's and Master's degree in Materials from Tsinghua University, and a Ph.D. in Chemical Engineering from the University of Texas at Austin. He has served as a Senior R&D Engineer at United Technologies and Chief R&D Scientist at Form Energy, a startup in Boston. With over ten years of experience in liquid flow battery product development, he was responsible for the all vanadium liquid flow battery project, which won the 2013 US 100 R&D Award. I have published nearly 20 SCI papers, obtained over 20 international invention patents and applications, and served as a reviewer for multiple high impact factor journals.



Relying on the industry experience and outstanding research and development capabilities accumulated by its founder Dr. Xie Wei in the energy storage field, ZH Energy Storage Company will launch mature liquid flow battery products to meet the market demand for large-scale long-term energy storage (discharge time greater than 4 hours) and achieve economic applicability. The company's long-term goal is to build a world leading liquid flow battery technology platform, communicate upstream and downstream industrial chains, reduce the cost of liquid flow battery systems through large-scale production, and become a leading enterprise in the field of long-term energy storage.