A Canadian company called Hydrostor has a new compressed-air energy storage system that it says is half the cost of grid-scale batteries and on par with adding a new natural gas plant to a grid.

The system, called Hydrostor Terra, uses electricity when it’s plentiful to compress air and send it underneath the ground into a specially constructed tank. While the system is compressing the air, it also takes the heat generated by the compressors and stores it in a thermal management system. Then, when electricity is in short supply, the Terra system sends that compressed air back up from underground and heats the surfacing air stream using the heat that was captured in the compressing process. The heated air moves a turbo-expander connected to a generator, which creates electricity.

Hydrostor’s method of capturing heat from the compression process is what sets the Terra project apart from other compressed-air energy systems (or CAES systems). Traditionally, CAES systems burn natural gas to heat compressed air as it's brought up to the surface to make electricity. But burning natural gas detracts from the system’s overall efficiency and creates greenhouse gases. Hydrostor says Terra won’t burn any natural gas in its adiabatic system, that is, a system in which heat doesn’t leave. (Note that a search of Ars Technica reveals five pages of results including the word "adiabatic," all of which pertain to quantum computing. Well, until today. Today we talk about energy.)

According to the Energy Storage Association, adiabatic compressed air systems can be up to 70 percent efficient, and a video provided by Hydrostor suggests its system has approximately 60 percent efficiency. Diabatic systems, where natural gas is burned to reheat the compressed air, are usually only 42 to 54 percent efficient.

According to a Hydrostor spokesperson, the company owns and operates the world’s only utility-tied adiabatic compressed-air energy storage (A-CAES) system. That system has been in operation since 2015 on Toronto Island in Canada and has a power rating of 0.7MW. Because this system uses several underwater balloons to store the compressed air, it's in the process of being expanded to offer multiple megawatt-hours of energy storage. Hydrostor also has a 1.75MW, 7MWh A-CAES system under construction in Goderich, Ontario, Canada and is contracted to build another 1MW, 6MWh system in Aruba.

The Terra system is also different from earlier CAES systems in that Hydrostor and its partner engineering company, Aecom, build special underground tanks for the compressed air and pipe in water from an external source for the compressed air to displace. This helps maintain a constant pressure in the tank, which reduces risk of damage as the system is charged and discharged. Earlier systems generally tried to make use of existing geologic caverns underground or had to construct artificial caverns in salt deposits. Per Hydrostor's press release, "The Terra system, by contrast, can be deployed at any site within proximity to a body of water, including inner-city and urban areas."

Although exact pricing details depend on the project, UtilityDive noted in January that Hydrostor's systems cost between $1,000 and $2,000 per kilowatt to build, and the company's spokesperson confirmed that, adding that the price reflects a "fully installed" system including a warranty. "Many other technologies, including batteries, typically aren't quoted on a fully installed basis," the spokesperson said. According to the US Energy Information Administration (EIA), new natural gas plants cost about $1,488 per kilowatt to build as of 2014.

President & CEO of Hydrostor, Curtis VanWalleghem, noted in the company's press release that it is “engaged with several utilities around the world to deploy systems rated at hundreds of megawatts, delivering gigawatt-hours of storage at durations ranging from four hours up to multiple days.” Hydrostor’s spokesperson told Ars that the company couldn’t provide details on those partnerships at this time, but it hoped to announce larger projects in the coming months.

In January of this year, Canada’s Globe and Mail reported that Hydrostor was looking to secure contracts from US-based utilities that had been buying energy from closing or soon-to-be-closed peaker plants (that is, plants that are only turned on when demand for electricity is highest). The company was apparently “targeting dozens of mostly coal-powered facilities of at least 100 megawatt capacity across the US that either shut down in 2016 or will shut this year,” the Globe and Mail wrote.

Listing image by Hydrostor