Hydrostor Secures $200 Million For Energy Storage Growth

Toronto energy storage firm Hydrostor has made a major funding announcement, raising $200 million to fund its long-duration energy storage initiatives. The investment will help the company augment intermittent renewable energy sources with its proprietary Advanced Compressed Air Energy Storage (A-CAES) technology.

The investment includes a $150 million convertible note financing commitment from strategic investors such as the Canada Growth Fund (CGF), Goldman Sachs Alternatives, and the Canada Pension Plan Investment Board (CPP Investments). In addition, CGF has provided a $50 million convertible development expenditure loan facility, specifically to finance the development expenses of Hydrostor's Canadian projects. This investment is a significant milestone in the company's mission to transform energy storage solutions and help drive the clean energy transition.

Energy storage is at the forefront of the transition to renewable energy, solving one of the largest problems of wind and solar power—their intermittent nature. Because these sources do not provide a continuous supply of electricity, effective storage systems are needed to make sure energy is delivered when it is required, avoiding waste and making round-the-clock supply possible. Hydrostor's A-CAES technology is a promising answer by providing scalable, affordable, and long-duration energy storage features.

Established in 2010, Hydrostor has created a distinct method of energy storage using infrastructure and materials readily available from mining and gas operations. Its A-CAES technology can hold energy for eight hours up to several days, offering an extended storage option with a lifetime over 50 years. The system operates by utilizing surplus electricity from the grid or a renewable energy source to drive a compressor, which produces heated compressed air. The heat is captured and stored in a specialized thermal storage tank, while the cooled compressed air is injected into an underground, water-filled hard rock cavern. When energy is needed, the stored air is forced back to the surface by the displaced water through natural gravity. It is then combined with the accumulated heat and expanded in a turbine to produce electricity, making efficient energy release when necessary.

Hydrostor has been aggressively scaling up its technology, with large projects in late-stage development in California and Australia. These projects will go into construction in 2025, representing a key milestone in commercializing the company's storage offerings. The company also has a healthy pipeline of projects worth 7 GW, including the 500 MW Quinte Energy Storage Centre in Ontario, Canada.

Curtis VanWalleghem, Co-Founder and CEO of Hydrostor, welcomed the funding with enthusiasm, underscoring the vote of confidence it represents in the company's technology and potential. He mentioned that having CGF as a new investor, in addition to the ongoing backing of Goldman Sachs and CPP Investments, was particularly significant. According to VanWalleghem, the funding would allow Hydrostor to develop its first projects to market and keep developing a robust pipeline of future energy storage projects.

The CGF funding is its 11th investment to date since it was launched in 2023. The fund, with an initial capitalization of $15 billion, is aimed at encouraging clean economic growth in Canada by mobilizing private capital and reducing risks of investing in low-carbon initiatives. It emphasizes the financing of innovative technologies, companies, and supply chains that are in line with Canada's climate and sustainability targets. Investment in Hydrostor is consistent with CGF's vision of developing technological innovation and economic development alongside minimizing carbon footprints.

Yannick Beaudoin, President and CEO of Canada Growth Fund Investment Management, underscored CGF's focus on backing projects that fuel sustainable innovation and economic growth. He was effusive in his praise for Hydrostor as a Canadian success story and underscored the need to speed up its intellectual property and projects both nationally and internationally. Beaudoin pointed out that CGF's support for Hydrostor is a testament to its larger vision to advance game-changing technologies that lead toward a cleaner and more resilient energy future.

The investment represents a major milestone for Hydrostor as it further builds innovative energy storage technology that can be used to improve grid stability and enable the greater penetration of renewable energy. With strong support from top investors and governments, the company is poised to take center stage in the world's energy transformation. As countries across the globe continue to curb their dependence on fossil fuels, inventions such as A-CAES will be critical in providing a stable and sustainable power supply to generations to come.