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Hydrostor signs offtake agreement for energy storage project in California
A California community electricity distributor has signed a 25-year power purchase agreement with Toronto-based Hydrostor Inc., a deal worth almost US$1-billion that moves a long-duration energy storage project closer to fruition.
Under the agreement, Central Coast Community Energy will contract for 40 per cent of the offtake from Hydrostor’s Willow Rock Energy Storage Center, a proposed development near Rosamond, in Kern County, Calif. The project will employ the company’s advanced compressed air energy storage technology.
Willow Rock is one of two planned Hydrostor developments in California. The plants, which can store energy longer than lithium-ion batteries, will allow more renewable energy onto grids by smoothing out the inherent supply variability of wind and solar farms. The company is also developing a project in New South Wales, Australia. The three plants are expected to cost about $2.5-billion to build.
Privately held Hydrostor plans to make a final investment decision on the 500-megawatt Willow Rock facility in mid-2024, pending project debt and equity financing, engineering and permitting. All of those are on track, and the power purchase agreement with Central Coast represents a major milestone toward starting construction, Hydrostor chief executive officer Curtis VanWalleghem said in an e-mail.
Hydrostor’s system works by pumping compressed air into a cavern deep underground. The rush of air pushes water up to a reservoir at the surface. When electricity is needed, the water is released back into the cavern, sending the air out and driving turbines to generate power. The Willow Rock plant has been designed to discharge energy for up to eight hours, and the system can run on either excess or off-peak power from the grid or from renewable sources.
Last year, the company attracted big-name investors in its bid to develop its current slate of projects and expand around the world. The asset management arm of Goldman Sachs committed US$250-million, and Canada Pension Plan Investment Board agreed to invest US$25-million. Hydrostor’s other backers include ArcTern Ventures, Lorem Partners, Canoe Financial and Business Development Bank of Canada.
Central Coast serves 447,000 customers in 33 communities in California and aims to source 100-per-cent clean energy by 2030. In a statement, it called energy storage “the most critical piece of the transition to renewable energy.”
Hydrostor said Central Coast will buy 200 megawatts, or 1,600 megawatt hours, of electricity from the storage project. It also said it is in talks with several other parties for the remainder of its capacity.
In October, Hydrostor announced it had struck a deal with engineering and construction company McDermott International to proceed with front-end engineering and design studies for its Silver City storage project in that country.
Source: The Globe and Mail