A $200-million (all figures U.S. unless otherwise noted) investment into Toronto-based energy storage developer Hydrostor Inc. is aimed at pushing its first large-scale projects in the U.S., Australia and Canada toward completion.

The funding round was led by the Canada Growth Fund Inc., Goldman Sachs Alternatives and CPP Investments.

It is made up of a $150-million convertible note for a pipeline of future projects and late-stage development in Broken Hill, Australia, and Kern County, Calif., and a $50-million loan facility for developing Canadian projects, the first slated for Lennox and Addington County in eastern Ontario.

“We’re going to continue to grow the pipeline, look at additional global markets to grow. In order to do that, we’ll continue to potentially look to the market to support us,” Hydrostor’s CFO Beth Summers told Sustainable Biz Canada.

Hydrostor’s technology, named Advanced Compressed Air Energy Storage (A-CAES), is designed to store energy for at least eight hours. Excess energy from the grid, typically renewable, is used to compress hot air which is stored in a hard rock cavern. When electricity is needed, the air is released to generate clean electricity from a turbine.

With more renewable energy powering electrical grids, energy storage technologies such as batteries and A-CAES are in demand for greater reliability.

Hydrostor’s upcoming projects

Hydrostor’s two utility-scale projects furthest along in development are in Broken Hill and Kern County. The final investment decision for the two is expected later this year.

The Broken Hill project, Silver City, is planned to have a capacity of 200 MW/1,600 megawatt-hours (mW-h). Willow Rock planned for Kern County is expected to be a 500 MW/4,000 mW-h project. Both are set to have eight hours of energy storage.

In Ontario, Hydrostor plans to develop the Quinte Energy Storage Centre, a 500 MW/4,000 mW-h facility that will be situated near Kingston.

At an earlier stage than the Silver City and Willow Rock projects, Summers said Hydrostor is awaiting direction from the Ontario government on a long-duration energy storage mandate before the company can disclose details on Quinte. That includes an expected final investment decision.

Hydrostor’s pipeline consists of over 11 projects totalling approximately seven gigawatts of capacity, Summers said, expected to be located in Canada, Australia, the U.S. and the U.K. Any market that focuses on renewable energy at a penetration rate of over 30 per cent is of interest for Hydrostor, she added.

The key to these projects is “identifying markets and ensuring that they have that revenue pathway so there is that clean, predictable cashflow.”

The latest investment is the second time Goldman Sachs and CPP Investments have invested into Hydrostor. In 2022, Goldman Sachs Asset Management put up $250 million for project development. CPP Investments also invested $25 million into Hydrostor in 2022.

Summers said Hydrostor will continue fundraising to maintain its momentum and growth.

Finding certainty amid challenges

Amid deep political uncertainty affecting Hydrostor’s sector following the re-election of U.S. President Donald Trump, the company can take a sigh of relief thanks to the latest funding.

Many clean energy investors have pulled back until they have more certainty, Summers said, while this $200-million investment “boosted us and given us that momentum to continue to grow.”

Hydrostor’s CEO Curtis VanWalleghem told The Globe and Mail he is confident the company will survive potential legal challenges from the Trump administration to a $1.76-billion conditional loan guarantee from the U.S. Department of Energy for Willow Rock, which had been made under the administration of former president Joe Biden.

“There’s uncertainty today, but our view would be there is still that energy transition drive that’s going to continue on,” Summers said.