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Why Goldman Sachs thinks advanced compressed air is worthy of US$250m investment

Rendering of Hydrostor’s 200MW/1,600MWh Broken Hill project in Australia. Image: Hydrostor.

Goldman Sachs Asset Management has more than US$2 trillion of assets under supervision through more than 30 offices around the world.

Its reach goes far and wide into many areas of financing and investing, including the ownership of two of the world’s largest solar projects featuring battery energy storage, through its subsidiary Goldman Sachs Renewable Power.

Meanwhile, Ontario-headquartered energy storage company Hydrostor has been taking “very limited funds,” learnings from a few megawatts of projects in operation and “placing bets” that a technology it calls advanced compressed air energy storage (A-CAES) can scale up to multiple gigawatt-hours of long-duration storage around the world.

Earlier this month, reported that Goldman Sachs has chosen to invest a quarter of a billion dollars into the Canadian startup. The funding will be paid out in tranches, depending on what sort of progress Hydrostor can make in executing three projects it has in development in California and Australia, totalling 1.1GW/8.7GWh. heard from Hydrostor’s CEO Curtis VanWalleghem on how the company believes it has improved compressed air to be competitive and a key part of the future energy system. The CEO explained more about the Goldman Sachs Asset Management investment and why A-CAES is “reliable capacity which can be located where you need it”.

The Hydrostor story begins in 2010, VanWalleghem says, when the company “figured out a new way of improving compressed air” and then built a small pilot system to prove the physics worked. Its first 1MW system was built, connected to the grid by utility Toronto Hydro and put into service in 2015.

Hydrostor’s first commercial facility then went online in Godereich, Ontario, in 2019. The CEO says it made it possible for the company to offer performance insurance and wrap the technology solution into a solid offering, as well as demonstrating a commercially operating facility in action.

“We had very limited funds at that time as we were still proving out the technology. So I gave my team a handful of millions of dollars and said, ‘let’s start developing large-scale systems and place some bets.”

Before we go further, it’d probably help to understand what it is that Hydrostor defines as ‘advanced compressed air energy storage’.

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