on October 6th, 2023

As Hydrostor seals a groundbreaking deal in Australia for its compressed air energy storage (CAES) facility, we look at the mechanics of CAES, its evolving prospects, and its environmental footprint.

Hydrostor, a Canadian company renowned for its patented advanced compressed air energy storage technology (A-CAES), has inked a binding agreement with Perilya (a leading Australian base metals mining and exploration company based in Perth, Western Australia) to tap into existing assets at the Potosi mine site near Broken Hill, propelling the Silver City Energy Storage Project into action.

The ambitious AUD $652 million (USD 415 million) Silver City endeavor, repurposing an underground mine shaft at Broken Hill to store surplus solar and wind power, boasts an impressive capacity of 200 MW for eight hours. Furthermore, it reserves 250 MWh as backup power during network outages.

Martin Becker, Hydrostor’s Vice President of Business Development and Origination in Australia, emphasizes that Silver City will be Australia’s first operational project and showcase A-CAES technology.

“Silver City will operate as a large energy storage asset, connected to the NSW grid and able to trade large quantities of energy daily,” they said in a joint statement published by PV Magazine Australia on 28 September.

“It will also act as an emission-free long-term grid reliability solution for Broken Hill and the wider region, supporting existing and new renewable energy generation and serving communities and mining loads most cost-effectively.”

So, what is compressed air energy storage technology, how does it actually work, and why is it so timely?

Infographic: how compressed air is stored and used.

What is CAES?

As climate change compels a transition toward renewable energy sources, renewable power systems like solar and wind hold great promise. Yet, these systems rely heavily on weather conditions for optimal operation.

Wind power is one example of how this works perfectly with other types of energy production. The wind turbines spin around to produce energy whenever wind is available. Still, the electricity it generates may not always be needed when it is being produced, and thus, is wasted.

Energy storage systems, a vital solution to this challenge, can enhance the output and efficiency of power plants. One such storage solution revolves around compressed air, offering a reservoir for surplus electricity when demand is low.

CAES is a proven method of storing energy in compressed air, which can later be harnessed for power generation during peak demand or when other energy sources are unavailable.

How CAES Works

CAES serves as a dynamic solution for preserving surplus electricity generated by sources like wind turbines. This excess electricity is transformed into highly pressurized compressed air, stashed away for future use.

This compressed air is unleashed into turbine generators and reconverted into electricity when needed. CAES operates seamlessly year-round, regardless of weather conditions or the time of day.

Crucially, the compression process generates surplus heat, while decompression removes it. CAES systems tackle this thermal challenge through three distinct approaches:


Adiabatic energy storage systems retain and release the heat generated during air compression during decompression. The stored heat can be held in solids like concrete or fluids like oils or molten salt. Although adiabatic systems are still largely theoretical, they are anticipated to exhibit remarkable efficiency once scaled up.


In contrast, diabatic storage systems dissipate heat during compression using intercoolers, effectively wasting it as a byproduct. During decompression, extra heat must be introduced, often through natural gas, resulting in lower overall power plant efficiency. Despite their reduced efficiency, diabatic systems are the sole type implemented at commercial or utility levels.


Isothermal systems represent the pinnacle of CAES efficiency, achieving near-perfect heat exchange with the environment during both compression and decompression. However, they have yet to be realized mainly due to inevitable heat loss challenges.

Compressed air is commonly stored in geological formations like rock reservoirs or salt mines, leveraging pre-existing infrastructure to reduce costs. CAES employs two primary storage approaches:

Constant Volume Storage

In constant-volume storage systems, specific physical boundaries govern storage space volume while permitting variable air pressure. These systems must adhere to maximum pressure thresholds to safeguard storage vessels. Options encompass natural settings like abandoned mines, salt caves, old natural gas reservoirs, and man-made structures like above-ground pipelines.

Constant Pressure Storage

Constant-pressure storage systems maintain consistent air pressure with variable storage volume. Typically employing colossal bags placed deep in the ocean, they capitalize on oceanic hydrostatic pressure, enhancing turbine and overall power plant efficiency. Although more costly due to deployment logistics, constant-pressure systems open diverse CAES deployment locations.

CAES’s Future and Environmental Influence

With numerous startups and organizations venturing into compressed air energy storage and its diverse applications, the future for CAES systems radiates with promise.

Anticipate a surge in energy storage systems that seamlessly integrate with existing power plants, fueled by escalating energy demands and a burgeoning interest in sustainable energy production models. The stage is set for CAES to emerge as a crucial component in addressing the world’s growing energy needs economically and eco-consciously.

In the near future, expect a proliferation of newly constructed CAES systems characterized by heightened efficiency and enhanced performance. Innovative solutions are poised to optimize their operations as researchers delve deeper into existing CAES systems. Technological advancements within the CAES landscape will solidify its position as an indispensable tool for meeting the burgeoning global energy demand, all while championing ecological sustainability.

The landscape of CAES systems is poised for transformation beyond the confines of traditional salt mines and costly pipelines. Enterprising scientists are exploring alternative storage vessels, ushering in a new era of innovation. Among these pioneering solutions is utilizing colossal bags in the ocean’s depths. These submerged bags leverage the natural pressure of ocean water to sustain air pressure within, offering a visionary alternative to conventional storage methods.

Engineers and Renewable Energy Storage

Engineers play a pivotal role in the success of compressed air energy storage plants, driving the innovation and expertise required for a sustainable future. This is because CAES plants demand specialized engineering skills to ensure efficiency, safety, and reliability.

To be a part of this exciting field and make a meaningful impact, consider the Renewable Energy Courses offered by the Engineering Institute of Technology(EIT). These and the extensive lists of EIT programs are tailored to equip aspiring and working engineers with the knowledge and skills needed to address the unique challenges of CAES and other renewable energy technologies.

Join us now and be at the forefront of the green energy revolution.


How Compressed Air Is Used for Renewable Energy 

Hydrostor strikes deal for Australia’s first compressed air energy storage facility 

Compressed Air Energy Storage: An Overview  

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