Hydrostor – a Canadian company with patented advanced compressed air energy storage technology (A-CAES) designed to provide long-duration energy storage – has signed a binding agreement with Perilya to leverage existing assets at the Potosi mine site near Broken Hill, New South Wales, to support the construction of the Silver City Energy Storage Project.

The estimated AUD 652 million ($415 million) Silver City project, which will store excess solar and wind power in a re-purposed underground mine shaft at the Broken Hill site, will be able to deliver 200 MW of electricity for a duration of eight hours.

In a joint statement, the companies said reserve capacity of 250 MWh will be set aside to provide back-up power during network outages.

“Silver City will operate as a large energy storage asset, connected to the NSW grid and able to trade large quantities of energy on a daily basis,” they said. “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 in the most cost-effective manner.”

Martin Becker, Hydrostor’s vice president of business development and origination in Australia, said that Silver City will be the company’s first operational project in Australia and will serve as a showcase for A-CAES technology.

Hydrostor’s technology features a four-step process for storing and dispatching energy. It draws off-peak or surplus energy from the grid to produce heated compressed air. During charging, heat from the compressed air is collected and stored before the cooled air displaces water out of an underground cavern up to a water reservoir on the surface. To discharge, water flows back into the cavern forcing air to the surface under pressure where it is heated with the stored thermal energy and drives a turbine to generate electricity.

The company said its technology has similar applications and benefits to pumped hydro energy storage but requires only one-20th of the volume of water that conventional pumped hydro needs per MWh of energy storage and has the added benefits of being flexible with location and topography.

“This patented technology allows grid operators to draw on clean energy, even when there is no sun to fuel solar panels and no wind to generate energy from turbines,” Hydrostor said.

While no dates have been provided for the delivery of the Silver City project, Paul Rasmussen, Hydrostor’s Vice President of Integration, said the agreement with Perilya will allow the company to accelerate the development of the facility.

“By leveraging the existing mine investment and infrastructure, this partnership enables us to improve project delivery timeframe, since we can build the underground air storage cavern much faster, with reduced set-up costs and a better understanding of the geology at site,” he said.

The agreement with Perilya includes access to property transactions and existing mine infrastructure, provision of construction support services, and supports the continued and longer-term operation of the Potosi mine during and after the project is being constructed.

The Silver City project has received development funding from the NSW government under the Emerging Energy Opportunities Program and the Australian Renewable Energy Agency (ARENA) has conditionally approved $45 million in funding to help finance the project.

ARENA’s funding for the Silver City Project is conditional upon the project reaching financial close, which is expected to occur in late 2023.