Cache Power plans ‘Canada’s first’ commercial-scale compressed air energy storage facility

December 3, 2025
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Compressed air energy storage (CAES) developer Cache Power is partnering with construction company EllisDon to deliver a CAES facility in Northeast Alberta, Canada.

The facility will be constructed in two phases and located next to the Marguerite Lake substation to enhance efficiency and facilitate grid integration.

Cache Power does not have any information on its website, but appears to be a special purpose vehicle (SPV) for Federation Engineering.

On Federation’s website, the company clarifies that the Marguerite Lake facility will have a 250MW load capacity and 640MW generation capacity. Energy storage capacity or planned duration were not referred to in publicly available materials.

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The companies assert that the technology will be essential in stabilising Alberta’s grid and supporting both provincial and national efforts toward a net-zero electricity future. The project has secured all key regulatory approvals, with early construction scheduled to start soon.

CAES technology operates by pressurising and directing air into a storage medium to load the system. When discharging, the stored air is released through a heating system to expand, driving a turbine generator.

Notably, the companies claim the project will be the first commercial scale CAES facility in Canada.

Ontario-headquartered Hydrostor is known for its advanced compressed air energy storage (A-CAES) projects.

A-CAES operates similarly to traditional CAES but captures heat from the compressor and passes it through heat exchangers to store in pressurised water. This water is kept in a reservoir and then released into a cavern to displace air during discharging, a process known as hydrostatic compensation.

In conventional CAES, less than 50% of the energy can typically be recovered. The thermal energy produced during compression is often wasted, and the power output varies depending on the residual underground air pressure.

Hydrostor has two small operational projects in Canada, one a pilot and the other a commercial demonstrator, with the larger one being a 2.2MW/10MWh commercial system in Goderich, Ontario.

Hydrostor noted the Goderich Energy Storage Centre as the world’s first commercially contracted A-CAES facility. In addition to its role as technology provider, the A-CAES company is also developing large-scale projects around the world, including its 1.6GWh Silver City project in New South Wales, Australia, and 4GWh Willow Rock project in California, US. The company has secured some funding and offtake agreements for both, including a recent renegotiation of contracts for Willow Rock (ESN Premium article).

It has also proposed a 500MW/8,000MWh project in Ontario (ESN Premium), adjacent to Ontario Power Generation’s Lennox Generating Station in Greater Napanee.

Speaking with Energy-Storage.news, a representative from Federation clarified that the distinction between the CAES system titles for itself and Hydrostor came down to scale and usage.

Cache Power’s facility can store up to 48 hours of energy by compressing air with excess grid electricity and sequestering it in underground salt caverns formed through solution mining. 

It can also blend up to 75% hydrogen with natural gas, with a future plan for complete hydrogen utilisation, aligning with Canada’s net-zero ambitions.

Power plant equipment supplier Babcock & Wilcox are collaborating on engineering the possible hydrogen facility expansion, employing the company’s BrightLoop technology.

Babcock & Wilcox claim that BrightLoop can produce hydrogen while isolating carbon dioxide for capture and storage.

Additionally, Cache Power states it will deliver economic and social advantages to the local community and Indigenous Partners. Cold Lake First Nations has actively engaged in the project’s development and is anticipated to collaborate as a partner with Cache Power in both the project and its operations.

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