An energy storage agreement (ESA) between Toronto, Ontario-headquartered developer Hydrostor and California community choice aggregator (CCA) Central Coast Community Energy (3CE) is set to be amended for the third time.
According to documentation from a recent 3CE Board of Directors (BOD) meeting, Hydrostor approached the CCA in April 2025 requesting a price adjustment coupled with a 13 month delay to its Willow Rock Energy Center.
The project, which is set to utilise Hydrostor’s proprietary Advanced Compressed Air Energy Storage (A-CAES) technology, is destined for Kern County, California, and expected to have 500MW/4,000MWh of capacity.
Initial contractual amendments
With the Willow Rock facility initially set to enter commercial operation in June 2028, the two parties first entered into the ESA during December 2022.
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This deal entitled 3CE to resource adequacy (RA) and energy tolling revenues from a 200MW/1,600MWh portion of the project for a period of 25 years for an amount not to exceed US$775 million.
However, during December 2023, 3CE agreed to extend the contractual commercial operations date associated with the agreement by 18 months, which, according to 3CE, was to allow “more time for [Hydrostor] to secure financing.”
Around this time, the California Energy Commission (CEC) put Hydrostor’s Application for Certification (AFC) on hold whilst the developer reassessed the design of its Willow Rock project, focusing on cavern and transmission suitability. In June of that year the CEC had paused work on the project while Hydrostor conducted further site viability work.
Although the CEC has since resumed its review of the project, the pause in permitting was described by 3CE as the “driver” of the initial delay. The CEC is expected to issue its final decision by the end of the year, which, if approved, would allow Hydrostor to commence construction of the project.
After exercising its contractual right to delay certain project milestones during the first half of 2024, the contract with 3CE was then formally amended for the second time in December 2024.
As part of this amendment, Hydrostor’s deadline to secure financing and commence construction were extended to November 23, 2025.
This second amendment was initiated after utility Southern California Edison (SCE) informed Hydrostor that transmission upgrades required to connect the project to the California Independent System Operator (CAISO) grid, wouldn’t be completed before the project’s contractual online date.
This was in spite of Hydrostor having already secured an interconnection agreement with SCE and CAISO for its Willow Rock facility, which was processed as part of the California system operator’s Cluster 13 group that was first submitted in 2020.
The project is expected to connect to the CAISO grid via SCE’s Whirlwind 230kV substation.
Third amendment
In April of this year, Hydrostor notified 3CE that it had still been unable to secure financing for the project due to continued permitting and interconnection challenges, alongside additional “economic pressures due to inflation, increased financing and other delivery costs.”
In light of these additional delays to the Willow Rock project, Hydrostor requested a 13-month delay to the project’s commercial operations date, coupled with a 15.5% contract price increase, taking the total cost for 3CE from US$775 million to US$895 million.
Before bringing this amendment to its BOD, staff at 3CE said that they considered a “number of different scenarios and contract structures” before coming to a mutually beneficial agreement with Hydrostor that maintained value for its customers.
As reported by Energy-Storage.news during January 2025, Hydrostor’s Willow Rock facility was one of several energy projects earmarked for a federal funding by the outgoing Biden Administration in the form of a conditional commitment loan totalling US$1.76 billion.
However, all loans were put under review by the Trump Administration during the following month. Since then, the DOE has announced the cancellation of over US$7.5 billion-worth of federal financial awards, though Hydrostor told Energy-Storage.news it has continued to work with the DOE to move the loan forward throughout this time.
Although several internal government documents have been leaked supposedly revealing lists of impacted projects, the situation is still very unclear.
Global developments
Elsewhere in Australia, Hydrostor recently secured US$55 million in funding to advance the development of its Silver City Energy Storage Center located in New South Wales, Australia.
This project, which will also utilise Hydrostor’s A-CAES technology, was approved by the state’s Department of Planning, Housing and Infrastructure (DPHI) in February 2025, allowing for construction to commence.
Hydrostor also received a US$200 million investment earlier this year from Canada Growth Fund (CGF), Goldman Sachs Alternatives and Canada Pension Plan Investment Board (CPP Investments), which the developer is expected to put towards advancing its A-CAES technology.
This article was amended after publication to update the reference to Hydrostor’s DOE loan.
