Toronto, Ontario-headquartered Hydrostor has secured a US$200 million investment for its advanced compressed air energy storage (A-CAES) projects both in Canada and globally.
The investment came from Canda Growth Fund (CGF), Goldman Sachs Alternatives and Canada Pension Plan Investment Board (CPP Investments).
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The investment includes a US$150 million convertible note financing commitment from the three investors. CGF has also made available an additional US$50 million convertible development expenditure loan facility to fund a portion of development costs for Hydrostor’s Canadian projects, such as the Quinte Energy Storage Centre project, a 500MW/4,000MWh A-CAES project in Lennox and Addington County, Ontario.
The CGF was set up in December 2022, with strategic aims of reducing emissions and helping Canada meet climate targets and accelerating investment into technologies like low-carbon hydrogen and carbon capture and storage.
CPP Investments has also made investments in other energy storage developers such as Form Energy, Northvolt, Cordelio and more.
In 2022, Goldman Sachs made a US$250 million investment into Hydrostor. That investment, which is thought to be among the largest commitments by a single investor into a long-duration energy storage (LDES) company, was to help Hydrostor accelerate project execution through development, construction and operations, together with the company’s existing investors and partners.
Energy-Storage.news heard from Hydrostor’s CEO Curtis VanWalleghem, in a 2022 interview on how the company believes it has improved compressed air to be competitive and a key part of the energy system.
At the beginning of 2025, The US Department of Energy’s (DOE) Loan Programs Office (LPO) made a conditional commitment for a loan to Hydrostor of up to US$1.76 billion. The loan would be used to help fund the Willow Rock Energy Storage Centre, a 500MW/4,000MWh, 8-hour A-CAES in Eastern Kern County, California, led by Hydrostor subsidiary GEM A-CAES.
However, due to Donald Trump’s order to pause fund disbursement through the Inflation Reduction Act (IRA) and Bipartisan Infrastructure Law (BIL), the fate of many of the LPO’s conditional commitments and finalised commitments, including Hydrostor/GEM-A-CAES are up in the air.
Compressed air energy storage (CAES) charges by pressurising air and funnelling it into a storage medium, often a salt cavern, and discharges it by releasing the compressed air through a heating system, which expands air before it is sent through a turbine generator.
A-CAES (Premium access article) works in much the same way, but it takes the heat from the compressor and runs it through heat exchangers to store it in pressurised water. The water is then held in a reservoir and pushed down into a cavern to push the air up and out when discharging, in a process called hydrostatic compensation.
With CAES, less than 50% of energy is typically recoverable. Thermal energy from compression is released as waste in CAES; the process also generates power at an inconsistent rate dependent on the remaining underground air pressure.
Hydrostor says it has late-stage projects in New South Wales, Australia and California, US, targeted to begin construction in 2025.
The company’s website has one project listed in New South Wales, the 200MW/1,600MWh Silver City project in Broken Hill.
The only project listed in California is the previously mentioned Willow Rock Energy Storage Centre, for which the company signed a 25-year power purchase agreement (PPA) with Community Choice Aggregator (CCA) Central Coast Community Energy.
Curtis VanWalleghem said of the announced investment from GCF, Goldman Sachs and CPP Investments:
“This investment is another vote of confidence in Hydrostor’s technology and our ability to bring our initial projects to market, as well as continue to build our robust project pipeline. I’m thrilled to bring Canada Growth Fund onboard as one of our major investors, and equally as excited by the continued support for our company and our technology from Goldman Sachs and CPP Investments.”
