New down to earth energy solution in the outback

Compressed air energy storage is coming to Australia. Hydrostor, a Canadian company has given the go-ahead to build a 200MW  facility at Broken Hill in far western NSW.

Construction of the Silver City Advanced Compressed Air Energy System (A-CAES), only the second in the world, is slated to cost at least $652 million, with $45 million to come from the Australian Renewable Energy Agency (ARENA), and is due to start at the end of 2025.  

Plenty of power is on offer. Broken Hill has a population of 17,500 with an average electricity demand of 40MW, says electricity supplier, TransGrid. Silver City could power 80,000 homes in peak demand.  

A-CAES pumps compressed air down a 600m deep shaft into a water-filled underground cavern. The air displaces the water which goes up another shaft, at the other end of the cavern, into an above-ground reservoir. When electricity is needed, the compressed air is forced back up its shaft through a surface turbine and the stored water falls back into the cavern, via a turbine, creating energy.

Sounds simple. But why do it?

To provide an energy store in times of congestion, Martin Becker, Hydrostor’s Senior Vice President Origination and Development told Cosmos. “There’s lots of capacity being built, but not always, all day, every day, a need for that capacity to get dispatched.” ‘Dispatched’ is electricity-speak for ‘sent down the line so consumers have power’.

Broken Hill has two existing renewable energy facilities. Broken Hill Solar has 53MW of capacity and is 7km west of town; Silverton Wind Farm is 200MW and is 25 km to the north-west.

“If there are constraints on the transmission line, that energy basically sits idle” says Becker.

The Silver City facility will use that otherwise idle energy to run its utility-scale compressor, pushing air 600m underground to displace the cavern water and push it to the surface.  

“When we want to generate electricity, we release a valve on the surface under the reservoir, and then the water rushes down the shaft and pushes the air back to surface.”

Hydrostor’s A-CAES was selected by the City of Broken Hill, to “be an energy supply in the event of an outage” says Becker.  Broken Hill has struggled with outages. A storm in October 2024 knocked out powerlines and 7 transmission towers.  

“We will be contractually obliged to keep air in the tank in case there is an outage. So, we would start to discharge and generate when there’s an outage. We’re replacing the aging diesel generators that are at end of life.”

Hydrostor claims that their patented system, called ‘hydrostatic compensation’ maintains constant pressure in the storage cavern, a flooded void pressurised by the weight of water.  The system gives the company its name.

Turbines work better when they are warm.  Heat produced by the compressor is captured and stored as hot water in insulated, aboveground tanks until released to “fire the turbine”, says Becker. 

“This avoids heating the turbine with fossil fuels and makes the system an adiabatic CAES,” he says.

Batteries aren’t the cheapest energy storage systems.

In thermodynamics, ‘adiabatic’ means that energy doesn’t leave the system.

Becker says the Silver City project is similar to pumped hydro. “It’s the closest thing to pumped hydro, because pumped hydro uses a large head of water.”

International renewable energy expert, Michael Barnard, who is not involved with the project, told Cosmos that A-CAES is less efficient than pumped hydro.

Barnard says the two other older compressed air systems,  a 580MW system in Germany built in the 1970’s, and a 2,860MW facility in Alabama in the 1990’s, are 42% and 54% efficient at returning electricity that is put into them, (called Round Trip Efficiency or RTE)  These are older-style CAES, not A-CAES.

Becker says “We are looking at 60-65% RTE.”

Compare that to around 80% for pumped hydro. “It’s a lot easier to pump water and spin turbines with water, than it is to compress gases and spin turbines with gases”, says Barnard. Energy losses of about 10% are expected each way with pumped hydro, those increase to 20% or more with compressed air, he says.

The site at Broken Hill will be in one of the silver, lead and zinc mines which were discovered in 1883, by the mining company which later became BHP.

Hydrostor is using the Perilya Potosi working mine to create a hard rock cavern. Hard rocks like granites are not permeable.

They’ll drill and blast their own cavern, says Becker.

Trucks will carry the debris up to the surface using the mine’s ramps and tunnels, a major saving on digging and blasting out the void and removing the rock by hoist.  Two shafts, one for water, one for air will be sunk down to the cavern, and access to the mine will be sealed with a bulkhead, says Becker, completing the underground operation. 

Expansion would mean repeating the process, and linking the two caverns, he says.

“With a slightly bigger cavern and reservoir so you could produce 50% more energy for 5 or 6% more cost, because it’s just civil work. The top side stays pretty much exactly the same, because you’ve still got the same size generators, turbines, compressors, heat exchangers. You just got more fuel in the tank, so you’re just building bigger, so on $1 per megawatt hour basis, it becomes far more cost effective.

“Duration and scale work for us,” Becker says.

Consideration of scaling-up when capacity is already well above that needed for the 17,500-strong Broken Hill population suggests Hydrostor has other plans for the excess energy.

Becker told Cosmos: “The excess power generated by the Silver City project above and beyond the needs of the Broken Hill region or the mini-grid during an outage will be supplied into the national grid, increasing the penetration of renewable energy into the system.”

Whether the often-repaired local grid is capable of handling such a load is another question. Broken Hill’s only connection to the national grid is back up and running after the October 2024 storm.

There are a host of other possible barriers to success. “Drilling underground is risky,”  Barnard says.

“Once you get underground, stuff happens”, says Barnard. “Water creeps in from somewhere. Air creeps out. For compressed air caverns, what you want is a moist overburden that seals all those cracks.” Broken Hill is notoriously dry.

200MW of power is in the air

The A-CAES will “have enough in the tank to run at 200 megawatts for 8 hours, around 100MW for 16 hours, but its not quite linear, because machines get less efficient as they run down, Becker says, so 25MW could be supplied for 32 hours.  “We have 1600 megawatt hours of fuel, but the duration is dependent on what at what level you’re generating at.”

“One of the things I like about them is they’re not claiming stupid efficiency,” says Barnard.

“You’re in a mining country with miners, and you already have the subsurface geology well mapped out. You’re already digging stuff there. Then Hydrostor makes as much sense as anything.”