INTERVIEW: JON NORMAN, PRESIDENT & COO, HYDROSTOR INC.

Jon Norman is a professional engineer with nearly 20 years experience in the power industry, environmental sector, management consulting and government. His company, Hydrostor, is leading the sector in Compressed Air Energy Storage (CAES), with the world’s first adiabatic CAES facility operating in Toronto, and a new CAES demonstration project at the Terramin Australia Angas Zinc Mine in South Australia.

Mr Norman said Hydrostor’s CAES is different from traditional CAES as it doesn’t need to burn gas for heat to generate electricity, and it doesn’t require existing underground storage cavities.

“Traditional CAES requires gas. It has to burn gas in order to put heat into the process when it’s generating electricity, otherwise the air will freeze as it’s expanding in the air turbine. It works, but it’s kind of like having a big natural gas plant on top of all this storage infrastructure underground, so that’s a bit of a disadvantage,” Mr Norman said.

“In our system, we actually take heat from our compression process, and we store it in a thermal management system, we then re-inject that heat back into our turbine when we’re generating electricity. So we don’t require any natural gas, it’s called an adiabatic process.”

Mr Norman said another difference is that traditional CAES requires a large storage cavity underground, typically salt caverns, as these are large enough and can ensure air stays in. However, this can make it hard to find locations for the sites.

“What we do is quite different because we use water to compensate for our air pressure. This is what we’re building in Australia, we actually can purpose-build a cavity underground where we have an upper reservoir of water, and the cavity is like a lower reservoir, down about 300 metres into bedrock.

“When we’re compressing air into that cavity, it’s displacing the water up to the upper reservoir. Then when we’re ready to generate electricity, just the weight of the water pushes the air out and up into the turbine that’s on the surface.

“So we can generate a really large amount of electricity that way, and we can locate it very flexibly. We don’t need a pre-existing salt cavern, we can just site it and we build this cavity in areas of the grid where it’s actually required.”

Benefits of Compressed Air Energy Storage

Mr Norman said CAES is similar to pumped hydro storage but doesn’t require as much water to provide the same generating capacity, and its site location is much more flexible. CAES also has cost and lifespan advantages to battery storage.

“It’s a really good way of storing electricity, it’s much more sustainable in many ways, because it’s a very long-life asset. So we would build a system for 30 plus years, and in fact easily could offer 50 years, or even longer. It’s really just maintaining the rotating equipment on the surface.

“We have a really big cost advantage over batteries as well. Even if you look at the current cost of batteries, plus all the balance of plants that they require and how they need to connect to the system. Our system for the given scale, if you were to build a 50 or 100-megawatt battery system, we would be about half the price.

“The key really is finding the spots on the system where the utility can really benefit from this, and then installing it. I guess you could say there’s a disadvantage for our system as it just really doesn’t work at a small scale – we need to be doing this at sizes greater than 50 megawatts.

“Clearly batteries will always have a place in the system located in a very distributed manner… where they provide very fast response times, but they cannot provide the level and duration of storage that we can provide.”

 Strong potential for storage growth in Australia

Out of all the markets Mr Norman is working in globally, he said Australia is perhaps one of the top two priorities as it has a sophisticated mining sector to partner with on constructing underground cavities, and the government and energy sector is seizing on the importance of storage, and the opportunities it presents.

“We see a lot of potential in Australia because obviously the signals for storage are quite strong. The need for storage on the grid is quite real. There’s retiring infrastructure, fossil infrastructure, throughout the country that we can actually replace.

“The system really does have a strong need for it, and the powers in charge of the electricity system are very much recognising that, and are taking actions to ensure that storage is developed, and can provide these kinds of services onto the grid.

“I think Australia is ahead of the curve, but there’s a number of other jurisdictions in the world that are really quite advanced in their thinking on storage as well. California comes to mind. Ontario is another place, as is Chile.”

And what can Australia learn from its international neighbours when it comes to moving energy storage technologies forward?

“It’s important to recognise that there needs to be a clear opportunity to deploy capital to build these projects. That means there needs to be some level of revenue certainty, some level of political sustainability, some level of market certainty. Australia does many of these things well.

“Another area that’s important is just trying to complement the market structure, which is really providing short-term market signals. Like short-term price signals, saying today this is what something’s worth, but if you’re going to build a 30-year plus asset, there needs to be more recognition of the long-term benefit of that.

“Sometimes there needs to be outside contracting mechanisms to allow that to happen, to really facilitate the penetration and make sure that there isn’t just a very short sighted view of the market price today, versus potential value of a 30-year asset, ten years into the future. You kind of need a diversity of resources.

“Longer term infrastructure needs a bit more of that certainty, and you really need that mix of both to make the system work.”