Chapter 1: The Challenges of Compressed Gas Storage

In recent discussions, I explored the thermodynamics and operational hurdles that restrict the viability of compressed gas storage solutions, relegating them to a mere 100 GW of limited capacity. Various comments have drawn attention to the now-defunct LightSail and the currently-publicized Hydrostor, making a follow-up on these technologies worth exploring.

To put things in perspective, only a handful of sizable compressed air storage systems are integrated into power grids, and these have been in operation for many years without any new installations. The core principles of physics, thermodynamics, and electrical generation have remained unchanged due to their long-established nature. The concept of using compressed gases for energy storage has existed for centuries, and any claims of revolutionary advancements in this area require substantial proof, which has yet to surface.

LightSail, associated with Silicon Valley and Peter Thiel's circle of 'energy disruptors,' ultimately failed because the electric grid operates differently than the internet; electricity cannot be packaged like data, nor are there comparable breakthroughs like fiber multiplexing in energy transmission. Thiel and Danielle Fong misjudged the grid's characteristics, hoping to replicate the disruptive effects seen in legacy media and communications, but they lacked a sound understanding of the underlying physics and economics, leading to their downfall.

I first encountered LightSail in 2011 through my Quora interactions, where I briefly engaged with Fong. Their proposed 'innovation' involved carbon fiber tanks designed to withstand 200 atmospheres of pressure, along with various techniques to facilitate efficient compression. For context, a metric ton of air at sea level occupies around 840 cubic meters at 20°C, while at 200 atmospheres, it condenses to approximately 4.3 cubic meters. The energy required for this compression is about 2.35 MWh.

A significant challenge for compressed air storage is the necessity for large, airtight caverns. Although possible with salt and hard rock construction, operational pressures typically range from 40 to 80 atmospheres, with one Chinese salt cavern potentially reaching 180 atmospheres. The higher the pressure, the more complex the compression and sealing requirements become.

On a related note, hydrogen transportation poses similar challenges, as it must be compressed to 350 to 700 atmospheres, a much higher threshold, given that hydrogen is a considerably smaller molecule than both nitrogen and oxygen.

The industry has long mastered the compression of air to 200 atmospheres, which casts doubt on Fong and her team's claims of groundbreaking advancements. While their ideas weren't as exaggerated as Theranos's, the thermal management and pressure levels they addressed have been industrial standards for a long time. Their key innovation was to eliminate the need for caverns by pushing pressure levels higher than conventional systems, though this came with the downside of expensive, custom-spun fiber tanks. During a period when carbon fiber was heavily promoted, their connections to venture capitalists and the tech community certainly aided their visibility, as did Fong's appealing public persona.

However, LightSail encountered the same fundamental efficiency issues I previously highlighted: the costs associated with their tanks and compression equipment outweighed the energy value. Their limited understanding of the broader electricity market also hindered their ability to find buyers.

Like many startups, they pivoted to a more natural market, focusing on compressed fossil gases. Most of the caverns built globally—over 2,000 salt caverns and about 200 hard rock caverns—are primarily used for storing natural gas, crude oil, or liquified petroleum gas. Their shift from attempting to disrupt electricity markets to targeting the gas industry ultimately did not prove successful. What was framed as a pivot was more of a liquidation of assets as the company shut down.

Interestingly, LightSail's initial business model aimed to power an urban scooter. This indicates they were starting with a predetermined solution—compressed air and carbon fiber—rather than addressing an existing need. They attracted approximately $70 million in funding from notable figures like Khosla and Gates, only to reveal that their concept lacked merit.

However, subpar ideas that repeatedly fail to compete in the market continue to attract new investors.

The first video, "Balloon Storage Q&A - YouTube," discusses the intricacies and challenges associated with innovative storage solutions, providing insights that parallel the concerns raised here.

Chapter 2: Hydrostor's Position in the Market

Currently, one of the more prominent players in compressed air technology is Hydrostor, a Toronto-based startup that has secured significant investment, including $250 million from Goldman Sachs for specific projects.

Like other compressed air firms, Hydrostor claims to possess a unique advantage, yet they do not make overly ambitious statements about their round-trip efficiency. Instead, they rely on established technologies rather than claiming to have reinvented the wheel.

Ironically, Hydrostor's solution resembles an underground pumped hydro system with additional energy-consuming processes that they assert provide benefits. In their model, when energy storage is needed, water is displaced from an underground cavern as they pressurize air, pushing it into a surface reservoir. While this is essentially a pumped hydro system, it utilizes less efficient gas compressors and turbines rather than more effective reversible water turbines.

If they do not enhance their process, their energy output will be limited to the available water energy in the reservoir. This is fundamentally no different from traditional pumped hydro. They claim to achieve greater efficiency with the same amount of water, but such assertions do not withstand scrutiny.

In simpler terms, the core of their process involves raising mass to generate potential energy. The potential energy is held back by the pressurized air in the cavern. When allowing the water to flow back, they cannot extract more energy than was used to elevate it.

Despite their claims, one of Hydrostor's presentation decks on the DOE's website includes a remarkable assertion: with the same head as the A-CAES system (600m), pumped hydro requires about five times more water than A-CAES (150m³/MWh vs. 770m³/MWh). Even at a conservative head of 150m, pumped hydro demands approximately 20 times more water than A-CAES (150m³).

Remember, this involves calculating mass times acceleration due to gravity times height. Five times more water equates to five times the mass at the same height, which corresponds to five times the potential energy. Regardless of the method used to pump water uphill, Hydrostor is fundamentally still moving water upward as the basis for energy storage.

Given that the executives lack STEM backgrounds, it's possible they simply overlooked this critical point. However, it raises questions about the validity of their other claims.

Building underground caverns incurs significant costs. A large storage cavern can hold a million barrels of oil, translating to about 160,000 cubic meters. At a 400-meter head height, that results in only about 174 MWh of energy storage. While this may sound substantial, pumped hydro systems typically yield much higher capacities. Increasing the size and depth of caverns adds to costs in two ways: more rock must be excavated and removed, and unforeseen geological challenges can arise during construction.

The only real advantage of Hydrostor's method is that the use of water helps maintain air pressure, allowing for slightly more efficient turbine operation while reducing the required cavern size. This statement is accurate, but it is also possible that they seal the outlet to the surface reservoir once equilibrium is reached, allowing for increased gas pressure. If true, this would mean they store more energy than traditional pumped hydro, albeit with added mechanical complexity.

However, the presence of water prevents the use of cost-effective and low-risk salt caverns for compressed air storage, as erosion could jeopardize the system's integrity.

The overwhelming presence of salt caverns for fossil fuel storage compared to hard rock caverns highlights the cost and risk factors involved. As Professor Bent Flyvbjerg's extensive data on megaprojects indicates, underground infrastructure construction carries heightened risks. Tunnels frequently face budget and schedule overruns due to unforeseen discoveries, and while mining risks are significant, they are less than those encountered with above-ground assets.

Hydrostor correctly notes that their solution can be implemented where traditional pumped hydro cannot, though this is not particularly groundbreaking. The necessary conditions for their method include solid rock, adequate groundwater to prevent leaks, flat terrain, and a lack of transmission infrastructure.

Currently, Hydrostor operates two facilities: a basic lab version and a small operational site in Goderich, Ontario, with a storage capacity of 10 MWh, comparable to a few Tesla Megapacks.

They have two projects under development, one in Broken Hill, NSW, Australia, and another in California. The Australian site is situated in a relatively flat area with minimal transmission infrastructure, justifying the need for energy storage. However, the semi-arid climate may lead to air leakage, impacting efficiency.

In California, the site near Bakersfield benefits from a robust grid but faces geological challenges that complicate cavern construction.

Hydrostor claims to achieve round-trip efficiencies greater than existing compressed air systems, which operate at 42% to 54%, with Hydrostor suggesting a hopeful 60% efficiency.

Ultimately, what is Hydrostor competing against? Primarily, traditional pumped hydro systems. The Australian National University's atlas reveals numerous viable sites for closed-loop, off-river pumped hydro with significant head height, close to transmission lines and away from protected land.

It is essential to recognize that generating electricity from water through spinning turbines is generally more efficient than doing so with air. The distinct properties of gases versus liquids yield round-trip efficiencies exceeding 80%, and water remains stationary in reservoirs, further enhancing this efficiency.

Consequently, pumped hydro has become the dominant energy storage solution in the grid, with a long history dating back to 1907. In contrast, compressed air systems have remained limited to a couple of aging sites in Germany and the USA.

In conclusion, while Hydrostor may achieve a few operational projects, it remains firmly in the also-ran category of grid storage, much like its compressed gas counterparts examined over the past decade.

The second video, "Exploring Air & Air Pressure - YouTube," delves into the principles of air pressure and its applications, reinforcing the technical discussions throughout this text.