Canada's Hydrostor eyes role in $1 billion U.S. peak power market
By Alastair Sharp
TORONTO (Reuters) - Canadian underwater energy storage company Hydrostor is eyeing $1 billion of contracts to replace decommissioned U.S. peak power plants in the next two or three years, its chief executive said.
So-called "peakers," electrical generators which are turned on only when demand is highest, are a critical but expensive element of the electricity grid.
Hydrostor and its engineering partner AECOM are targeting dozens of mostly coal-powered facilities of at least 100 megawatt capacity across the U.S. that either shut down in 2016 or will shut this year.
Hydrostor buys off-peak electricity to compress air it stores underwater in balloon-type accumulators. It then reverses the process to generate power and feed it back into the grid when demand is high.
"We are now by far the lowest cost storage solution, we can be built at scale, we've got our partnerships in place and we're going to start marketing it here in the next month or two," Curtis VanWalleghem, Hydrostor's chief executive, said.
Hydrostor will compete for the attention of utilities against battery companies and new, more efficient gas-powered facilities.
"Most of the utilities in the U.S. that are starting to get their feet wet with storage are typically going with these battery plays, mostly because they're a little more flexible," said Craig Sabine, a strategic advisor for utilities at Navigant, a consultancy.
Utilities may also prove reluctant to turn away from gas given years of record shale production which pushed prices in 2016 to their lowest since 1999. Continued...