Hydrostor, led by CEO Curtis VanWalleghem, has secured US$55 million in funding from Export Development Canada (EDC). This latest capital injection will support development of Hydrostor’s 200 MW Silver City Energy Storage Centre project in Broken Hill, New South Wales, Australia.

Hydrostor is a developer and operator of long-duration energy storage systems using advanced compressed air energy storage (A-CAES) technology. Their tech enables grids to store energy for eight hours or more, letting utilities draw on clean electricity even when solar and wind are inactive. Founded in 2010, the company has offices in Toronto, Melbourne, and Denver.

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What Hydrostor Is Building & Why It Matters

The Silver City project represents a major inflection point. A 200 MW facility with long-duration storage capability isn’t just about capacity - it’s about grid reliability. As more intermittent renewables come online (solar by day, wind by night, etc.), there’s increasing demand for storage systems that can carry energy through multi-hour periods without output (dusk to dawn, wind lulls, storms).

Hydrostor’s A-CAES uses compressed air plus water to store energy. When demand arises, the stored compressed air is released, heated, and expanded through turbo machinery to generate electricity. This method can be more durable than many chemical battery systems over long durations, potentially with lower cost per MWh for long storage.

The $55 million from EDC is structured as a development expenditure facility / credit facility to cover the Silver City development costs and associated letters of credit. This means Hydrostor doesn’t just get a grant - it gets a financing mechanism to ensure project momentum while retaining financial discipline.

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What Founders Can Learn: Building Big in Deep Tech

Here’s a deeper insight that often gets glossed over in energy tech startups: True defensibility comes from mastering project risk, regulatory landscapes, and execution cadence - not just core technology.

Hydrostor isn’t just inventing A-CAES - they’ve been doing it for over a decade, refining everything from the cavern or vessel design, thermodynamics, grid interconnection, permitting, and environmental impact. A project like Silver City involves complex regulatory approvals in Australia, local stakeholder relationships, financing, construction, and long-term operations.

Founders in deep tech - especially energy, climate, biotech - should plan for 3 layers concurrently:

1. Technology R&D (the science, patents, engineering)
   
2. Regulatory & Permitting Pathways (local approvals, environmental impact, utility interconnection, grid safety)
   
3. Financial Structures & Stakeholder Alignment (government credit or loan facilities, offtake partners, community support, long lead times)
   

Hydrostor has synchronized those three: its decade plus of R&D, its ability to engage regulatory bodies across geographies, and its ability to structure finance via governmental partners like EDC. That alignment gives them the credibility, the risk mitigation, and speed - so scaling isn’t just slower versions of pilots but full-scale utilities.

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Why This Raise Changes the Game

This $55M facility from EDC isn’t just another round - it’s a validation. It signals that governments are ready to back gigawatt-scale, long-duration energy storage beyond battery storage alone. It shows that compressed air systems are not theoretical - they are ready for major deployment.

Silver City will be one of the benchmark long-duration storage centres globally - 200 MW means it can serve a large utility grid segment. For Australia specifically, which has had challenges with grid stability and blackouts during periods of low solar/wind, this kind of storage gets more than just media headlines - it delivers resilience.

Also, Hydrostor has a pipeline of more than 7 GW of early-stage projects in Australia, Canada, Europe, and the U.S.

With strong pipelines, backing, and demonstrable deployment, Hydrostor is moving from proof to scale - allowing the company to push down costs, refine operations, and move into new geographies.

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The Larger Market & Context

Hydrostor’s raise and project are part of a bigger narrative in energy transition. A few key trends and stats giving context:

• Governments globally are tightening supply reliability and clean energy mandates. Long-duration storage is increasingly seen as essential to integrate high shares of renewables.
  
• Battery cost declines have been impressive, but limitations of battery storage (material cost, degradation, safety, scale) make solutions like A-CAES more attractive for multi-hour, high-capacity storage.
  
• Grid outages during dark or windless periods are becoming more costly. In many places, utilities are paying penalties or suffering lost revenue during demand peaks. Access to reliable long-duration storage means adding buffer capacity.
  

For example:

• According to the International Energy Agency (IEA), storage capacity globally will need to grow by hundreds of GW by 2030 and beyond to support renewable deployment goals.
  
• A recent report suggests that long-duration storage (≥8 hours) could become one of the linchpins of clean energy grids in the U.S., Europe, Australia and Asia, especially in locations with high renewable penetration.
  
• Energy storage deployments are growing: in 2024, many grid operators requested procurement of multi-hour storage, not just short duration battery systems.
  

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Challenges & Execution Risks

Even with technical maturity, projects like Silver City face significant risks:

• Permitting & environmental impact: Compressed air systems may require specific geology or geotechnical assessments, water usage approvals, local community engagement.
  
• Capital intensity and upfront cost vs revenue certainty: Without solid offtake or feed-in tariffs, revenue streams may be uncertain. Having government/backed credit facilities helps, but offtake contracts or power purchase agreements (PPAs) still matter.
  
• Operational complexity: Energy storage systems need extremely high reliability, safety, and operational lifetime to deliver cost competitiveness. Any downtime or inefficiencies reduce margins.
  

Hydrostor’s decade of experience helps mitigate many of these risks, but success depends on execution: meeting timelines, staying within budget, interacting well with local stakeholders, and maintaining technical performance.

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Looking Ahead: What $55M Unlocks & Broader Impacts

With this funding, Hydrostor is positioned to:

• Bring Silver City online and use learnings to optimize design and costs for future deployments.
  
• Prove unit economics of A-CAES at utility scale, helping to drive down levelized cost of storage (LCOS).
  
• Use the credibility of EDC’s backing to attract further investment and partnerships.
  
• Expand its pipeline: more projects in development in multiple geographies will benefit from the learning curve and economies of scale.
  

Broader impacts include enabling grids to accommodate more solar and wind, reducing reliance on fossil generators for peaking power (e.g., gas peaker plants), lowering carbon emissions, improving grid resilience, and perhaps importantly, unlocking cheaper clean energy.

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Final Take

Hydrostor’s US$55 million advance is more than a project finance milestone - it’s a statement. Long-duration energy storage, especially via advanced compressed air, is moving from theory to essential infrastructure. For founders, energy tech startups, and climate investors, Hydrostor serves as a case study in how aligning technology readiness, regulation, financial structure, and stakeholder confidence can unlock large-scale impact.

This round doesn't just fund one centre - it galvanizes the potential for a global energy storage paradigm where intermittency is no longer a problem, but an opportunity to engineer more resilient, clean power systems.