TeesCAES

Executive Overview

TeesCAES is a large-scale adiabatic compressed air energy storage (CAES) project under development by Storelectric in Teesside, northeast England. In February 2026, Storelectric Teesside Ltd — a wholly owned subsidiary — exchanged contracts with SABIC UK Petrochemicals Ltd to acquire approximately 550 acres of industrial land in Teesside, including underground cavern assets and existing above-ground infrastructure well suited to large-scale energy storage. A defined portion of the site has been earmarked for TeesCAES specifically. The project is the only CAES project in the United Kingdom to advance to Stage 2 of Ofgem's Long Duration Electricity Storage (LDES) Cap and Floor regime — a regulatory revenue support mechanism introduced in 2024 — having been selected from 171 applicants. Storelectric's standard design specification is 500 MW with 2.5–21 GWh of storage capacity; no project-specific capacity has been publicly confirmed. No commercial operation date has been disclosed.

How It Works & Differentiation

Storelectric's adiabatic Green CAES™ system uses surplus grid electricity to compress air to approximately 70 bar, storing both the compressed air in underground salt caverns and the heat of compression in proprietary thermal energy storage units. When power is required, the stored air and heat are recombined and expanded through turbines to generate electricity — without burning gas. This adiabatic approach achieves a round-trip efficiency of 62–70% depending on plant size, compared to 42–54% for the conventional diabatic CAES plants operating at Huntorf (Germany, 1978) and McIntosh (Alabama, 1991). The technology platform uses established, off-the-shelf compressor and expander equipment configured in a novel arrangement, validated by independent engineering firms including Mott MacDonald, Siemens, Costain, and Fortum. Teesside's salt geology — Permian-age halite formations used for industrial hydrogen and gas storage since the 1970s — provides naturally airtight cavern storage. In 2023, Storelectric acquired TES CAES Technology Ltd, expanding its IP portfolio and providing access to additional adiabatic CAES technology.

Commercialization & Traction

The Ofgem LDES Cap and Floor regime is the primary revenue support mechanism for TeesCAES and the key commercial enabler for the project. The scheme provides a guaranteed floor revenue and caps upside returns, structurally similar to Contracts for Difference (CfDs) used in renewable energy — designed to make long-duration storage bankable by removing merchant revenue risk. TeesCAES advanced to Stage 2 (project assessment phase) out of 77 projects selected from 171 applicants, and is the only CAES project at that stage nationally. A decision on progression to subsequent phases was expected in the months following November 2025. The acquisition of the Teesside site from SABIC — a former petrochemical operator with existing underground infrastructure — eliminates the need to develop new cavern storage from scratch, reducing both capital cost and lead time for the project. No financing, offtake, or construction timeline has been publicly disclosed.

Scalability & Strategic Context

TeesCAES occupies a strategically distinct position in the UK's LDES pipeline: it is the only CAES project advancing through the Ofgem regulatory process at a time when the National Energy System Operator (NESO) has projected a need for 20 GW of long-duration storage in Great Britain by 2050. CAES's competitive advantage over other LDES technologies at this scale is its use of low-cost geological storage — the cavern capacity provides long-duration energy storage at a fraction of the electrochemical materials cost of equivalent battery systems. Teesside is also a designated Energy Transition Zone and an active industrial cluster for hydrogen and carbon capture infrastructure, providing potential synergies with co-located clean energy projects. Storelectric's broader technology also includes a configuration that can retrofit existing gas-fired power stations (CCGT or OCGT) to CAES where suitable geology is present beneath — a further commercialisation pathway beyond greenfield development.