Silver City Energy Storage Center

Executive Overview

The Silver City Energy Storage Centre is a 200 MW / 1,600 MWh Advanced Compressed Air Energy Storage (A-CAES) project under development by Hydrostor adjacent to the Potosi Mine in Broken Hill, New South Wales, Australia. The project received development approval from the NSW Department of Planning, Housing and Infrastructure in February 2025 and holds a 65-year Crown land lease from the NSW government. Construction was expected to commence in 2025 with a targeted operational date of Q4 2028. Silver City is the first A-CAES project in Australia and will be capable of operating as an island grid — supplying the entire town of Broken Hill from storage alone, independent of the National Electricity Market (NEM) — with 250 MWh of dedicated backup reserve. The project holds a Long-Term Energy Service Agreement (LTESA) from AEMO Services under the NSW Electricity Infrastructure Roadmap, a Network Service Agreement with Transgrid, and US$55 million in financing from Export Development Canada. The total project investment is approximately AU$638 million. Backup power is expected to be available as early as 2027.

How It Works & Differentiation

Hydrostor's A-CAES system stores surplus electricity by compressing air into the existing underground caverns of the Potosi Mine, with thermal energy captured during compression stored in proprietary thermal storage tanks for use during discharge. When power is needed, compressed air is released, reheated by the stored thermal energy, and expanded through turbines to generate electricity — no natural gas combustion required. The system can supply its full 200 MW output for 8 hours per charge (1,600 MWh), or sustain the entire 50 MW peak demand of the Far West electricity network for over 30 hours without recharging. Broken Hill's existing infrastructure — a decommissioned mine with underground caverns suitable for pressure storage — eliminates greenfield cavern development costs. The facility can also charge and discharge simultaneously, providing genuine grid flexibility.

Commercialization & Traction

Silver City benefits from one of the most complete project financing and offtake structures of any A-CAES project globally: NSW Government development funding (Emerging Energy Opportunities Program), ARENA project funding, EDC debt financing, a Transgrid network service agreement, and the AEMO Services LTESA. The net benefit over the 27-year assessment period is estimated at approximately AU$286 million. The project is expected to replace ageing diesel-fuelled turbines in the Broken Hill mini-grid and will contribute up to 750 direct and indirect construction jobs and approximately AU$550 million in NSW GDP. Hydrostor recently secured US$200 million from the Canada Growth Fund, Goldman Sachs Alternatives, and CPP Investments — corporate capital that accelerates construction readiness across its global pipeline including Silver City and Willow Rock (California, 500 MW).

Scalability & Strategic Context

Silver City is among Hydrostor's most advanced projects by development stage, alongside Willow Rock in California, and serves as the first Australian proof-of-concept for A-CAES at commercial scale. Broken Hill's remoteness and mini-grid structure make it the ideal setting to demonstrate island-mode A-CAES operation — a capability that lithium-ion BESS typically cannot match at multi-day duration. A successful Silver City commissioning would validate A-CAES for application across Australia's numerous isolated and semi-isolated grids, and supports Hydrostor's broader project pipeline of approximately 7 GW globally across New South Wales, Victoria, South Australia, New York, Arizona, Nevada, and the UK.