Hydrostor, Canada’s leading developer of long-duration energy storage projects, is moving ahead with its $1.5 billion Willow Rock Energy Storage Center in Kern County, California. The project uses compressed air to store renewable energy and will deliver 500 MW of power for up to eight hours. It’s almost 2X that of most lithium-ion battery systems can sustain. If completed, it would mark the first compressed air energy storage (CAES) facility built in the U.S. in more than 30 years.
S&P Global recently provided an update regarding its permit processes for the Willow Rock Energy project. It is working to complete California’s permitting process by 2025 to qualify for federal clean energy tax credits and secure the $1.76 billion conditional loan guarantee from the U.S. DOE, which was announced on January 8. The loan includes roughly $1.5 billion in principal and about $280 million in capitalized interest. However, delays from the California Energy Commission (CEC) are putting that goal at risk.
Permit Delays Threaten Hydrostor’s Project Timeline
On April 15, the CEC released its fourth revised schedule. It pushed the preliminary staff assessment to April 30 and rescheduled evidentiary hearings to August 18–19. Although the commission still targets a final decision by December, regulators admitted during an April 14 meeting that the timeline is uncertain.
Despite the setbacks, Hydrostor’s senior vice president, Curt Hildebrand, said the company is fully committed to the updated schedule and hopes for a decision before the end of the year. Still, Hydrostor’s legal team warned in an April 9 filing that more delays could derail their 2025 construction plans.
Federal Incentives at Risk
Another challenge that they might encounter is the impact of amendments to the Federal clean energy tax policies under the new Trump administration. The Biden-era DOE loan guarantee for Willow Rock is now under review by the current government. Additionally, a Republican-led Congress is debating whether to repeal or weaken clean energy tax credits.
Despite these risks, Hydrostor is actively informing lawmakers about the benefits of long-duration storage. Executive VP Scott Bolton emphasized the project’s role in grid reliability, clean tech innovation, and job creation.
Hydrostor first applied for the project permit in December 2021 and aimed to start full operations by 2028. Now, the company expects Willow Rock to go online in 2030.
So far, it has secured a 25-year contract with Central Coast Community Energy for 200 MW of capacity. They are still negotiating deals for the remaining output. To date, Hydrostor has raised $520 million from 18 investors. Its most recent $200 million round in February included backing from Goldman Sachs Alternatives, Canada Pension Plan Investment Board, and Canada Growth Fund Inc.
