Dutch energy storage company Corre Energy and Eneco have agreed to co-develop and co-invest in a compressed air energy storage (CAES) project in Germany with 320MW of power-generating capacity.
The partnership will result in Eneco acquiring a 50% stake in the project. Financial terms for the project, including both development capital and construction equity, are yet to be finalised.
CAES is a long-duration energy storage system in which surplus amounts of sustainable electricity can be used to compress air with a capacity of 220MW.
The compressed air will be stored in salt caverns – cavities in the ground 1km below the surface.
When there is electricity demand, the compressed air can be released to a turbine to generate 320MW.
The deal aligns with Corre Energy's co-investment strategy and secures Eneco the entire storage capacity through a long-term offtake agreement for the project's initial phase.
The Ahaus project marks Eneco's second collaboration with Corre Energy following a 15-year offtake agreement for the ZW1 project in the Netherlands, which was announced in December 2022.
LichtBlick, Eneco's German subsidiary and a green energy supplier, will co-develop, finance and operate the Ahaus project with Corre Energy Germany.
The agreement significantly reduces the risks for Corre Energy in achieving a commercial close and final investment decision.
The CAES facility in Ahaus, situated in North Rhine-Westphalia, is strategically located between growing offshore wind power production in the north and major power consumption areas in the south.
The first phase of the Ahaus project will utilise two of the site's four existing salt caverns to implement Corre Energy's multiday CAES technology.
The first cavern is scheduled for handover to Corre Energy in early 2027, with construction of all four caverns already in progress.
Chemical company Solvay is currently extracting salt from the caverns.
The project's development is less risky due to existing construction permits for the caverns.
Siemens Energy will supply equipment for the project following a global partnership initiated with Corre Energy in November 2023.
Corre Energy secured the Ahaus site through an agreement with Solvay, a global chemical company, in June 2023.
Ahaus is close to the country's future national hydrogen backbone grid, H2-Startnetz, and will support the development of a regional, industrial-scale, renewable green hydrogen value chain.
The project is the first CAES facility to be developed, constructed and operated in Germany since the Huntorf plant in 1978.
Corre Energy CEO Keith McGrane stated: “This landmark agreement combines offtake, development and co-investment arrangements to propel our first German project while showcasing the latest demand for our CAES solution.
“It comes just six months after securing the site in Germany and underscores the ongoing success of our growth strategy. To sign a second deal with Eneco just 12 months on from our first agreement in the Netherlands is a testament to the relationship we have forged.
“By locking in long-term investment partnerships such as in Germany, we are accelerating the commercial development of our portfolio, underpinned by long-term offtake arrangements.
“These arrangements are repeatable across the portfolio and for each project can capture around €1bn [$1.09bn] of net revenue over the duration of a 15-year offtake agreement.”
