How does the economics of this look like, and how do they intended to get back the investment. If its to buy low when wind/solar production is high and sell when production is low, what will the cost per watt be? If its subsidies, how much will this cost the government?
The article seem to mostly describe this as a technology project to test the technology at scale, but they do also mention profits. Is the basic premise of buy low sell high, exclusively on renewables, enough to offset the cost from energy conversion, building, staff and other costs, and if so, by what degree compared to other method to produce energy? When is it estimated to have paid its initial investment?
Energy storage if you want to rely solely on renewable energy sources is THE KEY to making that even remotely feasible.
Current solar and wind renewables are NOT predictable nor reliable for sustained power generation. With Coal, Natural Gas, Nuclear and Hydro you can generate power on demand, no matter what the environment is doing. Well, Hydro in the west is getting dicey with the drought - but even that is far more stable than wind/sun which can vary wildly week to week, day to day or even hour to hour.
That's why technology like this is so exciting. If you can look at the average production of a renewable over a month, then within a year the peak month, then look at the worst months, then have enough storage to cover a percentage of a peak month based off the hedge of the worst month then you are getting to a point where a solar farm isn't just an opportunistic source of power based on how much the sun is shining, but a reliable energy source that can be counted on whether the sun is shining or not.
Same for wind farms.
Energy storage is crucial if we seriously want to transition to renewables and hence the investment from Goldman Sachs.
If this company is even remotely successful in actually delivering then $250M is a pittance to what they will receive back in the long term.
There are also a lot of unused/abandoned underground structures - from various wells that are now dry of the resource they were originally drilled for to mines that are no longer productive. The problem has been sealing them from seepage so you don't loose your stored air - this article was light on details but that seems to be this companies claim to fame. They seem to have found economical ways to deal with those issues - enough to convince the boffins at Goldman Sachs they are worthy of investment. I guarantee you Goldman is not just tossing out money willy-nilley without performing some significant due diligence!
The question is still economics. At minimum the cost per watt/h need to be cheaper than to build a nuclear plant and have it run when demand exceed supply from renewables. Is this true for compressed air?
When people discuss green hydro as a storage solution the numbers so far, from what I have managed to interpret, is around 3-5 times that off nuclear for the same amount of energy delivered. It is still technically possible to make a profit given enough subsidies and time, and it get much more economically if the hydrogen can be used directly in the production chain like steel and fertilizer. Right now there are a steel foundry in Sweden testing the technology and economics doing that, through I don't know how much subsidies and tax reductions were involved.
Which all means the question about economics remains. There are many alternatives to fossil fuels but the primary question everyone debates is the issue of price. Without a price per watt/h or a time frame for when the investment get repaid its impossible to separate the practical from impractical, and the subsidy question is very relevant when discussing this on a national level.
The article seem to mostly describe this as a technology project to test the technology at scale, but they do also mention profits. Is the basic premise of buy low sell high, exclusively on renewables, enough to offset the cost from energy conversion, building, staff and other costs, and if so, by what degree compared to other method to produce energy? When is it estimated to have paid its initial investment?