Israeli real estate development and energy infrastructure company Hagag Europe signed a strategic agreement with Airengy, another Israeli energy company listed on the Tel Aviv Stock Exchange, to develop an electricity storage project in Romania using salt caverns.
The project will use Romania’s natural salt caverns to store compressed air. The compressed air is injected and stored in underground salt caverns, which offer very large storage volumes, natural airtightness, and low operating costs. When the energy system requires electricity, the air is released and used to power a hydraulic system that drives electricity-generating turbines.
The concept falls within the category of Long Duration Energy Storage (LDES) solutions, which are considered essential for energy systems increasingly reliant on renewable energy sources. The technology is designed as a long-duration energy storage solution capable of delivering electricity for several days, unlike conventional lithium-ion batteries, which typically provide only a few hours of storage. The process uses only air and water, without rare metals or polluting materials, and the company claims that the facilities can operate for decades with low maintenance costs, according to a press release.
The total estimated investment for the project amounts to EUR 55 million. The facility is expected to reach a storage capacity of up to 5 GWh and a discharge capacity of approximately 25 MW.
In the first phase, the developers will build a facility with a storage capacity of approximately 200 MWh, with the investment estimated at EUR 4.5 million. The companies estimate that this phase will become operational within 12–18 months from the start of construction.
The second phase involves expanding the project to a discharge capacity of approximately 25 MW and a total storage capacity of around 5 GWh (5,000 MWh), with the additional investment estimated at approximately EUR 50 million. For this phase, the partners intend to secure project-specific financing.
Under the agreement, Hagag Europe will provide the rights to use the salt caverns, while Airengy will be responsible for the design, construction, and operation of the storage technology.
Romania is experiencing a wave of investment in photovoltaic parks and energy storage batteries, given its high energy prices and lack of storage.
Airengy representatives argued that storage in salt caverns can offer significant economic and operational advantages over solutions based solely on lithium-ion batteries because it allows energy to be stored for periods of days or even weeks.
According to the company, the facility will be able to purchase renewable energy when prices are low, benefit from capacity remuneration mechanisms, and sell electricity on day-ahead and intraday markets. In addition, the project could provide rapid grid-balancing services through the integration of lithium-ion batteries.
“This is a major step for Romania’s energy market, which is undergoing accelerated transformation, and it represents a significant leap that positions Hagag Europe at the forefront of global innovation in energy storage and clean energy production,” said Tzachi Hagag, majority shareholder and chairman of Hagag Europe.
He added that the company sees a growing need for long-term storage solutions that support Romania’s energy independence and the integration of renewable energy sources.
If the Romanian project is implemented according to plan, it could become one of the first large-scale commercial applications of AirBattery technology and an important test for the future of salt-cavern energy storage solutions in Europe.
(Photo source: Airengy LTD on LinkedIn)
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