Joint media release with Minister for Trade, Tourism and Investment, Deputy Leader of the Government in the Senate and Senator for South Australia Senator The Hon. Simon Birmingham

The Liberal-National Government is backing Australia's first compressed air energy storage project, in what is a major win for South Australia and the state's energy grid.

Hydrostor has been awarded $6 million from the Commonwealth Government through the Australian Renewable Energy Agency (ARENA) and $3 million from the South Australian Government to build the $33.3 million project.

This first of its kind project in Australia will see Hydrostor Inc. re-purpose the Angas Zinc Mine in Strathalbyn, and construct a 5 MW / 10 MWh fuel-free Advanced Compressed Air Energy Storage (A-CAES) project.

Minister for Energy Angus Taylor said the Liberal-National Government was pleased to support this project in South Australia that will repurpose a brownfield mine site and support reliable 24/7 power.

"Hydrostor's A-CAES project is a welcome addition to Australia's rapidly expanding renewable generation and storage technologies," Minister Taylor said.

"Our Government, through ARENA, is supporting the reliable integration of renewable energy through energy storage projects like this."

Minister for Trade, Tourism and Investment Simon Birmingham said the project could be a game-changer for energy storage technology in SA.

"We'll continue to back companies that invest in innovative emission-free storage solutions that develop a stronger and more reliable electricity supply," Minister Birmingham said.

"This is a major win for the state's energy grid and will also have significant flow-on effects for local businesses and create more jobs in the region."

Utilising the mine site, which is currently in care and maintenance, will help to increase renewable energy supply to the South Australian and national energy grid.

As a fuel-free storage technology, A-CAES has similar applications to pumped hydro. Importantly, it can provide the dispatchability required to ensure reliability of the energy system as more solar and wind power is installed.

The $25 billion pipeline of investment in variable renewable energy in Australia over the three years to 2020 requires additional investment in energy storage to deliver reliable 24/7 power.