A proposed compressed-air energy storage (CAES) scheme in Romania is being developed by Hagag Europe and Airengy. The project is designed to use underground salt-cavern formations as natural reservoirs for storing compressed air. Electricity produced during low-price periods would be used to compress air and store it underground under high pressure. When prices rise or system demand increases, the stored air would be released to generate electricity.
The first development phase is expected to deliver about 200 MWh of storage capacity, with an estimated investment of €4.5 million. A second phase would target around 25 MW of discharge capacity and approximately 5 GWh of total storage. The investment estimate for the second phase is roughly €55 million.
Role compared with lithium-ion batteries
The CAES project is positioned for a different market segment than lithium-ion batteries. In the region, many storage investments have focused on capturing short-term intraday price movements. Lithium-ion systems are described as suited to frequency regulation, fast-response balancing services and daily energy arbitrage. Compressed-air storage is intended to address longer-duration needs tied to multi-day price spreads and extended periods of system stress.
The long-duration profile referenced for compressed-air storage includes value capture during prolonged renewable shortfalls and periods associated with emerging capacity-related products. This is contrasted with battery revenue opportunities linked to shorter timeframes. As renewable penetration increases across south-east Europe, the distinct revenue characteristics of long-duration storage are expected to matter for market participation.
Flexibility needs as solar and wind expand
Romania’s need for additional flexibility is described as increasing alongside new renewable projects entering the market. Solar and wind deployment are expanding rapidly, while grid upgrades and storage investments have not always kept pace. The resulting conditions include higher price volatility, transmission bottlenecks and times when renewable generation exceeds immediate demand. Long-duration compressed-air storage is described as intended to shift energy across multiple days rather than only a few hours.
The source description links this multi-day shifting capability to scenarios such as extended low-wind periods, cloudy conditions and episodes of surplus renewable production. These operational windows are presented as areas where longer-duration storage could support system balancing. The project’s design is therefore aligned with flexibility requirements that extend beyond intraday cycles.
Project structure and financing considerations
The project is described as having an industrial and geological basis through access to suitable salt-cavern resources in Romania. The country’s salt-cavern resources are cited alongside a large renewable development pipeline in the region and an electricity market able to support storage business models. Under the proposed structure, Hagag Europe would provide access to cavern infrastructure. Airengy would supply the storage technology, engineering expertise and operational framework needed to commercialise the asset.
The main challenge highlighted is bankability and market design for long-duration assets. Such projects require stable and predictable revenue streams, including routes such as energy arbitrage, balancing services, capacity remuneration mechanisms or contracted flexibility products. Without regulatory frameworks that reward storage duration adequately, financing may be difficult despite system benefits.
