A disused Australian cavern will be transformed into one of the world’s largest compressed air energy storage facilities, using excess green energy to power the frontier mining city of Broken Hill.

Canadian energy storage developer Hydrostor announced that it has struck a deal to use its Advanced Compressed Air Energy Storage (A-CAES) system in an old site owned by Australian miner Perilya.

The Silver City Energy Storage Project will be able to provide 200MW of energy for eight hours or more to Broken Hill, a city in remote New South Wales, says Hydrostor.

Toronto-based Hydrostor’s technology uses off-peak or surplus energy to produce heated compressed air.

The heat is extracted from the air stream and stored inside a thermal store, saving the energy for use later in the cycle. The compressed air is pumped into a purpose-built cavern part-filled with water, pushing the water to the surface of a closed-loop reservoir.

When energy is needed, the water is allowed to rush back down the shaft. This forces the air to the surface, where it is recombined with the stored heat and expanded through a turbine to generate electricity on demand.

Hydrostor says Silver City will eliminate the need for “expensive” and “unsightly” new transmission lines around Broken City, as well as cutting the reliance on “highly polluting diesel generators” currently being used to provide backup energy in the area.

It will also “solve significant congestion issues” being experienced by existing renewable projects in the region, it says.

Hydrostor says it will benefit from several “unique features” of the mine. These include “hard and impermeable metamorphic rock,” existing underground development allowing it to build the storage facility at an “optimal depth” of 600 metres, and existing mine support infrastructure.

Last year, the Australian government approved A$45m ($28.7m) in funding for the $652m project, conditional on it reaching financial close. It said Silver City would be one of the world’s largest compressed air projects once completed.

The project will be the company’s first in Australia, although it has several in the US and Canada.

Hydrostor claims its A-CAES system is different from others of its ilk as it uses purpose-built caverns to store compressed air, rather than the underground salt caverns needed for other CAES systems that consequently face restrictions on where they can be deployed.

Last year, US finance behemoth Goldman Sachs threw its weight behind Hydrostor, providing $250m in backing. Hydrostor CEO Curtis VanWalleghem told Recharge at that time that the company’s technology could be used among other things to support offshore wind farms with power surpluses.