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As Alberta’s electricity system continues to evolve, the need for reliable, flexible energy storage is becoming increasingly important. The growth of renewable generation, rising electricity demand and the modernization of the province’s power market are creating new opportunities for technologies that can store energy when it is abundant, and deliver it when it is needed. One project aiming to address that challenge is the Marguerite Lake Compressed Air Energy Storage (CAES) Project, currently under development in northeastern Alberta. Developed by Cache Power Corp., the project is designed as a long-duration energy storage facility that will support grid reliability while helping 3
integrate renewable energy into Alberta’s electricity system. The project is planned in two phases, with the first phase providing 320 MW of generation capacity and 15,360 MWh of storage, and then ultimately expanding to 640 MW and 30,720 MWh of storage. The idea for the project emerged from an unique combination of infrastructure and geology. As Jordan Costley, Director Federation Group Inc. & President Cache Power Corp, explains, “I drove by the Marguerite Lake substation for over a decade while working with SAGD operators in the region. It was a massive piece of electrical infrastructure that seemed increasingly underutilized, and I always thought it would be a great site for power generation. The lightbulb moment came when we realized it sat directly above one of the thickest and most suitable sections of the Lotsberg Salt formation.” That combination became the foundation of the project; the existing Marguerite Lake substation provides direct access to Alberta’s transmission network, while the underlying salt formation offers the geological conditions required for large-scale compressed air storage caverns. Together, they create an opportunity to develop a long-duration energy storage facility capable of serving Alberta’s future electricity needs. LEVERAGING EXISTING ADVANTAGES Location plays a central role in the project’s economics and technical feasibility. The site sits 4
directly above the Lotsberg Salt formation, which provides an ideal geological setting for compressed air storage. Alberta’s extensive experience with salt cavern development also reduces technical uncertainty. “Alberta has decades of experience developing and operating salt caverns (since the 1950s), and the geology at Marguerite Lake is well suited for long-term storage applications,” says Costley. The proximity to existing transmission infrastructure offers another significant advantage. By locating the project adjacent to the Marguerite Lake substation, developers can use existing grid infrastructure rather than constructing entirely new transmission assets. A DIFFERENT APPROACH TO ENERGY STORAGE Compressed air energy storage operates differently from more familiar battery technologies. The process uses surplus electricity to compress air and store it underground in large salt caverns, and, when electricity demand increases, the compressed air is released, heated and expanded through turbines to generate power. One of the technology’s primary advantages is duration. While batteries are well suited for shorterduration applications, CAES can provide energy over much longer periods and can be expanded by developing additional underground caverns. Powering Alberta’s Energy Storage Future Powering a new era of energy storage, Hitachi Energy is providing grid connection solutions for the Marguerite Lake CAES project, strengthening Alberta’s grid reliability and advancing sustainability. Discover how hitachienergy.com/substations/margueritelakecaes 5
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Compared with pumped hydro storage, it requires a much smaller surface footprint while making use of Alberta’s existing geological resources. For Alberta’s power system, this flexibility could become increasingly valuable. The project is designed to absorb excess electricity during periods of strong renewable generation and then release that energy when demand rises. STRENGTHENING RELIABILITY The first phase of the Marguerite Lake project will provide more than 48 hours of storage, a capability that could have a meaningful impact on Alberta’s electricity system. “A project of this scale can provide a significant source of flexible and dispatchable capacity to Alberta’s electricity system,” says Costley. “By storing energy during periods of surplus generation and delivering it during periods of peak demand, the facility helps balance supply and demand while improving overall system reliability.” The duration of the storage is particularly important during periods of extreme weather or reduced renewable generation. Extended cold spells, low wind conditions or limited solar production can place pressure on electricity systems. Long-duration storage offers an additional resource that can respond during these situations. 7
The facility could also reduce reliance on less efficient peaking generation while complementing existing generation resources. As Alberta continues adding renewable energy capacity, technologies capable of balancing intermittent generation are expected to become increasingly important. BUILDING A PLATFORM FOR THE FUTURE While the project’s immediate focus is compressed air energy storage, the site has also been designed with future hydrogen opportunities in mind. “Hydrogen is part of the project’s long-term vision to further reduce emissions and support Alberta’s broader energy transition,” Costley says. The project area contains multiple salt formations, including the Prairie Evaporite formation, which has been identified as a potential hydrogen storage resource. In addition, the Siemens Energy equipment selected for the project can already operate with hydrogen blending and offers a pathway toward full hydrogen operation in the future. The company has also partnered with Babcock & Wilcox to evaluate integration of its BrightLoop technology, which could support lower-emission hydrogen production. Looking further ahead, the combination of hydrogen production, underground storage and Alberta’s geology may create opportunities for future carbon storage initiatives. “What makes the site unique is that it gives us options and flexibility,” says Costley. “We can start with long-duration energy storage, but the infrastructure and geology also create opportunities to evaluate hydrogen production, storage, and, as 8
those markets develop, potential carbon capture and storage solutions.” COLLABORATION AND DEVELOPMENT Developing a first-of-its-kind project requires extensive coordination across technical, regulatory and commercial disciplines. As of June, 2026, the project has secured key regulatory approvals, Indigenous engagement approval, environmental assessment waivers and a subsurface reservoir lease for compressed air, natural gas and hydrogen storage. Significant engineering work has also been completed, including cavern design, thermodynamic evaluations, geomechanical analysis and geotechnical assessments. According to the company, one of the most important lessons learned has been the need to advance technical, regulatory and stakeholder engagement activities simultaneously. “No single organization can deliver a project like this on its own, and the progress we have made to date reflects the strength of those partnerships and the shared commitment to advancing the project,” says Costley. That collaborative approach extends to relationships with Cold Lake First Nations, EllisDon, Siemens Energy, Hitachi Energy, Babcock & Wilcox and a broad network of engineering, advisory and regulatory partners. LOOKING AHEAD The next milestones for the Marguerite Lake CAES Project include completing detailed engineering work, advancing subsurface development and solution mining activities, securing a Final Investment Decision 9
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and moving toward procurement and construction. For Cache Power Corp., success extends beyond delivering a single facility. The broader objective is to demonstrate that long-duration energy storage can operate successfully at commercial scale in Alberta while supporting reliability, renewable integration and Indigenous economic participation. “We believe projects like Marguerite Lake can become an important part of Alberta’s future energy mix by providing the long-duration storage needed to support a reliable and affordable electricity system while helping accommodate both renewable growth and increasing electricity demand across the province.” If realized as planned, the Marguerite Lake project would not only introduce a new form of large-scale energy storage to Alberta’s electricity system but could also establish a platform for future hydrogen and energy storage developments. In doing so, it would demonstrate how existing infrastructure, geological resources and emerging technologies can work together to address the changing needs of a modern electricity grid. For more information, please contact the Cache team at info@cachepower.ca 11
As seen in BusinessEliteCanada.com
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