Report on the Global Compressed Air Energy Storage (CAES) Market and its Alignment with Sustainable Development Goals

Executive Summary: Market Growth and SDG Alignment

• The global Compressed Air Energy Storage (CAES) market is projected to expand from an estimated USD 0.48 billion in 2025 to USD 1.88 billion by 2030, reflecting a compound annual growth rate (CAGR) of 31.4%.
• This growth is primarily driven by stringent environmental regulations and ambitious climate targets, positioning CAES as a critical technology for achieving SDG 13 (Climate Action) by reducing carbon emissions.
• As a clean, long-duration energy storage solution, CAES is instrumental in supporting the integration of renewable energy sources and ensuring grid stability, directly contributing to SDG 7 (Affordable and Clean Energy).
• The deployment of CAES technology represents a significant innovation in developing resilient and sustainable energy infrastructure, in alignment with SDG 9 (Industry, Innovation, and Infrastructure).

Market Segmentation Analysis and Contribution to Sustainability

Analysis by Technology Type

• The CAES market is segmented into adiabatic, diabatic, and isothermal technologies. The adiabatic segment accounted for the largest market share in 2024.
• Adiabatic CAES systems enhance sustainability by capturing and reusing the heat generated during air compression. This process improves round-trip efficiency and eliminates the reliance on fossil fuels for heating during the expansion phase.
• This zero-emission characteristic makes adiabatic CAES a key enabler of the clean energy transition, advancing the objectives of SDG 7 and SDG 13.

Analysis by Application

• The largest application for CAES in 2024 was renewable energy integration.
• CAES systems are vital for mitigating the intermittency of wind and solar power. They store excess energy generated during low-demand periods and release it during peak hours, reducing renewable energy curtailment.
• This function is fundamental to increasing the share of renewables in the global energy mix, a primary target of SDG 7. It also strengthens the resilience of energy infrastructure (SDG 9) and supports global climate mitigation strategies (SDG 13).

Regional Market Dynamics and Sustainable Development

Asia Pacific: The Leading Regional Market

• The Asia Pacific region held the largest share of the CAES market in 2024, driven by rapid renewable energy adoption and government commitments to decarbonization.
• Nations such as China, Japan, South Korea, and India are making substantial investments in long-duration storage to manage their expanding renewable energy portfolios.
• China is emerging as a global leader, with large-scale demonstration projects designed to support its goal of carbon neutrality by 2060.
• The region’s focus on CAES deployment underscores a strong commitment to achieving SDG 7, SDG 9, and SDG 13 through technological innovation and sustainable policy frameworks.

Profile of Key Market Players and their SDG Impact

• The market is led by key players including Hydrostor (Canada), APEX CAES (US), Storelectric LTD. (UK), Corre Energy (Netherlands), Siemens Energy (Germany), and Highview Power (UK).

Hydrostor (Canada)

• Hydrostor specializes in Advanced Compressed Air Energy Storage (A-CAES), providing long-duration, emission-free storage solutions.
• SDG Alignment:
  1. SDG 7 & 13: The company’s A-CAES technology delivers dispatchable, zero-emission power, directly supporting renewable energy integration and climate action goals.
  2. SDG 8 (Decent Work and Economic Growth) & SDG 9: The Silver City Energy Storage Project in Australia, a 200 MW facility, is contracted to provide 1,600 MWh of storage. This project will create 750 construction jobs and 70 permanent operational roles, contributing to local economic growth while building resilient, sustainable infrastructure.

Storelectric LTD. (UK)

• Storelectric LTD. develops grid-scale CAES and hybrid CAES/Hydrogen systems designed for long-duration storage.
• SDG Alignment:
  1. SDG 7 & 9: The company’s patented technology captures and reuses the heat of compression, enhancing efficiency and supporting the integration of both renewables and green hydrogen production. This contributes to the development of innovative and sustainable energy infrastructure.
  2. Strategic Advancement: Its 2023 acquisition of TES CAES Technology Ltd. enhances its capacity to deploy proven, long-duration storage solutions, thereby accelerating the global transition to clean energy in line with SDG 7.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 7: Affordable and Clean Energy – The article focuses on Compressed Air Energy Storage (CAES) as a technology to support and integrate renewable energy sources like wind and solar, making the energy supply cleaner and more reliable.
• SDG 9: Industry, Innovation, and Infrastructure – The text discusses the development and deployment of innovative CAES technology to modernize and improve the resilience and stability of energy grids, which is a critical component of infrastructure.
• SDG 13: Climate Action – The primary driver for the CAES market growth mentioned in the article is the global effort to combat climate change by cutting carbon emissions, meeting climate targets, and transitioning to clean energy.
• SDG 8: Decent Work and Economic Growth – The article highlights the economic aspects of the CAES market, including its significant market growth, investment, and the creation of jobs through large-scale projects.
• SDG 17: Partnerships for the Goals – The article mentions the importance of collaborations, such as public-private investments and agreements between companies and government bodies, to accelerate the deployment of CAES technology.

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 7: Affordable and Clean Energy

  • Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix. The article directly supports this target by describing CAES as a vital solution for “supporting renewable integration” and addressing the “intermittency challenges of wind and solar power,” which enables a higher share of renewables in the grid.
  • Target 7.a: By 2030, enhance international cooperation to facilitate access to clean energy research and technology… and promote investment in energy infrastructure and clean energy technology. The article highlights global market growth, international companies like Hydrostor (Canada) developing projects in Australia, and “rising investments in large-scale renewable projects” as key drivers, reflecting this target.

• SDG 9: Industry, Innovation, and Infrastructure

  • Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure… The article emphasizes that CAES technology is crucial for ensuring “grid stability,” “grid reliability,” and “strengthening grid resilience,” which are all aspects of developing high-quality energy infrastructure.
  • Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable… with… greater adoption of clean and environmentally sound technologies. The text presents CAES as a “clean,” “sustainable alternative to conventional peaker plants” and a “zero-emission storage technology,” directly aligning with the goal of upgrading infrastructure with clean technology.

• SDG 13: Climate Action

  • Target 13.2: Integrate climate change measures into national policies, strategies and planning. The article explicitly states that the CAES market is driven by governments implementing “stringent environmental regulations and setting ambitious climate targets to cut carbon emissions.” It also points to “favorable government policies” and China’s “carbon neutrality goals by 2060” as examples of this integration.

• SDG 8: Decent Work and Economic Growth

  • Target 8.2: Achieve higher levels of economic productivity through… technological upgrading and innovation. The entire article is about the growth of an innovative technology (CAES) that enhances the productivity and efficiency of the energy sector.
  • Target 8.5: By 2030, achieve full and productive employment and decent work for all… The article provides a concrete example with the Hydrostor project in New South Wales, which is projected to “create 750 construction-phase jobs and 70 ongoing operational roles.”

• SDG 17: Partnerships for the Goals

  • Target 17.17: Encourage and promote effective public, public-private and civil society partnerships… The article points to “public-private investments” in the Asia Pacific region and details a “Long-Term Energy Service Agreement” between the private company Hydrostor and AEMO Services, a body acting for the New South Wales government, as a key driver of project development.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• For SDG 7 (Affordable and Clean Energy):

  • Renewable energy storage capacity: The article mentions specific project capacities, such as the “200 MW” and “1,600 MWh (8 hours)” Hydrostor project, which can be used as an indicator of the growing capacity to integrate renewables.
  • Investment in clean energy technology: The projected market growth from “USD 0.48 billion in 2025 to USD 1.88 billion by 2030” serves as a direct financial indicator of investment in this clean energy technology.

• For SDG 9 (Industry, Innovation, and Infrastructure):

  • Adoption of sustainable technologies: The market share of different CAES types, such as the “adiabatic segment” accounting for the “largest market share,” indicates the adoption rate of more efficient and sustainable technologies.
  • Number of large-scale infrastructure projects: The mention of “large-scale CAES demonstration projects underway” in China and projects being advanced in “California and Australia” can be tracked as an indicator of infrastructure upgrades.

• For SDG 13 (Climate Action):

  • National climate targets and policies: The article refers to “ambitious climate targets,” “carbon neutrality goals by 2060” (China), and “favorable policy frameworks” as drivers. The existence and stringency of these policies are key indicators.
  • Reduction in fossil fuel dependence: The article states that India is prioritizing storage to “reduce dependence on fossil fuels,” which is a measurable outcome of climate action.

• For SDG 8 (Decent Work and Economic Growth):

  • Job creation in the green economy: The specific numbers of “750 construction-phase jobs and 70 ongoing operational roles” for a single project serve as a direct indicator of green job creation.
  • Economic value generated by green projects: The “USD 670 million in local economic benefits” from the Hydrostor project is a quantifiable indicator of economic growth.
  • Market growth rate: The Compound Annual Growth Rate (CAGR) of “31.4%” for the CAES market is an indicator of economic activity in a sustainable sector.

• For SDG 17 (Partnerships for the Goals):

  • Number and value of public-private partnerships: The agreement between Hydrostor and AEMO Services is a specific example. Tracking the number of such agreements is an indicator of partnership effectiveness.
  • Investment from diverse stakeholders: The mention of backing from “leading investors such as Goldman Sachs Asset Management, Canada Pension Plan Investment Board (CPPIB), and Canada Growth Fund” indicates multi-stakeholder financial partnerships.

4. Summary Table of SDGs, Targets, and Indicators

Source: prnewswire.com