Hagag Europe and Airengy are tackling one of renewable energy’s toughest problems and that is how to store electricity for days, not just hours. They’ve signed a strategic agreement to build a Compressed Air Power Plant in Romania’s natural salt caverns, using Airengy’s proprietary AirBattery technology for long-duration energy storage.
This isn’t another ordinary lithium-ion battery project as this new facility aims to reach 25 MW discharge capacity with up to 5 GWh storage capacity, developed across two phases.
Phase A kicks off with 200 MWh storage at €4.5 million construction cost, expected to operate within 12-18 months. Phase B scales it up to the full 5 GWh capacity at an estimated €50 million, with dedicated project financing lined up.
What makes AirBattery different is the physics. During charging, excess electricity compresses air into underground salt caverns that offer enormous storage volumes, natural airtightness, and exceptionally low costs. During discharge, that compressed air releases into a hydraulic system, applying pressure on water that routes through a turbine to generate grid electricity.
The entire process uses only water and air and no polluting materials, no rare metals, and equipment that can operate for decades with minimal maintenance.
Under this partnership, Hagag Europe secures usage rights for the salt caverns while Airengy handles planning, design, construction, and operation. The special purpose company splits shares 40-40-20 between Hagag Europe, Airengy, and a third party.
For Romania’s electricity market, which already sees massive solar entry combined with lithium-ion storage from Israeli companies like Nofar and Econergy, this project could transform the sector.
Long-duration storage means facilities can charge renewable energy at low prices, benefit from availability payments, and sell electricity in day-ahead and intraday markets. The system can also provide fast grid-balancing services when integrated with lithium-ion batteries.
This fits Hagag Europe’s broader strategy in Romania, where they’re developing dozens of natural gas infrastructure transmission projects while expanding into the country’s rapidly growing energy market.
The transaction was led by Hagag Europe CEO Arik Derekh and Deputy CEO Roy Brilant, alongside Airengy CEO Tal Raz.
The strategic need for long-duration storage is gaining recognition across Europe. Airengy already signed memoranda for cooperation in the UK with Kistos and in Germany with SEFE, the state-owned gas giant.
Romania’s salt caverns offer a proven path to compressed air power plants at hundreds of megawatts scale with multi-day storage capacity addressing the central challenge of reliable electricity supply from renewable sources.
Leadership Comments
Tzachi Hagag, Controlling Shareholder and Chairman of Hagag Europe, said: “This is a major development for the rapidly evolving Romanian energy market and represents a significant business leap that positions Hagag Europe at the forefront of global innovation in energy storage and clean power generation. The partnership with Airengy is a key pillar in our strategic plan to expand the company’s energy activities. We have identified a growing need for stable, long-duration storage solutions that will support Romania’s energy independence, address geopolitical and security needs, and facilitate the transition to renewable energy.
“The use of natural geological formations such as salt caverns provides a substantial economic and operational advantage over existing storage solutions.”
Yiftah Ron-Tal, Chairman of Airengy, said: “This is one of the most significant moments in the company’s history. For over a decade, Airengy has invested substantial resources in developing AirBattery technology, based on the conviction that the world will need long-duration storage solutions beyond current technologies. The agreement with Hagag Europe marks our transition from the development and proof-of-concept stage to commercialization and the initiation of commercial-scale power plants based on our technology. Beyond the business potential in Romania, this move proves that AirBattery technology can serve as the foundation for additional projects across Europe and other global markets.”
