Hagag Europe and Airengy have signed a strategic cooperation agreement to develop a compressed-air energy storage project in Romania that will ultimately provide up to 5GWh of storage capacity using underground salt caverns.
The project will use Airengy’s AirBattery technology and is planned in two phases, with a total investment of around €55 million. Once completed, the installation is expected to deliver approximately 25MW of discharge capacity and provide long-duration energy storage over periods measured in days rather than hours.
The scheme will be developed through a special purpose company owned equally by Hagag Europe and Airengy, with a third partner holding a 20% stake.
Phase A involves construction of a 200MWh facility at an estimated cost of €4.5 million, with commissioning expected within 12–18 months from the start of construction.
Phase B would expand the project to around 5,000MWh (5GWh) and raise average discharge capacity to approximately 25MW. The second phase is expected to cost around €50 million and will be financed separately.
Compressed-air stored in naturally sealed salt caverns
The system stores compressed-air in naturally sealed salt caverns. During charging, surplus electricity is used to compress air and inject it underground. During discharge, the compressed-air is released into a hydraulic system where its expansion drives water through a turbine to generate electricity. Airengy said the process uses only air and water and is intended to provide long-duration storage over periods of days or weeks.
The developers said the facility could also provide fast grid-balancing services through integration with lithium-ion batteries.
The project forms part of Hagag Europe’s wider expansion into the Romanian energy sector, where growing renewable generation and increasing cross-border electricity trading are creating demand for longer-duration storage technologies.
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.”
Airengy, formerly known as Augwind, has been developing the AirBattery system for more than a decade. In 2025, the company signed memoranda of understanding with UK producer Kistos and Germany’s state-owned energy company SEFE to explore further applications of the technology in Europe.
