“How, exactly does it work? Compressed air, pressurized to match the lake bottom’s water pressure is pumped into the heavy-duty underwater balloons through the pipes, where it’s stored until electricity is needed. At that time, the system reverses itself and the water’s weight pushes the air back through the pipes, where it’s converted back into electricity.
The current Toronto pilot project is just 1 megawatt, but Hydrostor plans to offer up to 100 MW options. The cost of the energy from a 10 MW system like this would be about $250 per kilowatt hour, which is significantly cheaper than current, on-land compressed air storage.
The reason the company can produce the systems so cheaply lies in their use of simple, off-the-shelf technologies that defer the need for a complex manufacturing process. Add to that its drilling techniques that reduce the demand for boats and cranes, and you’ve got a cost-effective system. According to Greentech Media, the systems will come with a 10-year warranty that could be expanded to 20 years after the pilot is completed.” said inhabitat.com