Electrolysis splits water into hydrogen and oxygen using an electric current. The total energy required for the reaction can be supplied as a mix of heat and electricity, and total energy demand falls as more of it is supplied as heat. Storelectric's patented process channels the heat generated during air compression in its CAES cycle directly into the electrolysis process, raising the temperature of the water or steam feed and reducing the share of energy that must come from electricity.

Electrolysers also run less efficiently and degrade faster when powered intermittently, often needing two to six times more electrolyser capacity to match the output of a steadily powered system. Integrating CAES delivers near-baseload power to electrolysers rather than exposing them directly to intermittent renewable input, so fewer electrolysers are needed for the same output, and the heat-recovery patent further lowers the cost per kilogram of hydrogen produced.

The resulting hydrogen is stored in adjacent salt caverns at GWh to TWh scale, giving a single integrated site for production and storage.