A Canadian underwater energy storage company, Hydrostor, is hoping for $1 billion in contracts to replace peak power plants in the United States as they’re retired over the next two or three years.

“Hydrostor and its engineering partner AECOM are targeting dozens of mostly coal-powered facilities of at least 100 megawatt capacity across the U.S. that either shut down in 2016 or will shut this year,” the Globe and Mail reports. The so-called “peakers”, which are only turned on when electricity demand is at its highest, “are a critical but expensive element of the electricity grid.”

To build a more affordable alternative, Hydrostor “buys off-peak electricity to compress air it stores underwater in balloon-type accumulators,” the paper explains. “It then reverses the process to generate power and feed it back into the grid when demand is high.”

“We are now by far the lowest-cost storage solution, we can be built at scale, we’ve got our partnerships in place, and we’re going to start marketing it here in the next month or two,” said CEO Curtis VanWalleghem.

Hydrostor’s main competitors are battery storage and efficient, inexpensive natural gas generation, the Globe notes. “Most of the utilities in the U.S. that are starting to get their feet wet with storage are typically going with these battery plays, mostly because they’re a little more flexible,” said utility advisor Craig Sabine at Navigant. VanWalleghem responds that Hydrostor offers capital costs of $1,000 to $2,000 per kilowatt—lower than $3,500 or more for batteries, and comparable to gas-fired generation, with lower operating and maintenance costs. (h/t to Clean Energy Review for first pointing us to this story)