Europe has a network of natural gas storage facilities that enables it to manage the seasonality of demand and to provide a cushion against supply shocks such as the recent Russian import disruption.

It must develop a similar network for hydrogen, and quickly. This is because imports are expected to account for at least half of the continent’s hydrogen supply. The potential level of hydrogen demand seasonality remains unclear as its role in heating is still under discussion, but it could be significant. And fluctuations in domestic green hydrogen supply, as producers trade the arbitrage between hydrogen and renewable power prices, will certainly need to be managed with flexible storage.

Germany’s plans to convert gas-fired power plants to hydrogen present another need for hydrogen storage.

Progress on large-scale hydrogen storage in Europe up to now has been minimal, partly because the industry must tackle technical challenges including potential embrittlement of steel. Also, hydrogen has a lower volumetric energy density than natural gas and higher risk of leakage.

250–600GWh – Uniper’s capacity target

However, firmer plans for large-scale projects have emerged in recent weeks. German energy company Uniper recently unveiled plans to develop salt caverns for the large-volume storage of hydrogen in north-west Germany. It envisages an initial capacity of 250–600GWh, which should be available to the market before the end of 2030.

The company has more than 80TWh of underground gas storage capacity in Germany, Austria and the UK, making it one of Europe’s largest storage operators.

“As part of the hydrogen ramp up, we want to repurpose some of our storage capacities and build new storage facilities,” said Doug Waters, managing director of Uniper Energy Storage. “This will enable us to store renewable energy in the form of hydrogen for industries that are difficult to electrify and potentially later on for long duration energy storage, allowing for better management of volatile renewable energies."

Stable and reliable supply of hydrogen to the market, with fluctuating production from 2030, will only be possible through the construction and operation of large-volume hydrogen storage facilities, he added.

In order to forecast the demand for the hydrogen storage more accurately, Uniper has been consulting with the market in recent weeks.

Open season

Last year, Dutch infrastructure firm Gasunie drew significant interest from the market when it launched an open season process for large-scale storage capacity at a salt cavern in Groningen in the Netherlands. Demand far outstripped the offered storage capacity of 216GWh.

Gasunie is also ramping-up plans to develop storage capacity in Germany. It has signed lease agreements with infrastructure salt cavern operator Storage Etzel for the development of a multi-cavity storage facility with capacity of more than 1TWh in the German state of in Lower Saxony.

The two companies are already involved in a pilot project based on the conversion of two caverns into hydrogen storage caverns, the construction of an above-ground facility and a test and research phase which is due to be completed by the end of 2026.

As with the rest of the hydrogen supply chain, storage capacity will only be developed at scale with state support. Policymakers are playing catch up on subsidies and business models for storage. Uniper favours a system of subsidies based on contracts for difference.

"Investments in the development of hydrogen storage facilities require a regulatory and funding framework in order to achieve workable business models," said Uniper COO, Holger Kreetz.

---

Author: Stuart Penson