Learnings

Outcomes

This narrative document sets out the main rationale for hydrogen storage development at scale in the UK:
1. To meet net zero, the UK will need considerable energy storage:
There will be significant periods of mismatch between renewable energy supply and energy demand, within-day, on cold winter weeks, and seasonally. And renewable energy constraint payments are forecast to rise to a peak of £1-2.5 billion a year in the mid-2020s. Energy storage at scale is therefore needed to maximise the energy recovery from the UK’s vast wind
and other variable renewable resources.
2. Hydrogen storage will be a major and essential part of this:
Of the main electricity storage options, batteries are short duration and not at sufficient scale, and there are limited new pumped hydro sites. Hydrogen production and storage can also offer a solution to electricity grid constraints, enabling more
renewable capacity installation, and maximising the usage of that capacity, with lower curtailment. The recent Long Duration Energy Storage report for BEIS concluded that longer duration storage solutions reduce net zero system costs by £13-24 billion a year, and that the largest savings arise from a combination of hydrogen storage and hydrogen CCGTs.
DNV’s modelling for this project found that, to ensure continued energy provision in the coldest periods with very low wind generation (such as in early December 2022), hydrogen storage will range from 29-65 TWh – equivalent to 20-45 new salt cavern facilities with each facility comprising multiple individual caverns.
Not surprisingly, scenarios with hydrogen heating require more hydrogen storage. But the electrified heating scenarios would require more electricity generation, storage and transmission infrastructure, which are not quantified here. These investments can be very large indeed. DNV recently carried out a study for Eurogas, looking at Europe as a whole, and found that in an electrification scenario, electricity transmission and distribution infrastructure investment would need to be €106 billion a year,
compared with €63 billion a year in a balanced electricity and decarbonised gas scenario. A balanced scenario would therefore save €41 billion a year on power grids, with only an additional €2 billion a year needed for gas transmission and distribution infrastructure.
3. Physical hydrogen storage is needed in the UK:
As for natural gas, a level of indigenous hydrogen production and storage is needed to support energy security, particularly in times of turbulent geopolitics, as Europe is experiencing today.
The UK is obliged, as a member of the International Energy Agency, to maintain oil storage equal to 90 days of net imports of the previous year. Under EU rules, members states must maintain oil stocks equivalent to at least 90 days of average daily net imports or 61 days of average daily inland consumption, whichever is greater. When oil use is phased out, hydrogen storage will be needed to support emergency energy stocks.
Hydrogen pipelines are likely to be built across the North Sea, but they will only be a partial solution. The region will need hydrogen at scale at the same time, and wind generation can follow a similar pattern across the region in cold winter weeks.
Unlike electricity, hydrogen can be transported across oceans, and so it has the potential to become a globally traded fuel, benefitting from production in regions with very cheap renewables. But, as with LNG, it will take some time for the physical infrastructure to be developed, and net zero cannot wait.
4. Only geological hydrogen storage can deliver at the scale needed, within the timescales for net zero:
The only hydrogen storage options at TWh scale are geological, and these options also are far less energy-intensive than compressed or liquified hydrogen storage above ground, or conversion from a hydrogen carrier such as ammonia or LOHC.
Refinery operators have shown for many years that salt caverns can store industrial grade hydrogen safely, respond quickly to meet within day demand fluctuations and provide long term storage – this makes salt cavern storage a flexible and technologically ready solution capable of managing multiple customer requirements.
Depleted hydrocarbon fields could offer much larger storage volumes than salt caverns and would be more suited to seasonal demands for hydrogen or for security of supply in high-demand periods.
5. Geological hydrogen storage should be supported through a viable business model now, to ensure it comes online in the 2030s:
It can take up to a decade for new geological storage to be developed, meaning that numerous salt caverns will need to be developed in parallel, and that work needs to start now so that the required capacity can come online in the 2030s, as hydrogen production and demand is scaled.
In the Netherlands, Gasunie is already developing four salt caverns for hydrogen storage, with the first cavern planned to be open in 2026 and the other three by 2030. The capacity of the first cavern is around 200 GWh – a thousand times higher than the UK’s largest battery storage installation. DNV has previously reported that geological hydrogen storage has the lowest levelized cost compared with high pressure or very low temperature storage options.
Hydrogen storage should be stimulated through a viable business model, such as a Regulatory Asset Base (RAB), which is used for electricity and gas network and other infrastructure investment in the UK and elsewhere. A regulatory model using a Regulatory Asset Base (RAB) would allow investors to recover the reasonable and efficient costs of their investment (including a reasonable return on investment), whilst ensuring costs to end-users are minimal (reflecting efficient costs), thus supporting
the economic viability of hydrogen storage regardless of the heat decarbonisation pathway.

Lessons Learnt

• Key to the delivery of the project was effective stakeholder engagement with individuals and organisations with interest in the storage of hydrogen.
• Initial data gathering and scenario setting is critical to ensure the outcomes developed are credible.
• The timescales for delivery changed during the execution of the study, primarily due to the extended detail required in the scenarios used.