Article I Hydrogen storage: the energy transition’s catalyst

(Source: Hydrogen Europe Quarterly/ © Justin Jin for Hydrogen Europe)

An enormous part of the hydrogen infrastructure tapestry is storage. In salt caverns, depleted gas fields, and more there is an opportunity to store the molecule long-term and dispatch it as needed through pipelines. The Hydrogen Europe Quarterly speaks to Boris Richter, managing director at Storag Etzel, and Charlotte Roule, director general of Storengy, about the challenging but rewarding task of building up this capacity.

As Europe targets carbon neutrality by 2050, member states are working hard to electrify and decarbonise its economies in the relatively short time left. 25 years to complete a fundamental and radical transformation of our societies towards the principles of circularity and sustainability. Such an undertaking is unsurprisingly expensive and fraught with challenges, both technological and political.

The role of hydrogen in this transformation is now more or less understood by decision-makers and energy professionals. From the International Energy Agency to the floors of the European Commission, a consensus has slowly been formed to use the vast potential of the molecule to enable the energy transition.

This enabling quality does not stop at the decarbonisation of hard to abate sectors where electrification is impossible or impractical, although that plays a big part. Another, oft-verlooked quality of hydrogen is its ability to be stored, long-term, and then dispatched as a feedstock or as electricity as needed. In a renewable energydominated landscape, to which we all wish to arrive, this advantage will be worth its weight in gold.

A crucial component

In the previous article we discussed in some detail the value of dispatchable, transportable energy as a complement to the intermittent, variable power generation offered by solar and wind power.

For Charlotte Roule, director general at French group Storengy, this point is nearly self-evident. “To me hydrogen storage is absolutely critical. We’re in a situation where we want, and need, more and more renewables while the capacity we face limitations due to existing production capacity constraints, leading to curtailment. How do we handle this? Hydrogen is an enabler of the energy transition, enabling us to manage and store excess energy efficiently, thereby overcoming the challenges of capacity and ensuring a steady supply of renewable energy,” she explained.

Boris Richter, managing director of Germany’s Storag Etzel, which owns one sixth of the country’s gas storage infrastructure, concurred wholeheartedly with Roule’s analysis. For Richter and Storag Etzel, Germany’s role in this regard in the European context will be crucial.

“We can’t reach climate targets without hydrogen, this is obvious. We need the molecules. We will need hydrogen in the energy transition, and like the German federal ministry of economics, we expect a high demand for storage. Our region from a storage perspective will be crucial to all of Europe’s hydrogen economy,” said Richter.

The operator of largest cavern field in Europe, and with 75 caverns in operation, Storag Etzel hopes to leverage its experiences and vast portfolio to become a prominent player in the hydrogen storage network

“It’s no secret that we want to be a front runner in hydrogen storage,” Richter said.

Etzel’s portfolio consists of 51 natural gas caverns, and 24 for crude oil storage. Its strategic reserves here extend beyond Germany into Belgium and the Netherlands too. On hydrogen, it already has permits approved for 24 dedicated hydrogen caverns and a mandate from investors to pursue their development.

“We have clear commitments from our long-term investors from the insurance industry and pension funds who want to transform their hydrocarbon assets into renewable assets,” Richter said.

An unknown commodity?

While Richter has demonstrated that investors are looking at storage assets now, the understanding of, and appreciation for, their importance to the future energy outlook is a relatively recent occurrence.

“Until last year there was limited awareness on the storage topic and the importance of underground hydrogen storage,” said Roule.

Storengy, part of Engie, is an underground gas storage company active on market for 70 years. Beyond France, it owns assets in the UK and Germany and boasts more than 1000 employees, with a portfolio of 21 sites. The company is involved in all types of underground storage, from depleted fields to salt caverns and liquefied storage.

Its expertise in the field makes Storengy an invaluable player in the hydrogen storage space. Indeed, the required skills and technical knowledge are in ever short supply in the hydrogen space, so the likes of the company and Storag Etzel will be heavily relied upon in the coming years.

“It’s one thing is to have the infrastructure and technical aspects, but it’s meaningless if you don’t have the people and the knowledge on how to build and operate these assets,” said Roule.

Urgency to act

Both Roule and Richter were adamant that an accelerated timelines in the scale up of these hydrogen storage assets would be needed in order to have them ready by the time the production capacity and storage demand reach the heights they are projected to.

“Whether you’re converting existing storage or building new facilities, the timeline ranges from 5 to 10 years. Therefore, we have to decide now in terms of investment if we want to be ready for the development of the hydrogen market. We can’t wait for the hydrogen to be there first,” urged Roule.

Richter agreed wholeheartedly, saying that — “we have to ramp up – we are already behind our climate targets.”

Climate targets and hydrogen storage go hand in hand, as both Richter and Roule are keenly aware of. Hydrogen is not just a gas story but an electricity story – providing the long-term storage it needs to counter the intermittency of renewable energy. This is how hydrogen enables the transition. Roule cited values similar to Artelys’ Christopher Andrey in the previous article – the environmental value is now well understood, but the kickstart value of building storage infrastructure before the demand is there is an important factor too. As gas-to-power grows, it will need storage assets available, not in planning or development. The insurance and system values of hydrogen storage are equally important when considering the capital expenditure necessary to build it up.

Overall, for Roule, it is about action and attitude, not reaction or platitudes: — “We really need to have a plan. We’re aiming for an orderly transition, not just an optimistic proclamation that ‘tomorrow will be green’,” she said.

Developing a framework

Like other aspect of the hydrogen sector, storage will require its own regulatory framework so that developers and users of the infrastructure can navigate and trust in these assets.

For Richter, Germany is beginning to show signs it is ahead of the game in this respect.

“We are still waiting for a clear regulatory framework, but we received the first bit of good news from the German government that a regulatory market for storage would start from the beginning,” he explained.

The survival and success of hydrogen storage will also obviously depend on the rest of the sector. That means, from Richter’s perspective, ensuring the arrival of affordable molecules to the storage assets, whether produced domestically or imported.

“The most important thing is to find a solution at EU level to import hydrogen and produce it locally at low prices. Our purpose is to have a green and renewable future, but it needs to be balanced from macro-economic point,” he added.

Another familiar refrain is the fact that the market is too young and the task too sizeable to be worried about competition. Hydrogen is about collaboration and moving to our stated goals together.

“We need everyone involved – competition is secondary. We must work together to achieve our goals. We have already joint projects with other operators, and we will go ahead on that. What’s important is that we deliver,” said Roule.

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