Storage crucial to delivering a UK hydrogen economy


Large-scale storage is “essential” if hydrogen is to deliver on its role in decarbonising the UK, according to the North West Hydrogen Alliance (NWHA), which has called on government to accelerate its plan for hydrogen storage business models.

On 16 August, NWHA published, The role of storage in delivering a hydrogen economy in the UK, where it detailed how despite support mechanisms for hydrogen production progressing well towards implementation, there remains a need for greater focus on the necessary distribution and storage infrastructure to deliver hydrogen at scale. It deemed the government’s intention to design new business models for storage infrastructure by 2025, as confirmed in the Hydrogen Sector Development Action Plan, to be “insufficiently ambitious” and is calling for it to brought forward “to at least 2023”.

The UK’s gas storage facilities in proportion to its national gas usage pale in comparison to the rest of Europe. It has around 15TWh gas storage capacity, representing 1.7% of the UK’s 2019 total gas consumption, or around six days of UK average demand. Germany and France, in contrast, have 239TWh and 133TWh respectively. The role of North Sea gas reserves in increasing production have shielded the UK from its low storage levels in the past, though obviously decarbonisation gathering pace will change the picture.

For hydrogen to play its part, large-scale hydrogen storage is set to be crucial, balancing hydrogen produced with intermittent renewables, maximising the efficiency of CCUS enabled hydrogen production facilities, and balancing the energy supply to meet the variable demands of both commercial and domestic heating, and electricity. It will also help to provide national energy security and resilience, as well as supporting potential 20% hydrogen blending in 2023, should government decide to proceed with this.

In terms of how much hydrogen storage will be needed, it estimates around 4TWh of underground storage to balance the seasonal variation in hydrogen demand per 1mn homes in the UK. Estimating storage needs for hydrogen fired powered generation was noted as being more challenging, though it estimated an 810MW hydrogen fired gas turbine would call for around 500GWh of hydrogen storage.

It went on to make a series of recommendations, firstly calling for the business model for large-scale hydrogen storage to be accelerated to deal with the long lead times that new and converted hydrogen storage facilities face, allowing for the UK to have necessary scale hydrogen storage in place by the late 2020s. It suggested a cap and floor mechanism or guaranteeing a full revenue stream through the Regulated Asset Base (RAB) model, as has been proposed for new nuclear power stations, as potential policy mechanisms that could form the hydrogen storage business model.

Elsewhere, it is advocating that small scale storage is included in the hydrogen production business model, explaining that providing funding for these costs can unlock investment decisions for early electrolytic hydrogen production projects. Given that they are aiming to be operational before the launch of the hydrogen storage business model, they will need to be supported in shouldering extra costs of their small-scale storage requirements.

It is also calling for network and storage infrastructure to be developed in tandem. Large-scale hydrogen storage will necessitate transport infrastructure for hydrogen to reach its end users, with NWHA recommending the Future System Operator coordinates with the key players in hydrogen to ensure both hydrogen networks and storage are either built, repurposed, or both, in tandem to unlock the full potential of hydrogen and avoid any potential efficiency losses due to imbalances in their respective scale ups.