Assessing the regional demand for geological hydrogen storage

Executive Summary

Strategic Context

• Decarbonization Imperatives: Hydrogen storage plays a pivotal role in the UK's decarbonization strategy, serving as a critical component for meeting the nation's Net Zero goal by 2050.
• Market Challenges: Without intervention, the market for hydrogen storage may fail to meet the required scale and pace, jeopardizing the government's 2030 and 2035 targets.

Research Outcomes

• Demand Modelling for the East Coast Cluster

  • Methodology:
    • Assumptions: Based on forecasted demands from industry, heat, power generation, and transport sectors.
    • Approach: Daily temporal matching of hydrogen production and demand over an annual period.
    • Findings: The demand for hydrogen storage is directly linked to its usage across various sectors, with significant uncertainties in policy leading to delayed investments.

• Capacity Modelling for the East Coast Cluster

  • Focus: Assessment of underground storage potential, specifically salt caverns.
  • Limitations: Challenges include the total workable capacity of salt caverns, their location relative to producers and users, and the time required for project development.
  • Findings: Despite a promising start with existing and planned salt caverns, the UK faces significant barriers in delivering the required scale of hydrogen storage in time.

Market Barriers

• Technical Limitations: Salt cavern storage technology has constraints regarding scale, location, and project development timelines.
• Policy Uncertainty: Lacking clear directives on hydrogen use in sectors like heat and the role of hydrogen in decarbonizing the power system.

Interventions

• Policy Actions Needed: Immediate policy interventions to clarify hydrogen's role in decarbonization strategies and accelerate project development timelines.

Conclusions and Next Steps

• Risk of Failure: The market for hydrogen storage in the UK is at risk of failing to meet the required scale and pace, especially in the East Coast Cluster.
• Case for Change: Urgent action is required to ensure sustainable and resilient hydrogen storage solutions are developed to support the UK's decarbonization efforts.

Key Takeaways

1. Critical Role of Hydrogen Storage: Hydrogen storage is essential for decarbonization, enabling flexibility in energy systems and supporting the transition to cleaner energy sources.
2. Market Challenges: The lack of clear policy direction and technological constraints pose significant risks to meeting the UK's decarbonization goals.
3. Geographical Focus: The East Coast Cluster is identified as a key area for hydrogen storage investment due to its geology but faces challenges in project scalability and timeline.
4. Immediate Policy Action Required: Urgent policy interventions are needed to clarify hydrogen's role and accelerate project development to mitigate the risk of market failure.