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4 months ago
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In an increasingly renewable-based energy system, an integrated and efficient European energy system will face a growing need for short-, medium- and long-term flexibility solutions. Underground hydrogen storage (UHS) is particularly well-placed to act as a key provider of flexibility. UHS allows for flexible and system-friendly operational management of electrolysers and, in the future, for effective delivery of hydrogen to electricity generation technologies. The study carried out by Artelys and Frontier Economics underlines the key role of UHS, and shows that 45 TWh of UHS capacity would be required to comply with the 2030 ambitions set by the REPowerEU plan, and that more than 250 TWh of UHS capacity would be needed by 2050. Urgent and targeted intervention, along with a clear and dedicated UHS roadmap, is required to empower UHS operators to fulfil this role.
The study’s highlights:
- An integrated and holistic approach to EU system planning is required to unlock the full potential of the synergies between molecules and electrons
- Europe’s underground hydrogen storage capacity needs to reach 45 TWh by 2030 to deliver REPowerEU. This represents a significant increase compared to the overall capacity that would be provided by currently-announced projects (9 TWh)
- Investing in and delivering these much needed additional UHS capacity to the EU energy system would provide a significant economic net benefit of 2.5 €bn/year to society
- Policymakers therefore need to ensure that the conditions are right for the market to deliver the necessary investments and that sufficient EU support is available to overcome initial barriers associated with the nascent nature of the hydrogen market
A net benefit for society
Delivering 45 TWh instead of the 9 TWh of UHS capacity associated with currently-announced projects would optimize investment costs for the energy system as a whole (lower overnight investment costs in alternative technologies) and enable a wide range of operational savings. These savings total a net benefit to society of 2.5 €bn/year from the first year of operations and more than 30 €bn over a 20-year period.
As emphasised by Christopher Andrey, Director at Artelys, « This study confirms the intuition that underground hydrogen storage is a key building block to meet the flexibility needs that emerge in an energy system that mostly rely on variable renewable electricity to power electrolysers. Investing in underground hydrogen storage allows electrolysers to operate in a flexible way – thereby minimising energy system costs, decreasing GHG emissions and RES curtailment – and, in the long-run, enables the delivery of hydrogen to hydrogen-fuelled electricity generation technologies that participate in ensuring the security of electricity supply. »
Setting Europe on track for carbon neutrality by 2050
With the REPowerEU plan and the European Green Deal, the European Commission established key policy milestones and ambitious targets for 2030 and, most recently, 2040. The European response to the recent geopolitical instability and conflicts has further reinforced these ambitions, prompting questions among some stakeholders about the feasibility of meeting these ambitions despite the widespread recognition of their necessity.
The hydrogen sector was a key focal point of these reinforced ambitions. The EU intensified efforts to promote the hydrogen electrolytic value chain as an effective complementary strategy to electrification allowing industrial stakeholders to achieve decarbonisation and energy autonomy. All these efforts must not be in vain. There is a significant interest in facilitating the deployment of renewable energy sources by 2030 to support electrification and also ensure that industrial sectors currently reliant on fossil fuels can also invest in decarbonisation efforts via hydrogen.
However, this must be balanced with the risk that a rapid expansion of renewable energy sources requires increased flexibility. Flexibility, though a broad term, essentially allows to avoid costly investments in additional infrastructure by leveraging alternative means to ensure that supply and demand meet in a cost-effective way. In addition to providing an attractive decarbonisation solution for industrial processes, hydrogen, and underground hydrogen storage in particular can also be an attractive source of flexibility services as it can be deployed across all time periods (from the very short to the multi-annual long-term) and at significant scale that cannot currently be matched by other flexibility sources. The flexibility potential of UHS can be demonstrated particularly well when assessing a series of economic and environmental indicators, such as cross-sectoral cost savings, GHG emissions, RES curtailment and more (“the values of UHS”) by adopting a truly integrated and cross-vector energy system perspective..
Modelling system needs on this basis demonstrates that there is a significant gap between the optimal UHS capacity for 2030 (45 TWh) and the capacity that would be delivered by currently-planned and operational projects (9 TWh). This gap only continues to widen as the system moves closer to net zero.
Catherine Galano, Director at Frontier Economics explained « Given the long lead times required to invest in UHS (between 5 to 10 years), there is no time to lose to unlock the potential benefit that UHS can provide to the EU energy system and, ultimately, consumers.”
What are the possible solutions?
GIE recommends policymakers immediately start developing a dedicated hydrogen storage strategy.
Any new policies should avoid applying a silo-thinking approach: solutions lie in better-interconnected systems and interlinked models.
‘’To ensure a competitive, resilient and climate economy in Europe, it is essential to build on synergies across sectors, including molecules and electrons. UHS is expected to play a significant role in that exercise: it will support the energy system as a whole.’’ Stated Doug Waters, GIE Board member.
In this regard, a European-level ambition and associated implementation strategy for UHS would allow for more longer-term visibility for project promoters and Member States to contribute to the further integration of territorial hydrogen hubs and cross-European energy system integration. According to Charlotte Roule, GSE President, “As of now, the most critical priority is to de-risk vital investment for the expansion of the UHS industry at EU level. Ambition shall be explicit, with dedicated signalling support mechanisms.”
We are looking forward to be able to further discuss this key policy topic together with 300 energy experts at the GIE Annual conference on 17-18 October in Munich.
Read the study developed by Artelys and Frontier Economics together with 18 GIE members involved in UHS:
English (US)