European Hydrogen Storage: Key to Enhancing Energy System Adequacy and Security in PLEXOS

This blog is part of a series on hydrogen in PLEXOS, following our discussion on hydrogen transport modelling, which can be found here.

Why Hydrogen is Crucial for Renewable Energy

The International Energy Agency (IEA) forecasts that almost 90% of electricity will come from renewable sources by 2050 - relying on such sources like sun, wind, and hydro (IEA Pathway to net zero). Renewable sources cannot always produce energy consistently or at all hours of the day, creating an intermittency issue. This means the production of electric power from these sources can be quite volatile. For example, solar energy production depends on the levels of solar radiation, climatic conditions, and weather patterns that change and fluctuate throughout the day. Similarly, wind power production profiles are influenced by wind speed and direction, and the relation of these factors to wind turbines’ technical characteristics. Although green and renewable, these renewable energy sources production profiles can be volatile and unstable.

This presents a challenge to global energy efforts to decarbonize and achieve net-zero goals globally. Net-zero goals, scenarios and targets incorporate a high share of intermittent energy sources in the overall energy mix, creating a pronounced need to supplement them with other solutions like energy storage. Another solution that helps address this problem, and aids in the transition to a greener energy mix, is hydrogen. For the power industry, hydrogen becomes instrumental thanks to its ability to serve as a longer-term storage solution, supplementing battery, and pumped hydrogen storage options during peak demand periods.

In the power sector, there are only a few tools that help deal with intermittency during high demand periods: peak shaving and load shifting. The term peak shaving refers to leveling out peaks in electricity use by tapping into energy storage or alternative fuels, thus reducing electricity demand at peak times. Load shifting relieves stress on the energy system by shifting load to a period of lower demand, redistributing it.

Hydrogen storage can be used for both peak shaving and load shifting. Additionally, it can be regarded as an alternative to natural gas as it can be transported and stored in a similar way, with specific considerations and adjustments that cater to its chemical and physical characteristics.

In this article, we will focus on the role of hydrogen as a storage solution. Specifically, we will leverage the results from our latest PLEXOS European Hydrogen Dataset that incorporates fundamentals of hydrogen market dynamics, and forecasts of these out to 2050 based on the European Ten Year Network Development Plan (TYNDP) global ambition scenarios. The analysis represented in this dataset clearly demonstrates the instrumental role hydrogen storage can play in influencing emerging hydrogen market dynamics.

How is Hydrogen Stored?

Hydrogen can be stored in a variety of ways:

• As a gas compressed in special high-pressure tanks
• As a liquid in dewars or tanks at very low temperature of –253 C
• As a solid, created by reacting with metals or chemicals, or stored in chemical form

Image provided by Jenia Mezententseva, an employee at Energy Exemplar. Used with permission.

Hydrogen's chemical and physical properties enable it to be stored similarly to natural gas in underground storage and salt caverns. In fact, at the moment, salt caverns represent the easiest way to store hydrogen. The salt acts as a sealant and salt caverns provide extremely high pressure where the salt layer is thick or deep enough.

In our PLEXOS European Hydrogen Dataset, storage is modeled as an aggregation of storage capacity for each country, in line with the assumptions of the ENTSOG TYNDP. Hydrogen storage is assumed to represent underground salt caverns that are forecasted to be modified to suit hydrogen storage requirements. Storage is used to enhance the view and cater to high demand situations, helping balance supply and demand and assisting in peak shaving.

With the PLEXOS European Hydrogen Dataset we observe that hydrogen storage will play a similar role to natural gas storage - enhancing system flexibility and security of supply in Europe under different supply, demand and infrastructure deployment scenarios and by managing peak demand, and dealing with peak and low pricing dynamics.

The TYNDP Global Ambition scenario considers hydrogen infrastructure level 1 and level 2. Level 1 is based on project submission data. Hydrogen infrastructure level 2 is a bottom-up infrastructure level that was based on the hydrogen infrastructure level 1 as a minimum and, in addition, considers additional infrastructure assumptions – more specifically, higher hydrogen storage volumes, import capacities, and higher cross-border capacities for some regions.

In the PLEXOS European Hydrogen Dataset, we assume level 2 storage infrastructure that is expected to mitigate demand curtailment in all years and scenarios, assuming updated infrastructure, removing bottlenecks and allowing for higher hydrogen imports and additional blue hydrogen production. This enables methane storage usage and ensures that seasonal hydrogen demand is catered for. This level includes new and repurposed infrastructure.

Our PLEXOS European Hydrogen Dataset incorporates seasonal functions and dynamics of storage which are defined through available complex storage properties suitable for detailed storage modelling.

German Storage and the PLEXOS European Hydrogen Dataset

With ambitious energy supply diversification and net-zero goals, Germany is expected to become a net hydrogen importer. The PLEXOS European Hydrogen Dataset demonstrates the supply/demand gap in Germany represented through limited indigenous production and higher demand requirements, hence, the reliance on neighboring countries that have higher production potential.

German Balance in PLEXOS European Hydrogen Dataset

Image provided by Jenia Mezententseva, an employee at Energy Exemplar. Used with permission.

Imports into Germany by Source (PLEXOS European Hydrogen Dataset)

Image provided by Jenia Mezententseva, an employee at Energy Exemplar. Used with permission.

However, the key element in the German balance is hydrogen storage. With limited indigenous capabilities, the availability of storage facilities creates an opportunity to provide system security and system adequacy.

In addition to storage being used to smooth demand peaks, allowing more imports to come into the country, it also acts as a hub for storing transit volumes during soft price fundamentals periods.

German Storage Working Utilization (PLEXOS European Hydrogen Dataset)

Image provided by Jenia Mezententseva, an employee at Energy Exemplar. Used with permission.

The chart above demonstrates that storage utilization reaches almost 100% during infrastructure bottlenecks, particularly where we observe very low Norwegian exports. As the bottleneck pressure is alleviated, the utilization goes down. However, throughout the forecast, storage utilization remains quite high - providing capacity to save hydrogen and use it during peak demand / peak price periods. It also provides the element of system security for transit volumes as a secondary role for the wider region.

Our analysis demonstrates the importance of storage availability to the system flexibility and security overall, with the Germany example reinforcing the hypothesis that transition volumes can also be saved for storage during softer market fundamentals times and utilized during periods with tighter market conditions. Germany itself is seeking evidence-based analysis and conducts projects to perform technical and economic feasibility studies for gas storage conversion or hydrogen repurposing. One bright example of such studies is the initiation of the H2CAST Etzel feasibility study project to research and develop conversion of existing gas caverns to hydrogen, where hydrogen is viewed as the energy carrier of the future, ensuring the facility is hydrogen ready, which recognizes and confirms the importance of hydrogen storage availability to the market (Source: https://www.storag-etzel.de/en/)

 The PLEXOS European Hydrogen Dataset demonstrates the clear role of hydrogen storage in the future of hydrogen market fundamentals and shows storage dynamics similar to those observed in mature and well-established natural gas energy systems.

Energy and hydrogen storage are instrumental and essential to providing peak demand shaving, system security, and adequacy for tighter fundamental market periods. Storage provides system flexibility for internal market dynamics and for wider cross-country dynamics where transit markets have higher storage facilities available to inject volumes throughout softer market fundamentals periods and withdrawals at tighter times.