Report Highlights Storage Challenges for UK Hydrogen Economy Growth
A report by Baringa for the Department for Energy Security and Net Zero reveals that the UK's hydrogen economy faces significant storage challenges, with a projected doubling of storage capacity requirements if transitioning to 100% hydrogen generation. Limited availability of suitable salt cavern storage and increased operational costs from hydrogen-capable turbines further complicate the shift, while rising power demand from AI data centers may strain the gas turbine sector and hinder hydrogen turbine availability.
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A report by Baringa for the Department for Energy Security and Net Zero indicates that the UK's hydrogen economy faces significant storage challenges. It estimates that a shift to 100% hydrogen dispatchable generation would more than double storage capacity requirements compared to a 10% natural gas share.
The need for increased storage is driven by inter-seasonal variability and the elimination of natural gas as a backup during low renewable output periods. Limited availability of salt cavern storage, essential for hydrogen, is restricted to regions with suitable geology like Cheshire, Humberside, and Dorset.
Additionally, hydrogen-capable turbines may operate at up to 20% lower capacity, increasing operational costs. There is also a projected 10% capital expenditure premium for new hydrogen systems compared to natural gas. Furthermore, rising power demand from AI data centers is expected to strain the gas turbine sector, potentially increasing costs and limiting hydrogen turbine availability.
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