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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.