Green Hydrogen Energy Storage: Stabilising Grids and Integrating Renewables

The world is rapidly shifting towards cleaner energy solutions, and green hydrogen (GH2) is emerging as a transformative force in energy storage. As global energy grids increasingly integrate renewable sources like solar and wind, balancing power supply and demand becomes crucial. Green hydrogen offers an innovative solution by acting as a long-term energy storage medium, which has the potential to revolutionise energy grids, reduce carbon emissions, and support a renewable future. 

This blog explores the expanding hydrogen energy storage market, its impact on various sectors, and the opportunities and challenges in its adoption.

The Hydrogen Energy Storage Market: Current Trends and Projections

The Hydrogen Energy Storage Market was valued at USD 17.1 billion in 2023 and is expected to grow at a CAGR of 8.4 percent from 2024 to 2032. 

Hydrogen can be stored in various forms—gaseous, liquid, and solid—to suit different applications and consumption needs. The method of storage depends on factors like transportation methods and end-use requirements.

Compression Storage

This segment is projected to grow at a 7 percent CAGR between 2023 and 2032. Advanced techniques like cryogenic compression, where hydrogen gas is cooled before compression, are improving efficiency and reducing energy requirements. This method enhances delivery options, contributing to the rising adoption of compressed hydrogen storage.

Gaseous State Storage

Gaseous hydrogen storage is expected to grow at a 7 percent CAGR through 2032 and has been the dominant storage method in recent years due to its lower operating costs and capital requirements. This method, ideal for industrial applications, uses high-pressure tanks (350–700 bar), making it a cost-effective and widely adopted option. The existing infrastructure for high-pressure storage is commonly utilised in industrial and electronic sectors, further supporting its popularity as the primary hydrogen storage solution.

Solid and Liquid State Storage

The solid storage segment led the market with over 50 percent revenue share in 2023. This method involves storing hydrogen in materials using absorption or adsorption techniques. Liquid hydrogen storage, though limited to specialised applications like space travel, also plays a role in high-tech and bulk storage scenarios, such as the Ariane launcher tanks designed by Air Liquide.

Regional Insights and Industrial Impact

Asia Pacific leads the hydrogen energy storage market, with its industry size reaching USD 8 billion in 2022. This region, including countries like Australia, India, China, and Japan, held the largest revenue share of over 37.48 percent in 2023. 

Governments are heavily investing in clean energy technologies to boost production, storage, distribution, and utilisation of hydrogen. In the coming years, Australia, Japan, and Korea aim to establish hydrogen supply chains for power generation and export-import trade.

The industrial application segment dominated the market, with over USD 10 billion in revenue in 2022. The adoption of hydrogen energy storage across industries like fertiliser and chemical production highlights its growing role in meeting industry feedstock demand. This trend is supported by rapid industrialisation in developing countries and the shift towards alternative energy sources to reduce greenhouse gas emissions.

Revolutionising the Energy Grid: The Role of Green Hydrogen

A major benefit of green hydrogen is its capability to act as a grid stabiliser by storing excess renewable energy during periods of low demand. Hydrogen can be produced through electrolysis using surplus power from renewable sources. When energy demand peaks, the stored hydrogen can be converted back into electricity using fuel cells, or it can be used directly as a fuel in various applications.

Unlike conventional batteries that discharge within hours, hydrogen can store energy for months without significant loss. This long-term storage capability is essential for balancing the energy grid, ensuring a stable and reliable power supply, and enabling deeper integration of renewable sources like solar and wind.

GH2 for All

Additionally, green hydrogen’s flexibility allows it to serve multiple sectors:

Transportation: Hydrogen-powered vehicles and vessels provide zero-emission alternatives for long-haul travel, including hydrogen-fuelled ferries currently under development in countries like Norway and Japan. These initiatives highlight hydrogen’s potential in reducing emissions and enhancing energy security.

Industrial Processes: Hydrogen is crucial for decarbonising hard-to-abate sectors such as iron and steel, chemicals, and other manufacturing processes. The increased storage infrastructure supports these industries' shift towards sustainable practices.

Residential and Commercial Applications: Countries like Japan have introduced legislative frameworks such as the ENE-FARM program, encouraging the use of hydrogen fuel cells for residential micro-combined heat and power (micro-CHP) systems, driving clean energy adoption in homes.

Challenges in Hydrogen Energy Storage

Despite its promise, the hydrogen energy storage market faces several challenges:

Distribution Issues: Developing countries in regions like Africa and parts of the Middle East struggle with establishing distribution channels. The lack of hydrogen distributors hampers industry expansion and limits the packaging and supply of industrial gases.

High Capital Costs: Hydrogen storage infrastructure requires significant investment, especially for large-scale facilities. These costs, combined with the need for vast storage areas, present hurdles to widespread adoption.

Safety Concerns and Efficiency: High-pressure hydrogen storage systems and transport networks must be developed and maintained safely. Although repurposing existing natural gas pipelines could reduce costs, the conversion and management of these systems require careful planning.

While the green hydrogen storage market holds vast potential, challenges are hindering its growth, compounded by the complexities already associated with its production. A recent setback occurred in Australia, where the country’s ambition to become a global hydrogen superpower faced a blow. Origin Energy, the nation’s largest energy utility, withdrew from developing a large-scale green hydrogen hub, despite the project being shortlisted for a share of USD 2 billion in funding from the Albanese government.

The Road Ahead: Global Initiatives and Policies

Governments worldwide are setting ambitious targets to promote hydrogen use in various applications like transportation and stationary storage. For instance, India set targets in 2023 to drive green hydrogen demand, aiming to reach net zero emissions by 2070. Such policies are crucial in accelerating the development of hydrogen storage infrastructure.

The introduction of hydrogen-based incentives and subsidies will further drive demand, supporting market growth. By strengthening the legislative framework, countries like Germany, France, and Belgium are also encouraging the adoption of hydrogen fuel cells for residential and industrial applications.

Green hydrogen is set to revolutionise the energy grid, providing a sustainable, long-term storage solution that aligns with global efforts to reduce carbon emissions and integrate renewable energy. Its versatility extends across various sectors - transportation, industrial processes, residential energy use - making it a key technology in the shift to a low-carbon future. As countries continue to invest in infrastructure and overcome challenges, green hydrogen will play an increasingly vital role in achieving energy security and sustainability.

Moreover, by leveraging the full potential of green hydrogen, the energy industry can build a resilient and reliable grid that supports the transition towards a cleaner, renewable future.