Underground Hydrogen Storage Market (By Storage Type: Porous Media Storage, Salt Caverns, Engineered Cavities) - Global Industry Analysis, Size, Share, Growth, Trends, Revenue, Regional Outlook and Forecast 2024-2033

Underground Hydrogen Storage Market Size and Trends

The global underground hydrogen storage market size was estimated at around USD 1.63 billion in 2023 and it is projected to hit around USD 4.56 billion by 2033, growing at a CAGR of 10.84% from 2024 to 2033.

Key Pointers

• Europe region dominated the market with the largest market share of 59% in 2023.
• The North American underground hydrogen energy storage market is poised for growth from 2024 to 2033.
• By Storage Type, the salt caverns segment registered the maximum market share of 98% in 2023.
• By Storage Type, the porous media storage held the second-largest market share in 2023.

Underground Hydrogen Storage Market Overview

The underground hydrogen storage market is witnessing significant growth driven by the increasing global shift towards renewable energy and the need for sustainable energy storage solutions. Hydrogen, as a clean energy carrier, plays a crucial role in balancing energy supply and demand, especially from intermittent renewable sources like wind and solar.

Underground Hydrogen Storage Market Growth Factors

Underground hydrogen storage is gaining momentum due to it offers a solution to the intermittency of renewable energy sources like wind and solar by storing excess energy in the form of hydrogen. This enhances grid stability and reliability. Secondly, the push towards decarbonization and the increasing adoption of hydrogen as a clean energy carrier drive demand for storage solutions. Thirdly, advancements in hydrogen production technologies, such as electrolysis powered by renewable energy, are making hydrogen storage more viable and sustainable. Lastly, supportive government policies and investments in hydrogen infrastructure further propel market growth, creating a conducive environment for the expansion of underground hydrogen storage facilities.

Underground Hydrogen Storage Market Trends:

• Growing Renewable Energy Integration: Increasing integration of renewable energy sources like wind and solar necessitates efficient energy storage solutions such as underground hydrogen storage to manage intermittency and ensure grid stability.
• Rising Demand for Clean Energy: With a global shift towards decarbonization and clean energy solutions, there is a rising demand for hydrogen as a clean energy carrier, driving the development of storage infrastructure.
• Government Support and Investments: Supportive government policies, subsidies, and investments in hydrogen infrastructure are facilitating the growth of the underground hydrogen storage market, creating a favorable regulatory environment.
• Emerging Use Cases: Increasing applications of hydrogen in sectors such as transportation, industrial processes, and energy storage are expanding the market for underground hydrogen storage solutions.
• Techno-economic Feasibility: Improvements in the techno-economic feasibility of hydrogen storage, including cost reductions and efficiency improvements, are boosting market adoption and investment in underground storage facilities.

Underground Hydrogen Storage Market Restraints:

• High Initial Costs: The initial capital investment required for developing underground hydrogen storage facilities is substantial, including costs for site preparation, construction, and safety measures, which can deter potential investors and project developers.
• Regulatory and Permitting Hurdles: Obtaining regulatory approvals and permits for underground hydrogen storage projects can be complex and time-consuming due to safety, environmental, and land use considerations, posing barriers to market entry and expansion.
• Limited Infrastructure: The current infrastructure for hydrogen transportation and distribution, including pipelines and refueling stations, is limited and fragmented, hindering the scalability and widespread adoption of underground storage solutions.
• Public Perception and Safety Concerns: Public perception regarding the safety of hydrogen storage, particularly underground, and concerns over potential risks such as hydrogen leakage or accidental releases, can influence regulatory decisions and community acceptance, impacting project development.
• Market Immaturity: The underground hydrogen storage market is still in its nascent stages, lacking established standards, benchmarks, and proven commercial-scale projects, which may deter investor confidence and slow market growth.

Storage Type Insights

In terms of volume, the salt caverns segment dominated with a share of 98% in 2023. Salt caverns, formed from salt domes and bedded salts, offer high deliverability with a short cycle of 10 to 20 days. They are the most costly among storage types due to the infrastructure requirements for solution mining. Unlike depleted reservoirs, salt caverns require less cushion gas injection, typically around 20%-30%. Increased investments in salt cavern-based underground hydrogen storage facilities are expected to drive segment growth from 2022 to 2033.

Porous media storage held the second-largest market share in 2023. This type includes limestone, shale, and conglomerate formations, ensuring high permeability and void fractions ideal for hydrogen storage. It encompasses gas and depleted fields, as well as aquifers. Porous media storage is being touted as an effective and sustainable method for underground hydrogen storage, balancing renewable energy supply and seasonal demand.

Engineered cavities, such as modified mine shafts for hydrogen storage, are still in the research and development phase. Several pilot projects are underway, with conceptual designs aimed at assessing their potential outcomes.

Regional Insights

Europe led in volume share with 59% in 2023. The region has made substantial investments in hydrogen energy as an alternative power source, aiming for energy independence and expanding domestic underground hydrogen storage capacities. The UK government, in particular, has heavily invested in hydrogen generation and storage capabilities, positioning itself as a key player in the emerging hydrogen economy.

Within Europe, the UK accounted for the largest volume share at 18.78% in 2023. Its commitment to achieving net-zero targets and increasing investments in hydrogen infrastructure are pivotal factors shaping the underground hydrogen storage industry within the country.

The North American underground hydrogen energy storage market is poised for growth from 2024 to 2033. The region has seen rapid expansion in hydrogen energy storage, driven by advancements in various applications and technologies.

Underground Hydrogen Storage Market Key Companies

• Air Liquide
• Air Products and Chemicals, Inc.
• Engie
• Linde plc
• Texas Brine Company, LLC
• Uniper SE
• WSP

Underground Hydrogen Storage Market Segmentation:

By Storage Type

• Porous Media Storage
• Salt Caverns
• Engineered Cavities

By Region

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East and Africa