Impulse #23: The battery of the energy transition

Ensuring security of supply and simultaneously pushing ahead with decarbonization - these are truly not easy tasks that the energy sector is currently facing. More than ever, it is important to develop innovative solutions and promote alternative energy sources in order to build a secure energy system for the future in a rapidly changing environment. As a leading specialist for underground natural gas and hydrogen storage in Europe, we at Storengy Deutschland, an ENGIE Group company, would like to contribute to this. If we don't know each other personally yet, I would like to introduce myself briefly: My name is Daniel Mercer, I have been Managing Director of Storengy Germany since October 1, 2023 and in this role I am committed to climate neutrality together with my entire team. I have been involved in energy generation and management for more than 20 years - feel free to contact me on LinkedIn to exchange experiences directly

Shaping the energy system of the future

At Storengy Deutschland, we have a clear vision: we want to drive forward innovative projects for hydrogen storage and the conversion of natural gas storage facilities for hydrogen storage. We believe in the "climate hope of hydrogen" and want to play our part in paving the way for a hydrogen-based energy infrastructure in Germany and Europe. Our aim is to help energy-intensive industries in particular - such as the chemical and steel industries and heavy goods transportation - on their way to climate neutrality. Of course, the expansion of renewable energies must be accelerated and the generation, transportation and storage infrastructure for industry must be expanded. However, these sectors have special requirements, which is why they will be dependent on gaseous energy sources in the form of hydrogen in the future. And the demand is enormous: in the update of the National Hydrogen Strategy from September 2023, the Federal Ministry for Economic Affairs and Climate Protection (BMWK) assumes a massive increase in climate-friendly hydrogen production in Germany in the coming years from 55 terawatt hours per year (2023) to up to 130 terawatt hours (2030). Due to climate protection efforts, this increase is expected to increase significantly again by 2045, to more than 350 terawatt hours. As a result, there is not only a need for a strong expansion of hydrogen production in Germany, but also of the hydrogen infrastructure. Only if electricity from renewable energies is converted into hydrogen by means of electrolysis and then transported, used flexibly and stored can the conversion of energy-intensive industries and the development of a stable, cost-efficient energy system of the future succeed. At its core, this is about nothing less than security of supply in Germany and Europe. To achieve this, short-term solutions such as modern battery storage systems are just as essential as long-term systems in the form of underground hydrogen storage facilities. Without these, decarbonization will not succeed; only with them can the potential of hydrogen for achieving the climate targets be fully exploited. Hydrogen storage is the battery of the energy transition.

„Hydrogen storage is the battery of the energy transition. With the pioneering SaltHy project in northern Germany, we at Storengy Deutschland are driving the market ramp-up for hydrogen in Europe.“

Pioneering project for hydrogen storage

This is precisely where we come in with the SaltHy hydrogen storage project in Harsefeld near Stade, Lower Saxony. This is a pioneering project on an industrial scale and one of the very first hydrogen storage facilities in Germany. Storengy Deutschland's core team of around 20 people is currently in the planning phase: we have started the mapping work and the first approval documents are due to be submitted in the course of 2024. Construction work is currently scheduled to begin in 2026 with the sinking of the first boreholes, meaning that the work will be completed in 2030/32 and SaltHy will go into operation. The timeline is therefore extremely ambitious. The first cavern is designed for a storage volume of 7,500 to 10,000 tons of hydrogen; the ENGIE Group will decide on a second cavern of a similar size in 2028. For comparison: 7,500 tons of hydrogen is roughly equivalent to the two-month requirement of a steelworks, which needs around 140 tons of hydrogen per day.

Pushing the market ramp-up for hydrogen

What specifically characterizes SaltHy? With this project, we are expanding our existing Harsefeld natural gas storage facility to include salt caverns for the underground storage of 100 percent hydrogen. For the Storengy Deutschland team, our hydrogen vision thus meets a proven technology, as our specialists are applying their expertise from many years of experience in the construction and safe operation of salt cavern storage facilities for natural gas to hydrogen storage. Accordingly, we will be able to store hydrogen safely, efficiently and, if necessary, over long periods of time. Harsefeld offers ideal conditions for this: On the one hand, we have been operating the natural gas storage facility there for 30 years without a lost-time accident and rely on close cooperation with partner companies in the region, which means we are well established locally. Secondly, Stade is currently developing into a hydrogen hub for import and production, for transportation and storage and for the use of hydrogen. This is because the Hanseatic city's geographical location with its adjacent port makes it a central hub for trade, logistics and industrial development. To verify this, we conducted a market survey among more than 20 customers in March of this year: The results confirm that their demand for future hydrogen storage facilities in the region is high.

SaltHy as a key project for the future of energy

Last but not least, SaltHy will be directly connected to the first expansion stage of the international hydrogen pipeline network, making it a key project for the development of the so-called European H₂ backbone (European Hydrogen Backbone (EHB) Initiative). Northern Germany, and the Stade region in particular, already play an important role as a hub for many long-distance gas pipelines that can be converted to transport hydrogen in the future. As things stand today, salt cavern storage facilities - which are mainly found in the north - are better suited to storing hydrogen than the pore storage facilities that are widespread in southern Germany and southern Europe. Forecasts also show that hydrogen will be imported from surpluses from the Mediterranean region, overseas and northern Europe in the future. In addition, it is expected that consumption centers in Northern and Western Europe will concentrate; as a result, hydrogen flows will increasingly move towards Germany. Overall, the H₂ backbone will reduce CO₂ emissions by up to 313 million tons and save 330 billion euros compared to unconnected clusters. SaltHy is an important building block for this.

With hydrogen to climate neutrality

Not least for this reason, SaltHy was included in the EU list of "Projects of Common Interest (PCI)", which can lead to an inflow of European funding and an acceleration of the approval processes for our lighthouse project. This is very important. Despite the high relevance of hydrogen storage for the energy system of the future, there are still considerable hurdles to overcome today. In particular, I consider the lack of a legal framework to be critical: it is essential that the BMWK provides good financing mechanisms to support investment decisions for hydrogen projects, i.e. to mobilize more funds in Germany. I expect that the federal government's new hydrogen storage strategy, which is to be presented in December 2024, will set the appropriate political course and reduce the volume and price risk in the ramp-up phase. The energy system of the future will rely heavily on hydrogen to guarantee security of supply and successfully shape the energy transition. That is why the hydrogen infrastructure with storage facilities must be built now. We at Storengy Deutschland are ready for this - and proud to be driving forward the market ramp-up for hydrogen in Germany and Europe with our flagship project SaltHy and contributing to the successful achievement of climate targets.

Dear readers, what questions do you have about our flagship project SaltHy? Or would you like my team and I to advise you on hydrogen in general? I look forward to hearing from you, by e-mail or on LinkedIn!

Sincerely

Daniel Mercer
Managing Director of Storengy Deutschland GmbH