The Role of Natural Gas Storage in Ensuring Security of Supply and Promoting Decarbonization
With the largest storage capacities in Germany, Uniper Energy Storage is already making a significant contribution to ensuring the supply of gas, while also driving forward the energy transition of tomorrow
As things stand, Germany's natural gas storage facilities are almost completely full ahead of winter. To ensure that this remains the case, the German government adopted new gas storage fill level requirements in May of this year and, in doing so, created a regulation to ensure that gas reservoirs remain sufficiently filled. The Energy Industry Act stipulates that storage facilities must be 85 percent full in October, 95 percent full in November and 40 percent full in February. If storage companies and their customers do not comply with these requirements, the "use it or lose it principle" will see their capacities transferred to market area manager Trading Hub Europe, who will in turn store the difference in order to balance gas reserves.
Especially, if not only, at a time when the import situation has grown uncertain due to the loss of Russian gas volumes, natural gas storage facilities constitute a mainstay of security of supply — at peak times, usually January and February, when gas consumption is at its highest, these storage facilities cover 60 to 70 percent of daily demand. Uniper Energy Storage is the largest storage company in Germany and therefore plays a significant role in ensuring the security of the gas supply.
The Future of Natural Gas Storage in the Hydrogen Economy
In order to diversify sources of natural gas and become independent of Russian gas supplies, Uniper is building Germany's first terminal for liquefied natural gas (LNG) in Wilhelmshaven. But this is only a short-term solution. In the long-term, the terminal will be used as an import facility for green, climate-neutral gases such as hydrogen in the form of ammonia. This will pave the way for a hydrogen economy and the energy transition. Here, too, natural gas storage facilities play an important role, as market participants can only react flexibly to fluctuations in supply and demand by stockpiling hydrogen in large volumes.
While there are already projects underway that are investigating whether the large pore storage facilities in southern Germany are suitable for storing hydrogen and how they can best be used, it is now clear that the salt caverns in the north of the country are ideal for storage. "Our storage facilities will also be able to store hydrogen in the future," says Maike Dupont, Manager of Stakeholder Relations at Uniper Energy Storage GmbH. "As decarbonization increases, they will be able to provide the flexibility required in an evolving hydrogen infrastructure."
However, as existing gas storage facilities are designed for natural gas, the technology needs to be adapted before they can be used to store hydrogen. This will involve substantial investments, for which the authorities must first create the appropriate regulatory frameworks and incentives to invest. Nevertheless, it is much more economical to convert the existing infrastructure than to build separate infrastructure for hydrogen. Converting an existing natural gas storage to a hydrogen storage facility takes considerably less time than developing a new H2 storage facility, making conversion the preferred option. However, natural gas storage facilities will also need to be kept intact over the next few years. "There is no alternative to storing hydrogen in large volumes. Within Europe, Germany has the best geological conditions for cavern storage," explains Michael Schmöltzer, Functional Head Business Support and Office Austria at Uniper Energy Storage GmbH. "Since almost 80 percent of all cavern storage facilities in the EU are located in Germany, we are in an ideal position to switch to a hydrogen economy," he continues.
Investigating Real-World Hydrogen Storage Solutions
It is already possible to add hydrogen to the natural gas network in small percentages. "However, the goal is to establish a pure hydrogen infrastructure with all the associated conversions in grids and storage facilities," says Schmöltzer. Uniper is currently working resolutely on the development of a storage solution for green hydrogen on a commercial scale. As part of these efforts, the company is running a pilot project in Krummhörn, North Germany, to test hydrogen storage in a real-world environment. The project is currently in the permitting planning and “detail engineering” phase and is expected to go into operation by 2024. Due to its proximity to other Uniper activities supporting the transition to hydrogen in Wilhelmshaven and surroundings, the project is part of the “Energy Transformation Hub Northwest”. Take a look at the website for further details.
This blog piece is part of the series on Uniper’s activities relating to the Energy Transformation Hub Northwest.