Storage a Key to Hydrogen Market Growth

Storage a Key to Hydrogen Market Growth


Oct 2, 2017

Blog Energy and Resources Storage a Key to Hydrogen Market Growth

Few people really doubt that hydrogen is a key future energy source—no, that’s not the industry’s problem. The thing that keeps hydrogen markets up at night is how to store the energy.

Hydrogen can be stored physically or by using chemical or material-based methods. Physical storage currently dominates the market and is expected to see the most growth through 2022. Physically, hydrogen can be stored as either a gas or a liquid. Materials-based hydrogen storage includes metal hydride, chemical hydrogen storage and sorbent materials.

Salt Caverns Repurposed to Store Hydrogen

Traditionally, folks looking to store hydrogen stick it underground—usually in caves, salt domes or depleted oil and gas fields. Imperial Chemical Industries, a London-based chemical firm founded in 1926 (and shuttered in 2008), stored hydrogen underground for years without any problems.

The key to successful hydrogen storage is something called a turboexpander, a turbine used to compress gas in part by using very low temperatures. One of these is found 2,800 feet underground in Sweeny, Texas at a plant operated by Chevron Phillips. The 1,000-foot high, 160-foot diameter plant can store 1,066 million cubic feet, or 2,520 metric tons of hydrogen.

Currently, there are nearly two dozen salt caverns being used for hydrogen storage in the U.K., more than a dozen in France, and several more in Russia, Germany, and the Czech Republic. The world’s largest below-ground hydrogen storage facility is planned for a cavern near Beaumont, Texas by Aire Liquide.

VC Fuels Development

Strong growth in this tech-intensive market comes thanks in part to strong venture capital funding and investments. Companies like Intelligent Energy report raising more than $166 million in VC; other winners are Plug Power, McPhy Energy and Elector Power Systems. Governments are playing a VC part, too; the U.S. Department of Energy recently announced $30 million in available funding for research and development including work on hydrogen storage, and the Australian Capital Territory is prepared to dole out $180 million in research funds, part of which is also tagged for hydrogen energy storage technology.

Demand for Storage Is High and Should Stay That Way

Globally, the market for hydrogen storage materials and technologies market is estimated to have reached $3.4 billion in 2015, and by 2021 the market could grow to $5.4 billion. Annual growth should average 8.1% through 2021, showing that the market expansion is strong. The transportation sector, buoyed by strong growth, will see an increase in market share, with growth rates exceeding 10% annually. The oil refining industry is expected to grow at 8.2% annually between 2016 and 2021, further stabilizing growth potential.

For some consumers, hydrogen storage hits closer to home. Sales of hydrogen fuel cell cars are slowly creeping up on that of electric vehicles, according to some reports. Storage here has been an issue, too.

Toyota, Hyundai and Honda all produce fuel cell vehicles, although most are just released on leases and sales are limited to California, which has most of the nation’s 34 hydrogen fueling stations open to the public. General Motors recently sold a fuel cell pickup to the U.S. Army, and Hyundai is working on a longer-range hydrogen-powered SUV.

Competition Makes It Hard for New Players to Enter Market

The market has a large number of players from different categories and is highly competitive, according to a report from BCC Research, Hydrogen Storage: Materials, Technologies and Global Markets. “The key to survival in the market is technological innovation and ability to adapt, and companies that are slow to innovate face the threat of a complete wipeout from the market,” the report says. “The demand-driven nature of the market, strong growth and presence of large number of players has made this a highly competitive market.”

This competition is making it hard for new companies to get in on the action. The best chances go to those who possess a new, superior technology—and to those who can keep innovation levels strong. The BCC Research report predicts that the strong growth will continue to attract new entrants and that trend should continue for the next several years at least.

For more information and market forecasts and CAGRs through 2021, download the free report overview by clicking the button below.


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    Jeff Schmerker

    Written By Jeff Schmerker

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