Market & Technology Trends

Hydrogen Value Chain + The Impact of Connected Tech, Part Four: Securing Hydrogen Storage

ByMagnus Ulseth

December 14, 2022

In all three stages of the hydrogen value chain, there is a pressing need for digital information. In the final part of this four-part series, we’ll explore the next critical piece of the changing hydrogen value chain—storage—and the impact of connected technology across the industry.

As electricity is increasingly produced from wind and solar energy, it will be critical to balance the demand on the electricity grid, rather than regulate production– but balancing the supply and demand of renewable electricity, along with the congestion of the electricity grid, is becoming an increasing challenge in the energy transition. Thankfully, a key value proposition for hydrogen production lies in its power to balance renewable energy sources through energy storage.

Increasing Energy Storehouses

In addition to many other benefits, hydrogen can be stored for use at a later time, providing a revolutionary solution for the seasonal and intraday energy demand fluctuations that can’t be solved with renewable energy alone. “Hydrogen can provide three crucial balancing elements to the energy market: large-scale energy storage, a mechanism for the coupling of sectors (Power-to-X), and through transportation from centers of supply to centers of demand,” explains Magnus Ulseth, Director of LNG & Midstream Products at Quorum Software.

Currently, innovations required for making large-scale plants economically viable for hydrogen are underway, with research projects indicating that these investments are likely to become feasible in the coming years. “Renewable hydrogen could make investments in renewable energy sources more desirable, since the elements of storage and transportation allow the producers to keep producing when local supply outweighs demand, while normal consumption can be maintained even when supply is low,” continues Magnus Ulseth, Director of LNG & Midstream Products at Quorum Software.

Its long-term storage capabilities make hydrogen a great option for solving seasonal energy demand fluctuations. By acting as global balancing energy at critical times for the energy supply chain, hydrogen is predicted to be a game-changing energy carrier for multiple sectors, on both an industrial scale as well as the consumer market.

With Great Storage Comes Great Opportunity

When it comes to hydrogen storage, producers have several promising options. In the short term, pipelines used to transport hydrogen in gaseous form can be used to store hydrogen by using the linepack flexibility— in other words, the slack for the gas of the grid which can be used by temporarily increasing or decreasing the pressure, and thus the hydrogen content, of the pipelines. Substantial differences between supply and demand can be bridged for several hours.

In the long term, storage to cover seasonal demand can be achieved by storing gaseous hydrogen under large pressure in underground salt caverns. An example of this is the HyStock storage located in the North of The Netherlands which is currently being developed and scheduled to be operational in 2026. In Texas and the United Kingdom, salt caverns are already in use to store Hydrogen 19. Additionally, depleted gas fields are being considered for long-term hydrogen storage; however, only a limited number of experiments have been conducted storing hydrogen in porous reservoirs.

In addition to the operational benefits of storing hydrogen, the opportunities for profitability are clear. In an open hydrogen economy, storage can be used by both shippers and traders, and the storage capacity itself can be marketed as a premium product— but an economy of this complexity requires a robust and advanced IT infrastructure to support it. Storage facilities will be required to keep track of inventory positions, balances, and reserved capacity of the different owners, in addition to tracking the carbon footprint of the hydrogen in the storage. They'll also need to track how hydrogen is traded on an open market, and to which extent this is done in combination with outside documentation, such as the guarantee of origin certificates. The IT systems used by storage operators will need to have more accountability, compliance, transparency, and interconnectivity features than ever before.

The Power of Connected Data

Hydrogen may very well hold the key to a carbon-free future, and information systems are critical at every step along the hydrogen value chain – from production to application to potential storage. Leveraging connected technology to track KPIs can help to uncover opportunities, highlight potential problems, and pinpoint any inefficiencies related to the manufacturing process or delivery. While structured data management platforms ensure data quality and reliability across an organization, easy to understand dashboards and reports are able to offer deep operational insights and decision support. Similar to LNG, hydrogen producers will need a software system that connects people, workflows, and systems with decision-ready data.

“Decision-making for complex energy systems no longer needs to be based on gut feelings or decades of industry experience. By breaking down silos and connecting data and processes, IT solutions can provide ample decision support in a highly competitive business environment,” says Ulseth.

Our Energy Components software suite is a modular application that provides end-to-end support for all these business processes, including:

  • Production
  • Transportation
  • Storage

More than 50% of global LNG is managed in solutions provided by Quorum Software, and Energy Components is the market leader for hydrocarbon accounting and management in the upstream and midstream energy industry. The energy accounting and business processes around hydrogen, covering production, transport, storage, sales, revenue, and commercial management are very similar to those in the LNG and conventional natural gas sectors. Energy Components is the only software that can support truly integrated energy business operators in a future global hydrogen economy. As hydrogen reshapes energy value chains across the globe, there will be a need to derive value from the data being gathered throughout the process— and to transform data into actionable insights for key decision-makers.

Thanks for tuning into our four-part blog series on the hydrogen value chain! Ready to strengthen your upstream, midstream, and LNG operations with the industry’s most comprehensive hydrocarbon accounting and management solution? Check out our Energy Components product suite today.