A proposed storage project beneath the UK’s largest former naval base in Dorset could play a strategic role for the UK’s hydrogen economy and its energy security, according to analysts.

Proposals for the Dorset Hydrogen Storage Facility, which would use underground salt caverns, have received a letter of support (LOS) from SGN, the operator of the planned H2 Connect hydrogen transmission line, which would connect the storage site with the Solent Cluster in southern England and the wider UK hydrogen grid.

Independent exploration and production company UK Oil & Gas, which is developing the project, said the LOS was key to securing revenue support from the government, which has up to now required projects to identify potential storage users and to demonstrate projects would be developed in tandem with pipeline connections. The company said it hopes to receive further LOS in due course and that it is looking to secure revenue support under a planned allocation round due to be held in Q3 2024.

“The development of salt cavern storage is strategically very important for energy security in the UK” Kimpton, DNV

The UK’s new Labour government has stressed its commitment to investment in the hydrogen economy, although it has yet to set out detailed plans to support storage and other infrastructure.

Other developers are also working on plans to develop hydrogen storage at scale in the UK. Centrica Storage has ambitions to convert the Rough reservoir in the Southern North Sea—currently the UK’s biggest natural gas storage facility—into the world’s largest long-duration hydrogen storage facility. It recently awarded a FEED contract for the conversion project to engineering consultancy Wood.

Inter-seasonal

The Dorset project, which would be located beneath Portland Harbour on England’s southern coast, has the potential to store 3TWh of hydrogen in underground salt caverns, providing “inter-seasonal capacity, security of supply and pipeline stability for our proposed development of hydrogen pipelines in the region”, the developer said.

“Underground hydrogen storage like the project announced in Dorset is essential for a hydrogen economy and therefore for the UK’s hydrogen strategy,” Anise Ganbold, head of hydrogen research at consultancy Aurora Energy Research, told Hydrogen Economist.

“This is due to the load-shifting feature of storage: if solar and wind power are used to produce green hydrogen, the production profile would be intermittent and follow the profile of the sun and wind,” she said. However, many potential hydrogen offtakers, such as glass manufacturers, would need a steady supply. Underground storage would be able to bridge this gap between supply profile and offtake profile, she added.

The levelised cost of storing hydrogen in a salt cavern is around $1/kg, while the alternative available option today, using steel tanks, is around four times more expensive, according to Aurora.

“The UK’s hydrogen strategy recognises the importance of storage and sets a timeline for progress to be made,” Ganbold said. “However, there is not yet much detail on how hydrogen storage will be built and operated, and importantly who would bear the cost.”

Sarah Kimpton, UK and Ireland low-carbon hydrogen lead at risk management firm DNV, pointed to the Dorset project’s location as a major plus.

“The proposed development in Portland is interesting and exciting as it is close to the Southampton industrial cluster but, unlike Cheshire and East Yorkshire, this area has not been used previously for gas storage,” she told Hydrogen Economist.

3TWh – Potential storage capacity

“The development of salt cavern storage is strategically very important for energy security in the UK during and after the energy transition,” she said. “As we rely more and more on renewable generation there will always be a mismatch between energy production and energy demand.”

At the moment, constraint payments are made to generators who cannot get their electricity onto the grid due to oversupply and, at other times, there is not enough renewable power to satisfy demand.

“Today the gap is bridged by bringing on natural gas generation, but this needs to change as we approach net zero,” Kimpton said. “Batteries can provide short-term energy storage, but for those winter periods of a couple of weeks or more when there is no wind and the temperatures are below zero, hydrogen storage at scale will be essential. The hydrogen can then be used directly or supplied to a power station to produce electricity.” 

Long lead times

However, salt caverns can take 5–10 years to bring online, as they are developed by carefully injecting water into the salt layer to dissolve it, forming an underground space that it gas tight. 

This presents technical challenges including disposing of the brine solution produced during the formation of the caverns, and the occurrence of unwanted microbiological and geochemical activity producing small amounts of contaminants that need to be removed before the hydrogen can be used, Kimpton said.

For UK Oil & Gas, this project is part of a wider strategic shift towards hydrogen, amid an increasingly challenging environment for its legacy fossil fuel projects.

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Author: Beatrice Bedeschi