4 Underground hydrogen storage cost

Underground storage is the most inexpensive mean of storing large quantities of gaseous hydrogen. In fact, underground hydrogen gas storage is estimated about two orders of magnitude cheaper than tank storage considering the cost per Nm3 of stored hydrogen.

Capital costs vary depending on whether there is a suitable natural cavern or rock formation, or whether a cavern must be mined. Using abandoned natural gas wells is the cheapest alternative, followed by solution salt mining and hard rock mining. Prices are set from 5 $/kg to 40 $/kg (2007 year basis, IEA GHG Report 2007-13).

One additional expense for underground storage is the value of the cushion gas that remains when the storage system is at the end of its discharge cycle. As hydrogen is relatively expensive commodity, the cost of the cushion gas is a very significant part of the capital charges for such large storage reservoirs. However, as the cavern has a cycling operation, the initial cushion gas cost is amortized.

The operating costs for underground storage are limited to the energy and maintenance costs related to compressing the gas into underground storage and possibly boosting the pressure coming back out.