Hydrogen Energy Storage Industry | Future Growth Prospects

The increased deployment of hydrogen energy storage in the utility, commercial, and residential sectors is driving the industry. The sector is predicted to grow due to high industrial demand for hydrogen in metal treatment, petroleum refining, and food processing. Potential opportunity for the market lies in increasing the commercialization of power-to-gas technology. In this technology, hydrogen can be converted back to electricity and used for powering the electric grid during peak hours.

Hydrogen energy storage is a process wherein the surplus of energy created by renewables during low energy demand periods is used to power electrolysis, a process in which an electrical current is passed through a chemical solution in order to separate hydrogen. Once hydrogen is created through electrolysis it can be used in stationary fuel cells, for power generation, to provide fuel for fuel cell vehicles, injected into natural gas pipelines to reduce their carbon intensity, or even stored as a compressed gas, cryogenic liquid or wide variety of loosely-bonded hydride compounds for later use. Hydrogen created through electrolysis is showing great promise as an economic fuel choice, with data from the International Energy Agency predicting that hydrogen generated from wind will be cheaper than natural gas by 2033.


The global hydrogen energy storage Industry size was exhibited at USD 15.98 billion in 2023 and is projected to hit around USD 25.05 billion by 2033, growing at a CAGR of 4.6% during the forecast period of 2024 to 2033.

Key Takeaways:

  • Asia Pacific region held the largest revenue share of over 38.0% in 2023.

  • The compression storage technology segment accounted for the largest revenue share of over 40.0% in 2023.

  • The solid segment held the largest revenue share of around 51.0% in 2023.

  • The industrial application segment held the largest revenue share of over 40.0% in 2023.


Drivers of Hydrogen Energy Storage Industry Growth

  1. Renewable Energy Integration: One of the primary drivers of the hydrogen energy storage Industry is the increasing integration of renewable energy sources like wind and solar power into the grid. These sources are inherently intermittent, and hydrogen storage offers a solution to store excess energy during peak production periods for use during times of low generation.

  2. Energy Transition Initiatives: Governments and industry players worldwide are investing in clean energy technologies to mitigate climate change and reduce greenhouse gas emissions. Hydrogen, particularly when produced using renewable energy sources through electrolysis, aligns with these objectives, driving investments in hydrogen energy storage infrastructure.

  3. Industrial Applications: Hydrogen is widely used in industrial processes such as refining, ammonia production, and metal processing. Utilizing hydrogen energy storage systems allows industries to manage energy demand fluctuations efficiently and enhance overall energy security.

  4. Transportation Sector: The transportation sector is undergoing a paradigm shift towards zero-emission vehicles. Hydrogen fuel cell vehicles (FCVs) present a viable alternative to conventional internal combustion engines, offering longer ranges and shorter refueling times. Hydrogen energy storage facilitates the scaling up of hydrogen refueling infrastructure to support the widespread adoption of FCVs.


Challenges and Barriers

Despite its potential, the widespread adoption of hydrogen energy storage faces several challenges:

  1. Cost: The cost of hydrogen production, storage, and distribution remains relatively high compared to conventional fossil fuels. While advancements in electrolysis and other hydrogen production technologies are driving costs down, further innovation and economies of scale are necessary to make hydrogen energy storage economically competitive.

  2. Infrastructure Development: Establishing a comprehensive hydrogen infrastructure, including production facilities, storage tanks, pipelines, and refueling stations, requires substantial investments. Building this infrastructure will take time and coordination among stakeholders, presenting a barrier to rapid Industry expansion.

  3. Technological Maturity: While hydrogen energy storage technologies have made significant strides, they are still relatively nascent compared to conventional energy storage solutions like lithium-ion batteries. Enhancements in hydrogen storage materials, system efficiency, and reliability are needed to accelerate Industry adoption.

  4. Regulatory Frameworks: The lack of consistent regulatory frameworks and incentives for hydrogen energy storage hinders Industry development. Governments play a crucial role in providing supportive policies, subsidies, and incentives to spur investment in hydrogen infrastructure and stimulate demand for hydrogen-based products and services.


Future Outlook

Despite the challenges, the future outlook for the hydrogen energy storage Industry is promising:

  1. Technological Advancements: Continued research and development efforts are driving technological innovations in hydrogen production, storage, and utilization. Advancements in electrolysis, hydrogen compression, and fuel cell technologies are expected to improve efficiency and reduce costs, making hydrogen energy storage more competitive.

  2. Policy Support: Governments worldwide are increasingly recognizing the role of hydrogen in achieving climate goals and promoting energy security. Policy measures such as carbon pricing, renewable energy mandates, and investment incentives for hydrogen infrastructure are expected to bolster Industry growth.

  3. Industry Collaboration: Collaboration among governments, industry players, research institutions, and other stakeholders is essential for advancing the hydrogen energy storage ecosystem. Public-private partnerships and international cooperation initiatives can facilitate knowledge sharing, resource mobilization, and technology transfer, driving innovation and Industry expansion.

  4. Industry Expansion: As economies of scale are achieved and production costs decline, hydrogen energy storage solutions are likely to become more widespread across various sectors. From grid-scale storage applications to transportation and industrial uses, hydrogen is poised to play a significant role in the global energy landscape.


Technology Insights

The compression storage technology segment accounted for the largest revenue share of over 40.0% in 2023. This can be attributed to the wide applications of compressed hydrogen in various sectors. Compressed hydrogen is utilized in on-site stationary power generation, hydrogen filling stations, and road transportation fuel cell vehicles. Furthermore, the compression technique is utilized to store hydrogen in cylinders for industrial applications in manufacturing and chemical industries.

Bulk industrial gas suppliers such as Linde, Air Liquide, and Air Products & Chemicals Inc. prefer liquefaction technology to deliver hydrogen in bulk to industrial end-users such as oil and gas and chemical industries. Liquefaction technology is used by industrial end-users who demand bulk hydrogen in their processes. Over the projection period, material-based storage technology segment is predicted to increase at a high rate. In comparison to other storage technologies, this technology includes hydride storage systems, liquid hydrogen carriers, and surface storage systems, all of which have a high volumetric storage density.

Physical State Insights

The solid segment held the largest revenue share of around 51.0% in 2023. Storage of hydrogen in solid form, i.e., stored in another material, is one of the emerging areas in the market. Methods for storing hydrogen in solid form include techniques involving absorption or adsorption mechanisms of hydrogen by a material.

Currently, storage of hydrogen in liquid form is being reserved for certain special applications, i.e., in high-tech areas such as space travel and for bulk storage applications at industrial levels. For example, tanks on the Ariane launcher, which are designed and manufactured by Air Liquide, contain 28 tons of liquid hydrogen, which provides fuel to the central engine.

Application Insights

The industrial application segment held the largest revenue share of over 40.0% in 2023. The use of hydrogen energy storage for residential applications is limited around the world. Countries such as Japan, Germany, France, and Belgium are strengthening their legislative frameworks, which are likely to catalyze the utilization of fuel cells in the residential applications for micro combined heat and power. For instance, Japan's ENE-FARM program has fueled the adoption of fuel cell-based systems for use as fuel cell micro-cogeneration in residential sector.

The commercial application segment includes hydrogen refueling stations and micro-CHP fuel cell-based installation for commercial applications. A total number of hydrogen refueling stations around the world has more than doubled in the last five years from 181 in 2014 to more than 540 as of 2020. Continuous growth in deployment is led by the European and Asian regions.

Some of the prominent players in the Hydrogen energy storage market include: Taiyo Nippon Sanso Corporation; Iwatani Corporation;Cummins Inc.; Nel ASA; Steelhead Composites Inc.; Air Products Inc.; Linde plc; Air Liquide; ITM Power; Nedstack Fuel Cell Technology BV; Engie; GKN Sinter Metals Engineering GmbH; PlugPower Inc.; Hygear.

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