As Europe accelerates its clean energy transition, one critical challenge remains unresolved: the lack of sufficient energy storage infrastructure to support the integration of renewables. The third Pitstop Meeting of the MED-GEM Network, held online on March 19, 2024, brought together experts to discuss the urgent need for strategic energy reserves. Frank Wouters, Director of the MED-GEM Network and Chairman at the MENA Hydrogen Alliance, delivered a key presentation on the pivotal role of storage solutions in ensuring energy security and grid stability.

Bridging the Storage Gap

Despite ambitious decarbonization goals, global energy systems remain heavily dependent on fossil fuels. Currently, electricity accounts for only 17% of total primary energy consumption, with the rest covered by fossil energy molecules. For this reason, molecular energy storage—consisting of oil, coal, and natural gas—still dominates, representing over 20% of all stored energy. While renewables such as wind and solar are being deployed at an unprecedented pace, the infrastructure required to store and distribute this energy efficiently remains vastly inadequate. Grid-scale electricity storage accounts for a mere 0.03% of total storage capacity, raising serious concerns about energy reliability and the ability to phase out fossil fuel reliance.

Strategic energy reserves have long played a fundamental role in reducing price shocks and geopolitical risks. The European Union mandates oil reserves equivalent to 90 days of consumption (around 1,000 TWh) and maintains significant gas reserves exceeding 1,000 TWh, with a required fill rate of 90% before winter. However, as Europe pivots away from fossil fuels, hydrogen is poised to play a key role in the energy transition—yet no strategic hydrogen reserve currently exists.

The Case for a European Hydrogen Reserve

Frank Wouters outlined a compelling case for the establishment of a European strategic hydrogen reserve. With the EU targeting a significant ramp-up of hydrogen production and consumption, a dedicated reserve would be instrumental in stabilizing the market and ensuring supply security. His proposal advocates for a reserve amounting to 25% of projected hydrogen needs, equivalent to approximately 1.7 million tonnes (or 2.7 million tonnes including market-balancing storage).

Unlocking the Hydrogen Economy

A well-structured hydrogen reserve system would yield multiple benefits:

• Investment Confidence: Developers of hydrogen projects currently struggle find sufficient demand. A strategic reserve would act as a guaranteed off-take mechanism, de-risking investments and accelerating project implementation.
• Infrastructure Development: Hydrogen transport and storage require significant infrastructure, including salt caverns and a hydrogen network. A dedicated reserve would create a clear demand signal, spurring infrastructure investments.
• Geopolitical Resilience: With growing concerns over energy security, particularly in light of recent geopolitical disruptions, hydrogen reserves would provide a buffer against supply chain vulnerabilities and market shocks.

Implementation: Regulatory and Financial Considerations

For such a reserve to become a reality, a structured regulatory and financial framework is essential. Hydrogen storage should be integrated into the business model of Transmission System Operators (TSOs), akin to the management of gas infrastructure. A joint financing model—combining EU Member State contributions with European Commission support—could be structured through aggregated hydrogen purchasing programs. Strategic storage sites should be selected based on existing underground gas storage infrastructure, leveraging salt caverns and other geological formations suitable for long-term hydrogen containment.

Conclusion: A Critical Next Step for the EU

As Europe charts its course toward carbon neutrality, strategic hydrogen reserves must become a cornerstone of energy policy. Without a robust storage strategy, the continent risks falling short of its climate ambitions, facing continued reliance on fossil fuels to balance intermittent renewables. The establishment of a hydrogen reserve would not only provide a safety net against energy crises but also accelerate the development of a fully-fledged hydrogen economy, reinforcing Europe’s leadership in the global energy transition.
⬇️ Download the keynote