Global investment giant Patrizia, alongside its wholly managed operating company, Storag Etzel, has signed option lease agreements with Dutch energy infrastructure company Gasunie for the development of hydrogen storage caverns in the caverns facility in Etzel in Lower Saxony.
According to the agreement, Storag Etzel, which has been managing large-scale oil and gas storage facilities in underground caverns in Lower Saxony for over 50 years, will develop hydrogen storage caverns.
The hydrogen storage pilot project H2Cast Etzel conducted by Storag Etzel, Gasunie and other partners since 2022/2023 should prove the feasibility of hydrogen storage in Etzel’s underground caverns.
According to the EU, the potential for hydrogen for the region's future carbon-neutral energy consumption is significant. Renewable energies could supply a substantial part of the European energy mix in 2050, of which hydrogen could account for up to 20%, notably 20-50% of energy demand in transport and 5-20% in industry.
Industrial-scale hydrogen storage is a key prerequisite to compensate for the fluctuations in green energy generation via solar and wind and provide a stable energy supply for our power grids.
Germany’s future power plant strategy to serve natural gas power plants that will be H2-ready and converted to hydrogen in the future will generate further hydrogen storage demand, which the cavern field in the Etzel salt dome can supply.
The connection of the Etzel storage facility is also part of the planned hydrogen pipeline grid called Kernnetz (core hydrogen grid) to mee the future hydrogen demand across Germany.
'The H2Cast Etzel pilot project as this new agreement with Gasunie are key to prove that our caverns field is “H2-ready” and can play an important role in securing constant energy supply for Germany and across Europe,' said Heiko Süß, head of Patrizia fund management Frankfurt.
'Our common goal is to demonstrate that we can manage a safe transition from fossil to renewable energy in Germany with the cavern field in Etzel being an important part of a future hydrogen energy economy to meet the increasing energy needs of a carbon-free society and economy.'
Scope of hydrogen storage pilot project
The H2Cast Etzel pilot project comprises the conversion of two caverns into hydrogen storage caverns, the construction of an above-ground facility and a subsequent test and research phase to be completed by end of 2026.
The project is funded by the German Federal government and the state government of Lower Saxony with a low double-digit million Euro investment covering more than one third of the total test pilot costs.
The goal of the pilot test is to prove the feasibility of high-volume hydrogen storage in underground caverns with a storage volume on an industrial scale.
The test will be conducted under real conditions including the injection and withdrawal of hydrogen in a multicyclic operation mode, the purification of hydrogen gas as well as the proof of integrity of the storage facility.
Patrizia and Storag Etzel as an operating partner have been successfully managing large-scale oil and gas storage facilities in underground caverns for over 50 years. The salt dome encompasses 75 caverns in operation which currently store 3.9 billion m3 of natural gas and can store an additional 10 million m3 of crude oil.
Patrizia launched two dedicated cavern funds in 2008 and 2013 respectively. The prospect of transitioning the cavern field in Etzel to a full hydrogen storage facility by 2050 underlines Patrizia’s commitment to investing in the energy transition and net-zero economies.
