HYDROGEN ENERGY STORAGE MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)
The global hydrogen energy storage market is estimated to be valued at USD 16.70 Bn in 2024 and is expected to reach USD 22.89 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 4.6% from 2024 to 2031.
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The hydrogen energy storage market is witnessing positive trends owing to the rising demand for sustainable energy and the need to decarbonize energy intensive industries. Many countries such as India, China and other are supporting the development of hydrogen infrastructure and technologies through public funding and policies to meet their decarbonization goals. Both utilities scale projects as well as behind-the-meter distributed hydrogen energy storage systems are gaining traction. The cost of renewable hydrogen production is declining steadily making it competitive with fossil fuel alternatives. Investments in hydrogen production using electrolysis and fuel cell technologies are increasing globally which is positively impacting the market growth.
Increasing demand for clean energy sources
There is a growing global consensus that traditional fossil fuels like coal and oil contribute significantly to climate change due to their greenhouse gas emissions. At the same time, energy demand continues rising with growing populations and economies, creating a challenge to satisfy this demand without further damaging the environment. This need has put clean and renewable energy sources in the spotlight like never before.
While renewable sources like solar and wind power have proliferated in recent years, one issue remains their intermittent nature which makes them unreliable for base load power requirements or energy storage on a large scale. This is driving significant interest in hydrogen as a clean energy carrier that can store and deliver energy from renewable generation during periods when the sun is not shining or the wind is not blowing. Several nations and organizations such as Africa and other nations have recognized hydrogen's potential and are studying or supporting its development through policy and funding support. Germany, Japan, and South Korea are investing heavily into developing hydrogen technologies and building associated infrastructure. The European Union views hydrogen as a key part of its plans for climate neutrality by 2050. Even oil producing nations have set ambitious targets for hydrogen, recognizing that the long-term prospects of fossil fuels may be limited.
At the same time, the private sector’s interest in clean hydrogen has grown considerably as major industrial and energy companies invest in related research, projects, and partnerships. Automakers are exploring hybrid and fuel cell vehicles as alternatives to battery-powered electric vehicles over longer ranges. Utilities see hydrogen as integral to longer term plans for high renewable grid integration. Many believe that only with large scale storage options like hydrogen can clean energy achieve its full potential. As clean energy policies strengthen around the world and technologies progress to utilize hydrogen across multiple sectors, global demand can be expected to rise substantially in the coming decades. This growing demand will support the wider development and buildout of the hydrogen economy.
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Transition from Non-Renewable to Renewable Energy Sources
Energy systems around the world have long relied heavily on fossil fuels, particularly coal, oil and natural gas. While abundant and established options, these non-renewable sources contribute significantly to greenhouse gas emissions driving climate change. At the same time, a transition to renewable sources of energy is urgently needed but faces challenges related to how to effectively store and transport energy from these intermittent generators. This is driving interest in hydrogen as an integral part of future energy systems.
Most scenarios for deep decarbonization include hydrogen playing an important role, whether for carbon-intensive industries, transportation or balancing renewables. Developing ‘clean hydrogen’ produced from renewable electricity could significantly curb emissions if combined with fuel cells or replaced natural gas. While hydrogen production is currently fossil-based, it offers a pathway to transition established infrastructure to renewable alternatives. Projects combining offshore wind with hydrogen or using solar and wind to power electrolyzers show hydrogen’s potential to transfer renewable energy across sectors and seasons. Recent policy actions from the European Union, Japan, and others signal their view that hydrogen enables viable renewable energy economies.
The public sentiment is also propelling this transition as climate concerns push many nations to reform energy policies and decarbonize more rapidly. Citizens increasingly demand lower emissions and support clean technologies. Younger demographics especially note climate impacts and want greener solutions. As technologies progress to integrate high levels of wind and solar, these intermittent sources will require cost-effective long-term storage like hydrogen to reliably balance supply and demand. This transition will drive steady investment and innovation in large-scale renewable hydrogen projects. Established gas pipeline operators similarly see hydrogen blending or conversion as integral to sustaining their infrastructure role long-term. As more governments, companies and publics commit to clean energy and view hydrogen as crucial, global markets will respond accordingly.
Key Takeaways of Analyst:
The global hydrogen energy storage market has strong growth potential driven by rising demand for cleaner sources of energy and sustainable technologies. Electrolysis and fuel cell technologies that enable production and use of hydrogen as an energy carrier are advancing rapidly.
Cost reductions from technological improvements and economies of scale will boost the adoption of hydrogen solutions in the coming years. Renewable energy integration can benefit significantly from hydrogen storage as it allows energy to be stored on a large scale and for longer durations to maintain grid stability. Transportation sector is expanding usage of fuel cell vehicles and ships are increasingly experimenting with hydrogen as a marine fuel. North America currently dominates global capacity additions and investment in hydrogen technologies due to the strong support from countries. Asia Pacific is also ramping up efforts to develop a hydrogen economy to meet decarbonization targets.
While high initial costs remain a challenge, declining prices of electrolyzer and fuel cells will support applications across industries. Safety standards for the transportation and storage of hydrogen need to progress in order to address public concerns. However, wider collaboration across stakeholders can help optimize the hydrogen value chain and realize its environmental and economic benefits at scale.
Market Challenge - High cost of hydrogen production and storage
The major challenge faced by the global hydrogen energy storage market is the high cost associated with hydrogen production and storage. Producing hydrogen through electrolysis of water requires large amounts of electricity. Currently, most of the electricity used for hydrogen production comes from fossil fuels, which increases the overall costs. Storing hydrogen safely and efficiently is also quite challenging and expensive due to its low density and volatile nature. Transporting hydrogen demands specialized tanks or trailers with advanced insulation, further escalating costs. These infrastructure and technology challenges have prevented hydrogen from widespread commercialization. Additionally, the lack of economies of scale in the market has resulted in the high capital costs of production plants. Overcoming the cost barriers through improved and innovative electrolyzer technologies, storage solutions and large-scale projects will be critical for the market to realize its full potential.
Market Opportunity - Growth in renewable energy sector
The growing focus on developing renewable sources of energy like solar and wind globally presents a massive opportunity for the hydrogen energy storage market. As the integration of variable renewable energy increases, long-term and large-scale storage solutions will be crucial to ensure grid reliability and stabilize power supply. Hydrogen energy storage has strong potential to facilitate the large-scale adoption of renewable energy by enabling seasonally-based energy storage. The opportunity for hydrogen lies in utilizing excess renewable electricity generated during periods of low demand to produce hydrogen through electrolysis. This hydrogen can be stored and transformed back into electricity during high demand periods through fuel cells. Leveraging the synergies between renewable energy growth and hydrogen-based energy storage could significantly boost the prospects of the hydrogen economy worldwide in the coming years.
Additionally, growing investment in renewable energy sector is expected to drive the market. For instance, according to data by International Energy Agency, in 2020, global investment in solar energy reached US$ 148.6 billion, demonstrating the sector's attractiveness to investors. The cost of solar PV modules has decreased by over 90% since 2010, making solar energy more accessible and affordable for consumers and businesses.
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Insights by technology: Compact size and ease of transportation
In terms of technology, compressed hydrogen storage is expected to contribute 38.7% share of the market in 2024. Compressed hydrogen storage dominates the hydrogen storage technology segment due to its advantages over other technologies. Hydrogen can be compressed up to 10,000 psi, allowing much more hydrogen to be stored in a given volume compared to liquefaction. This compact size makes compressed storage well-suited for mobile and transportation applications. Vehicles like cars, buses and trucks have very limited space available for an energy storage system. Compressed hydrogen storage allows them to drive further on less storage volume. The compressed tanks can also be rapidly filled to capacity, facilitating faster refueling times similar to gas stations. This ease of operation and refueling accessibility makes compressed storage the technology of choice for hydrogen fuel cell vehicles and other mobile machinery.
Moreover, compressed hydrogen cylinders are relatively lightweight and very durable containers. They maintain hydrogen at ambient temperature without need for cryogenic insulation. This avoids challenges in transporting cryogenically stored liquid hydrogen over long distances. The low weight of compressed tanks also helps improve the driving range of fuel cell vehicles. Overall transportation costs are lower for compressed hydrogen versus liquid form. Industries relying on hydrogen fuel in remote locations far from gas pipelines also prefer compressed storage for its simple logistical handling. With continuous technology improvements, compressed hydrogen tank pressures are rising while tank sizes are shrinking further. This will help compressed storage maintain its edge over other technologies.
Insights by application: Cleaner energy transition goals
In terms of application, power generation is expected to contribute 33.6% of the market share in 2024. The power generation sector is the single largest end user of hydrogen globally, growing power generation sector is expected to drive the segment growth. For instance, according to data by the Ministry of Power released in 2022, the electricity generation target for 2023-24 is 1,750 billion units (BU), which is a 7.2% increase from the previous year's generation of 1,624.158 BU. Many countries and regions India, China and other have ambitious targets to reduce carbon emissions from electricity grids and transition to low-carbon energy sources. Hydrogen produced from renewable power through electrolysis is seen as an important enabler for long-term energy storage and seasonal capacity firming. It allows excess intermittent renewable power like solar and wind to be stored for later grid balancing and power generation. Hydrogen can be burned in gas turbines for power production with only water emissions. Some existing natural gas power plants are being retrofitted for dual firing with hydrogen blends as well. Large-scale hydrogen production is also attracting significant investments to deploy new wind and solar capacity coupled with electrolyzers. Industry experts believe hydrogen will play a key flexible role in balancing future power systems with very high shares of variable renewables. Meanwhile, pilot projects are evaluating hydrogen's viability for powering residential micro-grids and off-grid stations as well. As the clean energy transition progresses globally, power generation is expected to drive the largest demand for hydrogen as a zero-carbon fuel and long-term energy storage medium.
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North America has established itself as the dominant regional market for hydrogen energy storage. The region is expected to hold 35.6% of the market share in 2024. The large presence of major fuel cell and hydrogen technology developers in countries like the U.S. has enabled significant advancements in the core hydrogen infrastructure. Government initiatives promoting clean energy coupled with high industrial investments have helped develop a robust supply chain and manufacturing base for hydrogen energy related products across applications. The established leadership in sectors like transportation also augments the regional hydrogen economy.
However, Asia Pacific is emerging as the fastest growing regional market. Rapid economic expansion and growing energy demands make it an attractive market for new energy technologies. Countries like Japan, South Korea, and China are aggressively investing in hydrogen infrastructure to reduce fossil fuel import dependence and meet sustainability goals. As global leaders in renewable energy adoption, focus on hydrogen provides a viable clean energy storage solution for these markets. Additionally, the presence of leading automobile manufacturers is directing efforts towards developing the global hydrogen energy storage market
Both industrial gas manufacturers as well as technology developers have increased focus on Asia Pacific region regions. This has kept supply availability and product pricing competitive. Manufacturing facilities catering to regional demands are being expanded. Collaborations between industry and research organizations further enhance technological progress. While transportation currently dominates hydrogen consumption, deployment across other applications like materials handling and energy storage are expected to pick up momentum as costs reduce with increasing production volumes and technological maturity. Rising focus on developing international hydrogen trade will also benefit in meeting the needs of these rapidly growing markets.
Hydrogen Energy Storage Market Report Coverage
| Report Coverage | Details | ||
|---|---|---|---|
| Base Year: | 2023 | Market Size in 2024: | US$ 16.70 Bn |
| Historical Data for: | 2019 To 2023 | Forecast Period: | 2024 To 2031 |
| Forecast Period 2024 to 2031 CAGR: | 4.6% | 2031 Value Projection: | US$ 22.89 Bn |
| Geographies covered: |
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| Segments covered: |
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| Companies covered: |
ITM Power, Linde plc, Air Liquide, Nel Hydrogen, Siemens Energy, Hydrogenics (Cummins), H2 Storage, First Hydrogen, Lhyfe, HySiLabs, Engie, BP, Shell, ExxonMobil, TotalEnergies, Orsted, Messer Group, Ceres Media, Hyzon Motors, and Plug Power |
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Definition: The global hydrogen energy storage market involves the production, storage, and distribution of hydrogen as an energy storage medium on a global scale. It utilizes hydrogen's ability to be produced from multiple energy sources, stored for later use and converted back to electricity through fuel cells. As more renewable and clean energy sources like solar and wind come online worldwide, the global hydrogen energy storage market provides an efficient way to store intermittent renewable energy for stationary and mobile application.
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About Author
Sakshi Suryawanshi is a Research Consultant with 6 years of extensive experience in market research and consulting. She is proficient in market estimation, competitive analysis, and patent analysis. Sakshi excels in identifying market trends and evaluating competitive landscapes to provide actionable insights that drive strategic decision-making. Her expertise helps businesses navigate complex market dynamics and achieve their objectives effectively.
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