The impact of hydrogen underground storage on export dynamics and system resilience: A GIS-based integration of salt caverns into PyPSA-Earth
Abstract
Growing European hydrogen demand and projects like the SoutH2 Corridor highlight the need for large-scale storage to ensure supply security and competitive pricing. Without storage, producers face increased market dependency, as electrolyzers require continuous operation to remain economically viable. At the same time, storage offers opportunities to strengthen domestic value chains by securing hydrogen supply for local industries. To assess the system-level impact of underground hydrogen storage (UHS) and its implications for hydrogen partnerships, we integrate GIS-based salt cavern potentials into PyPSA-Earth and apply the framework to Tunisia. Salt caverns are currently largely considered the most economical option for large-scale hydrogen storage, offering operational flexibility. Underground storage is represented as an endogenously optimised, regionally constrained option, enabling a direct comparison between scenarios with and without geological storage under identical demand, technology, and policy assumptions. Our results show that UHS enables seasonal balancing at multi-terawatt-hour scale, reshaping hydrogen system design. Storage availability substitutes most aboveground hydrogen tank capacity, improves electrolyser utilisation, and reduces levelised hydrogen production costs by approximately 0.10 € kg−1. Moreover, it decouples hydrogen production from short-term electricity variability and export demand, enhancing supply stability and export competitiveness. Beyond the Tunisian case, the findings underscore the strategic role of geological storage in international hydrogen trade. By increasing resilience and reducing cost volatility, UHS strengthens the position of exporting regions and supports more balanced and sustainable hydrogen partnerships.
