Industrial Hydrogen Energy Storage Market Trends

Growth Drivers

• Initiatives for global decarbonization: Increasing pressure to minimize carbon footprint has impelled industries to adopt alternative energy sources. Hydrogen has proven to be the most suitable option for large-scale power consumers with less carbon emission. According to an article published by IRENA, in 2022, hydrogen can be used to decarbonize cost-effectively in heavy manufacturing industry, long-haul transport, and seasonal energy storage. It further states, that these energy sources can fulfill 10% of the mitigation requirement to achieve the IRENA 1.5°C Scenario and 12% of final energy demand. These energy storage systems allow industries to align with the regulatory frameworks on environmental safety.
  
  Governments are also implementing policies to support hydrogen production and usage through subsidies, tax incentives, and research funding. In October 2023, the Federal allocated USD 7 billion in funding to the U.S. Department of Energy for the regional Clean Hydrogen Hubs program. The number of low-emission hydrogen production has also increased. Subsequently influencing the industrial hydrogen energy storage market to grow.
• Development in manufacturing process: Innovations in hydrogen production and management are fueling the supply of green energy for industries. Improved efficiency and reduced costs are making hydrogen a more viable energy solution. New techniques such as water electrolysis are being introduced to acquire the optimum amount of hydrogen. According to an article published by the Royal Society of Chemistry, in September 2023, hydrogen production by splitting water using renewable energy can obtain up to 95% pure hydrogen.
  
  Government and private authorities are launching bigger projects to introduce more enhanced techniques for better production. For instance, in January 2024, NTPC Green Energy Limited signed a M0U with Maharashtra government. This MoU was issued to develop the capacity of annual green hydrogen, including Pump Hydro and RE projects.Further increasing the amount of hydrogen production each year. According to a report published by the International Energy Agency, in July 2023, the expansion of projects has the potential to produce a 50% greater amount of low-emission hydrogen.

Challenges

• Expensive hydrogen production: The cost of green hydrogen production is costlier than fossil fuels, making it less competitive without subsidies or funding. As a result, most of the hydrogen is produced from natural gas, which is carbon-intensive and hard to comply with tightened regulations. Further, industries are bound to rethink before investing in hydrogen energy storage implementation. The higher cost of initial funding for electrolyzer technology contributes to non-negotiable expenses.
• Safety concerns: Region-specific regulations can be stringent for investment infrastructure of hydrogen energy storage. From production to end use, safety during transportation can raise logistical challenges. Further, restricts the supply chain for hydrogen in the industrial hydrogen energy storage market. Public skepticism about the viability of using hydrogen as an energy source can prevent consumers from integrating. The evolving storage solutions such as liquid hydrogen, compressed hydrogen, and metal hydrides have limitations, which impact its scalability.