Hydrogen Energy Storage Market is Expanding Rapidly

Hydrogen Energy Storage Market Insight

The global hydrogen energy storage market size was reached at USD 17.88 billion in 2024 and is expected to be worth around USD 35.55 billion by 2034, exhibiting at a compound annual growth rate (CAGR) of 7.19% over the forecast period 2025 to 2034.

Hydrogen energy storage is expanding quickly with the demand for efficient and sustainable energy increasing. Solar and wind power are becoming increasingly popular sources of renewable energy, and hydrogen offers a means to store surplus energy for future use. The technology provides a mechanism to convert excess renewable energy into hydrogen gas, which can be stored and utilized to produce electricity when required. Improvements in the technology of electrolysers are bringing down the costs and making production more efficient for hydrogen. Incentives, along with investment by the government, are boosting the demand for this energy storage option further. Hydrogen storage energy is stepping up to the plate in changing over to a cleaner, better energy system.

Hydrogen Energy Storage Market Latest Investments

• The UK government has outlined investments in the hydrogen sector, including the Net Zero Hydrogen Fund, which provides up to £240 million in support, and £21.7 billion of funding over 25 years to launch the UK's carbon capture, usage, and storage industry. These initiatives are part of a broader strategy to encourage investment in the decarbonization of industry.
• Germany's network regulator has proposed a fixed annual fee for users of the country's future core hydrogen network, aiming to cover initial infrastructure costs while remaining attractive to users. The hydrogen network, planned for completion in 2037, will span 9,700 kilometers and cost approximately 20 billion euros, with 60% utilizing existing gas pipelines.
• VNG, an eastern German gas company primarily owned by utility EnBW, announced plans to initiate test operations for a 30-megawatt (MW) electrolysis plant in the third quarter of 2025. Located in Bad Lauchstädt, Saxony-Anhalt, the plant will produce green hydrogen using renewable electricity from local wind turbines. The hydrogen will be supplied to the nearby Leuna chemicals and oil park, with TotalEnergies as the anchor customer. The facility is expected to produce 2,700 tonnes of green hydrogen annually, contributing to cleaner fuel solutions by utilizing renewable resources and emitting only water and oxygen as byproducts.

Hydrogen Energy Storage Market Important Factors

Increase in the Integration of Renewable Energy

The integration of hydrogen energy storage with renewable power is gaining momentum as solar and wind generation is rising. Hydrogen enables efficient storage of surplus renewable energy and use in low-production times, thereby balancing demand and supply. Germany installed nearly 600,000 new stationary battery storage systems in 2024 with capacity increasing 50% to 19 GWh. Domestic storage rules with 0.0018 billion units (15.4 GWh), but commercial storage increased 26% to 38,000 units (1.4 GWh). Utility-scale storage doubled with 100 new facilities (0.8 GWh). Reforms and falling battery prices are driving growth, but administrative innovation needs to continue. Use of hydrogen storage would add at the leading edge of international decarbonization and push renewables even further. 

Growth of Public Investments

The European Union introduced a major funding scheme in 2023 to accelerate hydrogen production and storage under its Green Deal. Global investment in hydrogen schemes has nearly doubled since May 2022, to USD 680 billion as of May 2024, with North America alone having USD 96 billion. While North America is projected to produce a third of the globe's hydrogen by 2030, the majority will be derived from natural gas, and green hydrogen production leadership comes from China. Ambiguity regarding U.S. regulation and incentives, and specifically the 45V tax credit, has halted renewable hydrogen projects, and fossil hydrogen enjoys support through 45Q tax credits. That Europe too experiences the same policy issues puts greater emphasis on unified global policy. These investments will also contribute to the growth of hydrogen storage technologies, driving the market growth.

Technological Advances in Hydrogen Production

Growing research and development of more efficient and affordable hydrogen production technologies are driving the expansion of hydrogen energy storage. Technological innovation, such as improved electrode materials, durable membranes, modular designs, dynamic operation on renewable energy, and artificial intelligence-based control systems, are reducing the cost of green hydrogen and making it more viable for widescale deployment. The Hydrogen Council 2023 report refers to over 500 Gigascale hydrogen projects with an investment of USD 500 billion, reducing costs even further. The projects are making green hydrogen a low-cost energy leader in the coming years. The cost of hydrogen production will be much lower, making it feasible for mass adoption of hydrogen storage in industry and household markets. It will be very important in realizing clean energy ambitions.

However, Expensive initial investment costs May Restrain the Market’s growth

Hydrogen storage technology involves huge initial capital expenditure, and adoption would be difficult for smaller players and emerging economies. Most hydrogen initiatives are being put on hold or canceled as early enthusiasm is faced with reality. For example, a green hydrogen export agreement between Atlantic Canada and Germany was pushed back because of supply-demand mismatches and inflation. Fortescue Ltd. also put on hold a green hydrogen project in British Columbia because of unfavorable power prices. Experts are still skeptical of the cost-saving nature of hydrogen and its usage in various applications. Despite such constraints, the sector will also face cost constraints. Economies of scale may ultimately reduce cost over the long run, with hydrogen storage being more viable.

Hydrogen Energy Storage Market Scope

Hydrogen Energy Storage Market Regional Insight

North America is Expected to Grow at the Fastest Rate During the Forecast Period

North America is one of the dominant players in the hydrogen energy storage industry because of high government investment and efforts toward clean energy adoption. The United States is a leading country with initiatives like the Hydrogen Hub program, aimed at establishing hydrogen infrastructure. Canada is also contributing through its initiatives towards the production of hydrogen from renewable energy resources and its aggressive plans for hydrogen integration. Geographical proximity of Mexico to the U.S. market enhances its role as a key country for cross-border hydrogen infrastructure development. Favorable R&D and rising hydrogen fueling stations are the key drivers to drive market growth in this region.

Asia-Pacific Dominated the Hydrogen Energy Storage Market in 2024

Asia-Pacific is amongst the fastest-changing hydrogen energy storage markets, and there are notable advancements in Japan, South Korea, and China. Japan is a world leader in hydrogen technology, and their interest lies in hydrogen fuel cells for industry and transport. South Korea has vowed to be a hydrogen society with large investments made in the manufacturing of hydrogen as well as infrastructure. China is a leading adopter of electric vehicles and a major producer of hydrogen, and its demand for hydrogen storage systems is being driven. Its urbanization and industrialization at a fast pace are turning it into a popular market for hydrogen solutions in energy storage and transportation industries.

Hydrogen Energy Storage Market Segmental Insight

By technology, the compression segment led the market in 2024

Compression: Hydrogen compression is one of the technological techniques employed for the high-pressure storage of hydrogen gas. The process requires the pressure of hydrogen gas to be raised so that its volume is reduced, making it easy to store and transport. Hydrogen filling stations and sites where high-pressure storage is required have compressors. Due to advances in compressor technology and material, the process becomes increasingly viable for commercial-scale hydrogen storage. It is used at large scale presently due to its ease of design and historic performance in industrial processes.

By physical state, the solid segment dominates the market

Solid-state hydrogen storage is one form of storage in which hydrogen is physically or chemically soaked up into solid substances such as carbon-based material or metal hydrides. Such storage accommodates high energy density and is run on comparatively low pressure. Solid-state storage systems are generally safer than the high-pressure gas storage system since it is free from the hazards provided by gaseous hydrogen. These systems are in the process of being developed for mass use but are viewed as a viable alternative for the transportation industry and mobile applications.

By end user, the residential segment dominates the market

Residential uses of hydrogen energy storage are centered primarily on providing energy solutions for homes, particularly for heating, electricity generation, and as a backup system. Hydrogen fuel cells are used to generate heat and electricity for homes, a clean, efficient, and dependable alternative to traditional energy suppliers. Residential application will increase once hydrogen infrastructure starts to emerge, particularly in the case of a need for stability or independence on the grid in a region. The residential market also gains from the growing interest in renewable energy sources, where hydrogen storage can supplement solar or wind power systems.

By application, the stationary power segment led the market in 2024

Stationary applications of hydrogen energy include installing hydrogen energy storage systems to power stationary energy stations such as power plants, industrial parks, and skyscrapers. Hydrogen fuel cells are similarly applied in providing backup power, grid resilience, or as a power substitute for off-grid locations. Hydrogen is stored in the form of gas, liquid, or solid depending on the final application and requirement. The increased generation of green power from solar and wind energy contributes to the demand for hydrogen as an on-demand, clean energy source.

Hydrogen Energy Storage Market Major Breakthroughs

• Air Liquide is committing more than USD 1.08 billion to two large-scale European electrolyzer ventures for the production of renewable hydrogen. The 200MW ELYgator project in Rotterdam will feed TotalEnergies and others with offshore wind power. A 250MW Zeeland electrolyzer, a joint venture with TotalEnergies, will green their refinery operations. Together, the projects will produce a maximum of 53,000 tons of hydrogen annually and cut 500,000 tonnes of CO2 emissions annually. Air Liquide will use Siemens Energy technology in the electrolyzers. The initiatives support European decarbonization efforts and align with Air Liquide's 2050 carbon neutrality ambition and TotalEnergies' 2030 refinery decarbonization plan.
• ITM Power and Vitol have formed a 50/50 joint venture to concentrate on hydrogen refueling, with Vitol investing up to USD 0.032 billion, which will be matched by ITM Power. The venture will turn ITM Power's subsidiary, Motive, into a standalone business for hydrogen refueling stations, which will hold all UK public hydrogen refueling stations constructed by ITM Power. ITM Power will be Motive's go-to supplier for up to 240 MW of electrolysis hardware, and Vitol will supply the green power required for the new network. The collaboration is designed to increase hydrogen production, distribution, and demand, with a focus on heavy-duty vehicles and 4 MW refueling stations. This partnership represents a major milestone in the development of the hydrogen infrastructure in the UK.
• Cummins Inc. has acquired First Mode's assets, such as hybrid mining and rail product lines, and their IP portfolio of hydrogen and battery powertrain solutions. Through this acquisition, Cummins now owns commercially available retrofit hybrid systems for mining equipment, lowering costs and driving decarbonization. First Mode's Australia, US, and Chilean teams will join Cummins and will be part of the Power Systems segment. This acquisition strengthens Cummins' decarbonization offerings in line with its vision for a sustainable future. Cummins wants to collaborate with OEMs and miners to engineer and pilot these technologies in live environments. The acquisition aligns with Cummins's Destination Zero strategy and enhances its portfolio of clean power offerings.

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