A key part of a clean and secure energy future

Hydrogen can help tackle various critical energy challenges, including helping to store the variable output from renewables like solar and wind to better match demand. It offers ways to decarbonise a range of sectors – including long-haul transport, chemicals, and iron and steel – where it is proving difficult to meaningfully reduce emissions. It can also help improve air quality and strengthen energy security.

Storage, transmission and distribution of hydrogen

Transport and storage costs will play a significant role in the competitiveness of hydrogen. If hydrogen can be used close to where it is made, these costs could be close to zero. However, if the hydrogen has to travel a long way before it can be used, the costs of transmission and distribution could be up to three times as large as the cost of hydrogen production.

The smooth operation of large-scale and intercontinental hydrogen value chains will depend on the availability of adequate storage capacity and functionality. Various storage options are available today, with gas or liquid tanks typically used to store hydrogen for hours to days, and underground facilities that can hold tens of thousands of tonnes of hydrogen already in operation.

Further research is needed to assess different underground storage options, to better determine their suitability, including  storage volume, duration, price, speed of discharge and potential contamination considerations, to promote their development and to support their use.

Long-distance transmission and local distribution of gaseous hydrogen is costly given its low energy density. Compression, liquefaction or incorporation of the hydrogen into larger molecules are possible options to overcome this hurdle. Each option has advantages and disadvantages, and the cheapest choice will vary according to geography, distance, scale and the required end use.

Transmission, distribution and storage elements of hydrogen value chains

Note: LOHC = liquid organic hydrogen carrier.

Blending hydrogen into existing natural gas pipeline networks would provide a boost to hydrogen supply technologies without incurring the investment costs and risks of developing new hydrogen transmission and distribution infrastructure. Action to update and harmonise national regulations that set limits on allowed concentrations of hydrogen in natural gas streams would help to facilitate such blending.

	All gas	Allowable under certain circumstances
Germany*	2	8
France	6	0
Spain	5	0
Austria	4	0
Switzerland	2	0
Lithuania*	0.1	2
Finland	1	0
Netherlands*	0.05	1
Japan	0.1	0
United Kingdom	0.1	0
Belgium	0.1	0
California	0.1	0
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Higher limit for Germany applies if there are no CNG filling stations connected to the network; higher limit for the Netherlands applies to high-calorific gas; higher limit for Lithuania applies when pipeline pressure is greater than 16 bar pressure. Sources: Dolci et al. (2019), “Incentives and legal barriers for Power-to-Hydrogen pathways: An international snapshot”, International Journal of Hydrogen; HyLaw (n.d.), Online Database; Staffell et al. (2019) “The role of hydrogen and fuel cells in the global energy system”, Energy and Environmental Science.

If hydrogen needs to be shipped overseas, it is easier and cheaper to transport it in liquid form, by liquefying it or converting it to ammonia or liquid organic hydrogen carriers (LOHCs). IEA analysis shows, for distances below 1 500 km, transporting hydrogen as a gas by pipeline is likely to be the cheapest delivery option; above 1 500 km, shipping hydrogen as ammonia or an LOHC is likely to be more cost-effective.

These alternatives are cheaper to ship, but the costs of conversion before export and reconversion back to hydrogen before consumption are significant. All these options have safety considerations any concerns that the public may have will need to be addressed.

Pipelines are likely to be the most cost-effective long-term choice for local hydrogen distribution if there is sufficiently large, sustained and localised demand. However, distribution today usually relies on trucks carrying hydrogen either as a gas or liquid, and this is likely to remain the main distribution mechanism over the next decade.

There are a number of regions where hydrogen imports could be cheaper than domestic production. In Japan domestic production of hydrogen using electrolysers and its distribution could cost around USD 6.5 per kgH2 in 2030; hydrogen imported from Australia could cost around USD 5.5/kgH2. Similar opportunities may develop in Korea and parts of Europe.

Using ammonia directly in end-use sectors could further improve the competitiveness of imports. Even where importing hydrogen is not the cheapest option, some energy-importing countries may wish to consider imports to increase their energy diversity and access to low-carbon energy.

Next: Demand for clean hydrogen ▶