The impact of hydrogen underground storage on fair partnerships: A GIS-based integration of salt caverns into PyPSA-Earth

Abstract

The increasing demand for hydrogen in Europe and the development of cross-border infrastructure, such as the SoutH2 Corridorconnecting Tunisia, Italy, Austria, and Germany, underscore the importance for hydrogen storage solutions to ensure supplysecurity and competitive pricing. Without storage, producers face increased market dependency, as electrolyzers require con-tinuous operation to remain economically viable. At the same time, storage offers opportunities to strengthen domestic valuechains by securing hydrogen supply for local industries. To assess the system-level impact of underground hydrogen storageand its implications for hydrogen partnerships, we integrate GIS-based salt cavern potentials into PyPSA-Earth and apply theframework 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, andpolicy assumptions.Our results show that underground hydrogen storage enables seasonal balancing at multi-terawatt-hour scale, reshaping hydro-gen 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 fromshort-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. Byincreasing resilience and reducing cost volatility, underground hydrogen storage strengthens the position of exporting regionsand supports more balanced and sustainable hydrogen partnerships.

Keywords: Energy Transition, Hydrogen export, hydrogen underground storage, Hydrogen prices, salt caverns, Power-to-X, PyPSA-Earth