Uniper Energy Storage

Thinking for the future

Tracing its roots back to Ruhrgas, which was founded in 1926, Uniper Energy Storage has accumulated years of experience in gas storage that allow the German energy company to ensure a secure and flexible supply for its consumers in Germany, Austria, and the UK. The business covers two main activity areas in its operation – underground gas storage and, since 2015, power-to-gas, with Uniper being one of the pioneers in Germany for employing the latter technology.

“There are two ways of storing gas underground – the storage cavern and the storage reservoir – which differ from one another with regards to the reservoir rock and the storage mechanism,” Managing Director, Axel Wietfeld begins. “The caverns are large natural or man-made underground cavities and those created as a result of human activity come into being by either leaching them in rock salt or by using mine workings. Using salt caverns as underground gas storage facilities depends on the occurrence of huge underground salt deposits at accessible depths; the salt domes in northern and central Germany as well as in the UK are particularly suitable for this. Large caverns for storing gas can be created in the rock salt, which is mainly located in what are known as salt stocks only a few hundred metres under the earth’s surface, and can easily be tapped through borings.”

Due to their larger volume and the natural flows in the reservoir rock (usually sandstone), storage reservoirs react more slowly to changes in withdrawal rates in the storage well holes, which makes them ideal for covering the seasonal base load. Axel elaborates: “Storage reservoirs are underground facilities in depleted gas fields or in aquifer horizons. Since hydrocarbons have previously been extracted from these deposits, they have been well-examined and their storage behaviour is known. The cap rock layers, which mostly consist of mudstone or rock salt, have been impervious to gas for millions of years, thus ensuring safe storage operations.”

Five years ago, Uniper also began developing storage solutions to support renewable energy. The company uses its power-to-gas plants in Falkenhagen and Hamburg to feed the hydrogen produced directly into the gas grid. “Power-to-gas refers to the conversion of electricity to hydrogen, or, in an additional process step, to methane. In this second stage, at our Falkenhagen plant, we are able to convert ‘green’ hydrogen from regenerative energy sources into methane (CH4), i.e., into synthetic natural gas, using CO2 from a bio-ethanol plant. In May 2018, as part of the international STORE&GO research project, we opened the methanation plant as an expansion to the existing power-to-gas facility in Falkenhagen,” Axel explains. Commenting on the benefits of the generated regenerative gas, he adds that it can be used as a substitute for natural gas or other fossil fuels in a diverse range of applications, and that the technology provides the link between the electricity and gas markets.

“We have identified several ways in which power-to-gas could be further integrated into other sectors. Presently, we are evaluating our opportunities and holding talks with various stakeholders on our future co-operation,” Axel continues. “For example, the existing gas infrastructure could be utilised via an intermediate methanation stage, with renewable methane being used as a fuel for natural gas vehicles, and this model is already being proven feasible by Audi. Furthermore, renewable hydrogen could also be used in trains, where we have already gained some initial experience in tender procedures. Replacing ‘grey’ hydrogen with ‘green’ one from power-to-gas would mean that, even today, fuels could incorporate a proportion of green energy and significantly reduce CO2 emissions without the need for infrastructure adaptation.”

Energy transition
According to Uniper Energy Storage’s Managing Director, the current gas market design for Germany’s gas storage business needs to be developed further, in order to preserve the existing storage infrastructure and to ensure the sufficient storage levels that are required for a guaranteed secure supply in the winter months. “Gas storage takes over important system functions to maintain the security of supply and this has been observed year-by-year, most notably in peak demand situations like last winter when up to 60 per cent of the gas consumption in Germany was sourced by gas storage withdrawals. This, together with gas storage’s growing contribution as a flexibility provider to the coming energy transition, are among the major challenges we have to address in the German market, at the moment,” Axel analyses.

He goes on to suggest that the country needs to establish a more comprehensive and efficient regulatory framework that will allow gas storage to assert itself and facilitate energy transition. “Declining price indicators of gas storage services magnify the impact of the current regulatory framework’s imperfections. While these deficiencies are not new, the recent declining spreads cast a new light on their potential long-term implications. Even if there is a net benefit to society at present times, storage operators may not have sufficient incentives to provide storage, which may lead to future closures and the reduction of storage availability below the optimum security of supply levels. This would cause considerable additional costs in German gas and electricity networks and further increase dependence on gas imports.

“Take France for example – a country that has already taken a new route to ensure the long-term availability of natural gas storage facilities. Gas storage as major flexibility provider can further facilitate market convergence towards the greener mix by fostering the spread of renewable gases. We definitely support regulatory measures on integrating positive economic and environmental externalities in the gas market design. We need a level playing field at German and EU level with some key principles on sectoral integration and remunerating positive externalities,” he maintains.

“Uniper has already successfully shown across a series of pilot projects how power-togas can help complete the energy transition. Now the ball is in the politicians’ court – if we create the right framework, we will be able to advance this technology and cement it as a vital tool in addressing Germany’s and Europe’s energy needs,” Axel concludes.

Uniper Energy Storage
Services: Underground gas storage; power-to-gas services