Options for underground energy storage

Geostock gives an overview of low carbon underground energy storage technologies.
Published: Mon 30 Sep 2019

Underground compressed air and hydrogen storage can store massive amounts of energy and therefore defer investment in energy generation equipment and help balance the grid. They offer economic benefits by ensuring power availability (capacity contracts, for which the transmission system operator purchases a production option without necessarily using it) or reducing the time difference between generation and consumption of energy (arbitrage, in which energy is taken from storage and fed into the grid). These two technologies have very little environmental impact, and offer interesting alternatives to pumped hydro storage, which currently accounts for 96% of the stored electricity available worldwide.

Underground storage techniques

Underground compressed air (CAES) and hydrogen storage are patterned on underground gaseous hydrocarbon storage facilities.

Three main techniques are widely used around the world: salt cavern, mined cavern and porous media storage.

Salt caverns are created by dissolving salt after boring a hole using oil well methods. Freshwater or water with low salt content is injected and salt-saturated brine is extracted. Several months of “leaching” a salt formation are needed to achieve a cavern with a volume of several hundred thousand cubic metres. The diameter of the cavern is between 50 and 100 metres. The cavern can be up to several hundred metres high when the salt formation is thick enough. The cavern is shaped by displacing the water injection point. The shape is more or less regular depending on variations in the solubility of the materials encountered in the salt layer. The least soluble materials fall to the bottom of the cavern and build up there.

Salt caverns are not lined. The salt itself serves as a sealant. This type of storage is suitable for storing a large number of products (provided they do not dissolve salt) at very high pressures if the salt layer is deep enough: typically up to 200 bar for a cavern at a depth of 1,100 metres. To store gases of all types, minimum pressure must be maintained in the cavern to ensure its stability because salt is a visco-plastic material that deforms over time when subjected to an anisotropic stress tensor. The gas corresponding to this minimum pressure is called the “cushion gas”. The usable part of the gas is called the “working gas”.

Several caverns are often created side-by-side, with a safety distance maintained between them to avoid excessively stressing the salt layer.

An example of a salt cavern field in a salt layer with caverns of different sizes (left - Source: Geostock) and an example of a salt cavern (3D sonar image) compared with the Eiffel Tower (right - Source: Geostock)


Mined rock caverns are created by blasting or mechanical digging, using mining and civil engineering techniques. The worksite is accessed via a shaft or an inclined drift. The caverns are not lined. They are sealed by groundwater counter-pressure, if need be supported by artificial water injections. The allowable pressure in the stored product increases with increasing depth under the water table. Propane storage (storage pressure about 8 to 10 bar) is typically built at a depth of between 100 and 150 metres. Liquid oil product storage (storage pressure near atmospheric pressure) can be located several tens of metres below the surface.

Given the major costs involved in using mining techniques at great depths, the technique is suitable for products that can be stored at relatively low pressure (liquid or liquefied hydrocarbons at several bars).

The storage gallery cross-section depends on the mechanical strength of the rock. In competent rock, cross sections exceeding 300 sq. metres are in widespread use. Some exceed 600 sq. metres. The largest cross-sections now reach a height of 30 metres and a width of 20 metres.

An example of an excavated cavern; at the end of construction (left - Source: Geostock); 3D view, with water curtain in blue (right - Source: Geostock)


The third technique uses the natural porosity of the rock. There are two types: the first consists in reusing a depleted hydrocarbon well; the second consists in removing or pushing water from an aquifer and replacing it with the product to be stored. Storage in a porous rock formation requires a favourable geological structure, i.e. a sealed cap with a shape making it possible to store the product. These two types of storage require a substantial number of wells to obtain the target injection and recovery flow rates and control the confinement. Only gas products are stored in these facilities, due to the difficulty in recovering liquid products.

Compressed Air Energy Storage (CAES)

Underground storage of energy in the form of compressed air is a proven technology. Two industrial CAES facilities have been built in salt caverns, one in Huntorf, Germany and the other in McIntosh, Alabama, USA.

CAES consists in using electricity when it is available to compress air and then releasing the air into a turbine to generate electricity as needed. Underground CAES capacities typically range from several tens to several hundred MW and power output typically amounts to several hundred MWh. CAES stores energy in mechanical form. Energy density is therefore low (typically 3 kWh per geometric cubic metre, with storage pressure on the order of 20-40 bar) compared to energy storage in chemical form. The relatively low energy density is offset by low investment costs (compressor, cavern, turbine). The power generated depends on the pressure stored and the air flow rate. Cavern pressure varies between 70 and 43 bar in Huntorf (caverns at a depth of 650 metres) with an air flow rate of 417 kg/s. Higher pressures are possible in deeper salt caverns. Greater pressure differences may also be considered to increase the amount of energy stored, but would call for more complex compression and electricity generation equipment.

Other types of rock can be used to store compressed air but the two CAES facilities that have been built on an industrial scale were built in salt caverns. Storing air in salt is the most cost-effective method for two main reasons: (1) it is relatively easy to achieve large storage volumes by dissolving salt and (2) since salt is naturally airtight, the cavern requires no sealing.

Storage in porous rock is sometimes considered, but the instantaneous air flow rate is too low unless the number of wells is increased. Storage in unlined excavated caverns remains an option if the facility is confined to relatively low operating pressures.

The heat produced by Joule effect during air compression raises the air temperature to a level that is incompatible with salt cavern storage. Temperatures on the order of 600°C are expected at the end of the compression process. This could damage the salt and accelerate closure of the cavern due to creep. To control the air temperature, it is necessary to provide isothermal compression with heat capture and dissipation via a cooling circuit or a heat exchanger at the compressor outlet. There are therefore two types of CAES: non-adiabatic (sometimes called isothermal) and adiabatic. In non-adiabatic CAES, the captured heat is lost during compression (isothermal compression) or dissipated in a post-compression heat exchanger. In adiabatic CAES, the heat captured by the heat exchanger is stored in stones, concrete blocks (low temperature), oil (300°C) or molten salt (600°C) for re-use during recovery.

During electricity production the air is expanded in a turbine. The air must be re-heated during expansion, notably to avoid damaging the turbine. Here again, there are two alternative designs: in non-adiabatic CAES, the air is heated by burning gas. The turbine can therefore be considered as a gas turbine "boosted" by adding air that is already compressed. In adiabatic CAES, the air again passes through a heat exchanger that uses the heat stored at the end of the compression process. It is not necessary to employ gas combustion.

In the best-case scenario, non-adiabatic CAES has an efficiency of about 55% (Schainker, 2011). The efficiency of adiabatic CAES can reach 70%. In addition, adiabatic CAES has a much better carbon footprint than non-adiabatic CAES.

Adiabatic CAES has not yet been industrially implemented. Investment costs are higher due to the cost of heat storage, a component that calls for significant R&D. Adiabatic CAES will become competitive when the operational costs of non-adiabatic CAES increase due to the cost of gas or CO2. Due to its low investment cost, non-adiabatic CAES will nevertheless remain a good option for occasional use in capacity contracts (Réveillère and Londe, 2017).

Underground hydrogen storage

Energy can also be stored in the form of hydrogen in a variety of rock formations. For the same reasons that apply to compressed air, the salt cavern solution is the most cost effective.

Hydrogen storage requires an upstream hydrogen production unit (electrolysis), which consumes electricity, and a downstream fuel cell to generate electricity. The part of the facility that is strictly dedicated to underground storage accounts for only 15 to 25% of the total investment cost, the remainder being earmarked for electrolysis and electricity generation. However, major cost reductions are expected in this equipment in coming years.

Hydrogen storage is chemical, not mechanical. It offers energy density that is intermediate between hydrocarbon and CAES storage. In a 200,000 cu. metre salt cavern operated between 80 and 200 bar, about 16 million Nm3 of working hydrogen can be stored, the equivalent of 48 GWh (hydrogen has an energy density of 3 kWh/Nm3).

As in CAES, hydrogen storage is carbon-free, provided the hydrogen is produced by electrolysis. Hydrogen will probably have the benefit of favourable policies (ENEA, 2011).

Hydrogen is stored in salt caverns in the United Kingdom (Teesside) and the United States (Spindletop, Moss Bluff, Clemens Dome). The hydrogen stored in these caverns is for use in the chemical and oil industries, notably for desulphurisation in refineries. It is not stored for energy purposes. However, the existence of these caverns demonstrates the feasibility of underground hydrogen storage despite the specific features of the element (very small molecule, propensity to damage materials – notably steel).

It is to be expected that new hydrogen storage units will be built to store energy, notably in Germany, the Netherlands, the United Kingdom and France.

Due to its good energy density and higher investment cost than that of CAES, underground hydrogen storage can be used for mass storage with longer, even seasonal, cycles. Seasonal energy storage will increase as the use of renewables increases.

Hydrogen storage is also expected to benefit from growth of the hydrogen powered vehicle market. It is likely that hydrogen caverns will in future supply both vehicle fleets and electricity generation units.

Other forms of underground energy storage

Other forms of underground carbon-free energy storage are available. They will be briefly reviewed below. In most cases, underground storage can be used to store massive amounts of energy.

Abandoned mines can be converted into underground pumped hydro storage. The principle is similar to that used in surface pumped storage. Two water reservoirs with equivalent capacity must be created. The upper reservoir is emptied by gravity into the lower reservoir during peak consumption periods to generate electricity via turbines. The water is then pumped from the lower to fill the upper reservoir during off-peak periods. The performance of underground pumped hydro facilities depends on storage capacity, level difference between the two reservoirs and water flow rate, i.e. the diameter of the connection between the two reservoirs. Underground pumped hydro storage facilities exist in various places including France, Germany and the U.S. state of Virginia. Geostock has designed a pilot project in France to convert an underground LPG storage facility into an underground pumped hydro storage facility (Réveillère and Cracowski, 2016).

There are various forms of underground thermal energy storage: aquifer, borehole with heat pump; and cavern thermal energy storage. These various technologies can be used to create different storage capacities, which can exceed 10 MWth in the case of ATES. They are generally associated with a source of unavoidable thermal energy and heating networks. The thermal energy storage market, initially developed in China and the United States, is currently expanding most strongly in Europe.

Finally, there are projects still in the planning stages that consist in using salt cavities to create giant underground batteries. If implemented, the solution would make it possible to directly store energy in the form of a liquid electrolyte.

Profitability of mass energy storage

To calculate the profitability of underground energy storage, its cost must be compared to the revenue it is expected to generate. To do this we use the LCOS (Levelized Cost Of Storage) equation, in which the comprehensive cost of storage, including investment and operating costs, is divided by the energy generation over the lifetime of the facility:

I_t: Investment costs over period t (in years)
M_t: Operating/maintenance expense over period t (in years)
F_t: Fuel expense over period t (in years)
E_t: Energy generated over period t (in years)
r: Weighted average cost of capital, or WACC (rate)
n: System lifespan (in years)

Energy storage delivers a variety of services: arbitrage, generation smoothing, capacity guarantee, frequency regulation, voltage regulation, black start, etc. The revenue associated with these various services must exceed LCOS.

Analysts agree that mass energy storage, including CAES and hydrogen storage, is only profitable under current conditions if a number of services are combined. It would, for example, not be profitable if used only for purposes of arbitrage (arbitrage consists of generating revenue by storing energy at low-cost periods and selling it at high-cost periods).


Underground energy storage in the form of CAES and hydrogen storage is expected to expand as the share of renewables in the energy mix increases. The underground components of the two techniques are applications of solutions that have for decades proven an effective way to store hydrocarbons, especially natural gas. The most cost-effective way to store both compressed air and hydrogen is to use salt caverns. However, other options exist for creating such underground storage facilities in the absence of salt.

The two techniques complement each other as they cover different requirements.

CAES has a low capital investment cost and low energy density. The associated energy cycles are short. CAES can be used day-to-day for load peak shaving. CAES can also be used to balance the grid if need be. This second use, paid for in a capacity contract, is currently seen as a promising market for CAES.

Hydrogen storage is more costly since it requires electrolysis and a fuel cell. It offers higher storage capacity than CAES. Hydrogen storage is therefore a better mass storage solution. It may operate on a seasonal basis. In addition, hydrogen storage may offer interesting opportunities in the short term, notably in the field of mobility, to support the start of precursor projects.

Whatever form it takes, energy storage can deliver a variety of services. In future, energy storage projects can be made profitable by combining these complementary services.

Background on the author

Geostock, a subsidiary of Entrepose, has been designing and operating underground hydrocarbon storage facilities for more than half a century. Founded by French oil companies in the 1960s to cope with their new obligation to hold reserves on French soil, Geostock designed the Manosque liquid hydrocarbon and Lavéra LPG storage facilities, which it continues to operate today. Building on this expertise, it gradually began to work outside France and has now carried out projects for a large number of customers in over 50 countries around the world.

Geostock still generates the bulk of its revenue in underground hydrocarbon storage. However, several years ago it also branched out into underground storage of carbon-free energy.