Regulation and support of hydrogen production and storage

The study shows that, despite substantial long-term potential for hydrogen in Switzerland, significant economic and regulatory barriers remain. For supporting hydrogen production, market-based instruments such as fixed premiums or contracts for difference prove to be particularly suitable. In contrast, the development of storage capacities is primarily hindered by uncertainties regarding market development and regulatory design. Switzerland currently does not have any seasonal gas storage facilities within its territory and has not yet set explicit targets for their development. Instead, storage capacities abroad are used and secured through intergovernmental agreements. Based on current knowledge, geological conditions for seasonal storage within Switzerland are considered unfavorable, meaning that such solutions would likely be significantly more expensive than using foreign storage facilities. Moreover, it should be noted that converting methane storage facilities to hydrogen storage would result in four to six times less energy being stored due to hydrogen’s lower volumetric energy density. On the demand side, dual-fuel installations currently serve as a flexibility option within Switzerland. In the longer term, liquid hydrogen derivatives could play a role in energy storage. For comparison, Switzerland’s mandatory strategic reserves for petroleum products currently correspond to 4.5 months of annual consumption.