Techno-economic feasibility of underground hydrogen storage at the Ahuroa gas field with combined cycle gas turbine integration in the Taranaki region of Aotearoa New Zealand

Abstract

This study assesses the technical and economic feasibility of converting the Ahuroa depleted gas field in Taranaki, Aotearoa New Zealand into an underground hydrogen storage facility integrated with an existing combined cycle gas turbine power station for dispatchable green electricity generation. Underground hydrogen storage in depleted gas reservoirs offers a pathway for seasonal-scale energy storage that batteries and pumped hydro cannot provide, making it particularly relevant to the country's goal of achieving one hundred percent renewable electricity. Using site-specific operational data and internationally sourced cost parameters, the study calculates the Levelised Cost of Hydrogen across three scenarios and extends this to a full Levelised Cost of Electricity comparison against natural gas generation. The results show that Ahuroa is technically suitable for hydrogen storage conversion, with confirmed reservoir geology, existing infrastructure, and a direct pipeline connection to the power station. However, the economic analysis reveals that green hydrogen electricity is significantly more expensive than natural gas electricity under current market conditions, with the cost gap driven primarily by energy conversion losses in the hydrogen production and electricity generation chain rather than by the storage infrastructure itself. Carbon pricing at current New Zealand levels contributes negligibly to closing the competitiveness gap, and commercial viability requires a combination of low-cost renewable electricity, rising natural gas prices, capacity payments, and direct production support. Ahuroa is best understood not as a standalone commercial hydrogen project but as a technically credible long-duration storage asset that becomes increasingly relevant as the country’s gas supply declines and the energy transition deepens.