The Energy Technologies Institute (ETI) is seeking partners for a project which will examine if it is possible to store hydrogen in salt caverns.
The aim is to use the hydrogen in gas turbines when demand for electricity is high.
It believes the UK has sufficient salt bed resources to provide tens of GW equivalent of power to the grid on a load following basis from hydrogen turbines.
Using salt caverns for storing hydrogen for power generation would reduce investment to build new clean power station capacity and increase efficiency, according to ETI.
It added hydrogen caverns could also be cost effective by 2030.
There are currently 30 large caverns in use in the UK and the ETI will examine three salt caverns in Cheshire, Teesside and East Yorkshire.
ETI Project Manager Paul Winstanley said: “The end goal of the project is to understand the challenges, opportunities and costs of creating and operating these stores. Storing and using hydrogen can be a low cost way of providing clean power for peak and load following demand.
“Large amounts of energy can be stored, with one cavern providing enough storage capacity to satisfy the peak demands of a single UK city. This project will provide more detail on the suitability of individual caverns and the costs associated with using them, increasing the evidence base needed if they are to be developed further.”