H2FC SUPERGEN update on HFC Supply Chain Economic Benefits

Recent economic modelling work carried out by the EPSRC funded H2FC SUPERGEN is now published. This shows the economic gains which can be achieved through low carbon policies, and specifically developing supply chain activity to support refuelling of battery/hydrogen vehicles.

A core theme of the UK Government's new Industrial Strategy is exploiting opportunities for domestic supply chain development. This extends to a special ‘Automotive Sector Deal’ that focuses on the shift to low emissions vehicles (LEVs). Here attention is on electric vehicle and battery production and innovation.

In their paperFraming policy on low emissions vehicles in terms of economic gains: Might the most straightforward gain be delivered by supply chain activity to support refuelling?’ the authors (Karen Turner, Oluwafisayo Alabi, Martin Smith, John Irvine, Paul E. Dodds) argue that a more straightforward gain in terms of framing policy around potential economic benefits may be made through supply chain activity to support refuelling of battery/hydrogen vehicles.

This paper sets out the opportunities for low emission vehicle refuelling supply chains potentially replicating the strength of domestic upstream linkages observed in the UK electricity and/or gas industries. They use input-output multiplier analysis to deconstruct and assess the structure of these supply chains relative to that of more import-intensive petrol and diesel supply, and show key findings:

·         The current UK supply of petrol and diesel is highly import-intensive.

·         It has the weakest economic ‘multipliers’ of all UK industries investigated.

·         UK electricity and gas industries have much stronger domestic multipliers.

·         A high share of economic value delivered therein is embedded in UK service sectors.

·         The sustainability of value-added embedded in oil and gas extraction is questioned.

A crucial multiplier result is that for every £1million of spending on electricity (or gas), 8 full-time equivalent jobs are supported throughout the UK. This compares to less than 3 in the case of petrol/diesel supply. Moreover, the importance of service industries becomes apparent, with 67% of indirect and induced supply chain employment to support electricity generation being located in services industries. The comparable figure for GDP is 42%.

 

The H2FC SUPERGEN commissioned four evidence based White Papers that will inform key stakeholders, especially policy makers, of the roles and potential benefits of hydrogen and fuel cell technologies in addressing the question ‘What impact can hydrogen and fuel cell technologies have in addressing the energy trilemma: energy security, energy cost, and CO2 emissions?

1.       The role of Hydrogen and Fuel Cells in Providing Affordable, Secure Low-carbon Heat (2014)

2.       The role of Hydrogen and Fuel Cells in delivering Energy Security for the UK (2017)

3.       The role of Hydrogen and Fuel Cells in Future Energy Systems (2017)

4.       The Economic Impact of Hydrogen and Fuel Cells in the UK (2017)

These four HFC Supergen White Papers are all available for free download here: http://www.h2fcsupergen.com/our-work/whitepapers/