Considering the potential economy-wide impacts of replacing petrol and diesel fuelled vehicles with hydrogen fuelled vehicles through preparation of an EPSRC Supergen White Paper

  • Area of expertise: Energy policy

A team of researchers from St Andrews, Strathclyde and University College London came together, with the assistance of key industry, government and other stakeholders, to conduct a preliminary assessment of how the potential impacts of a partial movement to a ‘hydrogen’ economy may be considered and quantified.

Why was Strathclyde chosen?

The Centre for Energy Policy within the University of Strathclyde International Public Policy Institute and the School of Government and Public Policy has world-leading expertise in modelling, analysing and communicating economy-wide impacts of energy policy actions and solutions and was a natural source of expertise for the inter-disciplinary research group in developing what was intended as a non-technical ‘White Paper’ to inform policy decision makers.

What was done?

While the wider project was led by Professor John Irvine, an expert in hydrogen technologies at St. Andrews University, the economic modelling work was led by Professor Karen Turner, Director of CEP, working with one of CEP’s first joint PhD student in Economics, Oluwafisayo Alabi. They employed the type of input-output ‘multiplier’ modelling framework that is familiar to many actors in the UK policy community to consider what hydrogen supply chains may look like relative to existing petrol/diesel transport fuel supply chains set against electricity and gas supply chains. The latter focus was chosen on the basis that, whilst there are potential bio-sources of hydrogen, it seems most likely that the greatest bulk of hydrogen produced in the UK will derive from the processing of natural gas or the electrolysis of water.

What did we find?

The work was completed in March 2017, with a public launch at London City Hall. The timing fit very well around the early 2017 UK Government consultation on a new industrial strategy broadly aimed at addressing long-term challenges to the economy. This context made the work particularly relevant. One recurring theme of the draft industrial strategy is a commitment to developing strong and competitive domestic supply chains (and associated skills and employment) to support both existing and new economic activity. The context extends to maximising economic value realised across the economy from both private and public investment in energy supply solutions. Thus, our focus on how positive economy-wide impacts of shifting from traditional fossil fuel to hydrogen and ultimately also electric battery-powered vehicles may be realised through strong domestic supply chain development was a very relevant one.

The White Paper considered the potential economy-wide impacts if the fuel supply associated with BPVs could replicate the strength of domestic supply chain linkages currently observed in the UK gas and electricity supply industries. Our insights focussed on findings around the relative import-intensity of petrol and diesel supply and how service sector industries may play an important part in realising GDP and employment gains through a shift towards transport fuels with stronger domestic supply chain links.

How was the work communicated?

In 2016 the EPSRC H2FC SUPERGEN Hub commissioned a total of four evidence based White Papers to inform key stakeholders, especially policy makers, of the roles and potential benefits of hydrogen and fuel cell technologies in addressing issues around the impact that hydrogen and fuel cell technologies may have in addressing the energy trilemma: energy security, energy cost, and CO2 emissions.

The White Paper involving CEP at Strathclyde is the fourth available for download (full paper and extended summary versions) at http://www.h2fcsupergen.com/our-work/whitepapers/. It’s preparation involved the assistance of many people, including colleagues from BEIS, SHFCA, ITM Power and Doosan Babcock.

The White Paper was presented by Karen Turner (Director of CEP) at the public launch of all four papers at London City Hall on 17 March 2017, with videos covering the entire event available to view at www.h2fcsupergen.com/white-paper-launch