Article
How will Supply Chains support the growth of the UK’s Hydrogen Economy?
  • linkedin icon
  • twitter icon
  • facebook icon
  • youtube icon
  • instagram icon

A key enabler in helping the UK to achieve its ambitious target of a net-zero economy by 2050 will be the development of low-carbon alternative energy vectors to decarbonise hard-to-abate sectors, for instance steel, cement and transport.

Hydrogen is one vector that has great potential due to its high energy content and low production of emissions. The increase in demand for hydrogen, which has a current production target of 10 gigawatts by 2030, will open up a vast number of opportunities for the supply chain as the UK seeks to shape a pathway to providing clean, secure and affordable energy and build momentum behind a net-zero future.

Commissioned by the UK’s Department for Business, Energy & Industrial Strategy (BEIS), Wood and Optimat, an independent innovation and strategy consultancy, developed a report assessing the supply chain requirements for hydrogen production, transmission, distribution and storage and fuel cell manufacture between now and 2050.

By looking at the required development to support hydrogen production ambitions in 2030 and beyond, the report highlights attractive opportunities across the supply chain for multiple energy scenarios of the future.

Estimated costs, employment and gross value added (GVA) for each supply chain element have been calculated to identify high value opportunities. In parallel, an assessment of UK capability across the hydrogen value chain, identifying both strengths and gaps/constraints, was also undertaken.

Some of the strengths identified included a wide range of UK manufacturers and stockists for equipment, materials and services primed to support growth in the hydrogen market. This capacity was largely due to experience in existing oil & gas, oil refining, petrochemicals, and power industries, where similar services and materials are deployed.  The report also highlights significant export opportunities for UK manufacturers of tradeable goods and services.

In addition to the significant opportunities, the report identifies a number of constraints to supply chain development reflecting the embryonic nature, complexity and wide scope of the hydrogen supply chain. The report also highlights a lack of clarity and confidence in how the future supply chain will develop.

The report concludes that delivering a supportive environment is critical to overcoming the complexity and immaturity of the supply chain and optimising supply chain development and growth.  Providing clarity in end user market development priorities, to underpin market driven supply chain growth, would support supply chain development and realise the opportunity of a hydrogen economy.

The output of the report led to a number of recommendations including for the UK government to continue to emphasise the importance of hydrogen as part of its Ten Point Plan and its potential to accelerate the energy transition.

Daniel Carter, Wood’s Vice President of Decarbonisation and New Energies said ‘The supply chain study led by Wood and Optimat has highlighted the tremendous opportunities that the development of a hydrogen economy could create across engineering, manufacturing and construction. But these won’t happen without investment in a structured plan. The onus is now on government and industry to work together to realise the full potential of the opportunity ahead.’

This report was used to inform the Hydrogen sector development action plan, which sets out actions that Her Majesty’s Government, industry and others are taking forward to realise economic benefits of hydrogen for UK.

Read the full report here: Supply Chains to Support a Hydrogen Economy (publishing.service.gov.uk)

Related Insights
  • Viewpoint

    The future of hydrogen production through steam methane reforming

  • Blog

    Are your fired heaters future-ready?

  • Blog

    Leading by example: Sustainability in the built environment

  • Blog

    Nurturing a culture of innovation

  • Blog

    Artificial Intelligence: Optimizing the future of energy and industry

  • Blog

    Charging forward with fleet decarbonisation

Related News
  • Press release

    Wood awarded two offshore energy contract extensions in Brazil

  • Press release

    bp awards Wood multi-region contract to support efficient and safe energy production

  • Press release

    Completion of Built Environment Consulting sale

  • Article

    Synhelion and Wood collaborate on solar technology milestone

  • Press release

    Wood to deliver detailed design for Equinor’s Halten Øst multi-field development project

  • Press release

    Wood awarded two major multi-million-dollar projects in Uzbekistan

Connect with the team
Get in touch
United by our common purpose to unlock solutions to the world’s most critical challenges, we are future ready, now.