This report was commissioned by the Scottish Government to determine the current state of electrolyser manufacturing globally and to support the growing supply chain that will be required to reach the levels of electrolyser deployment targeted in Scotland. Electrolyser system manufacturing and deployment is accelerating rapidly around the world with key targets in the 10s of Gigawatts (GW) now established. With its significant renewable resources, Scotland will have the electrolyser deployment demand to be attractive to electrolyser system manufacturing. However, it will require a strong supply chain to become a key participant in this market.
The Scottish Hydrogen Assessment, published in 2020, noted that Scotland could capture value from the deployment of hydrogen production systems through innovation, manufacturing and infrastructure. It also pointed to the relative immaturity of the supply chain as a potential limiting factor to Scotland maximising benefits from hydrogen production. In the years since then, several Scottish-based companies have started to play a key role in the manufacturing of electrolyser systems from Ames Goldsmith Ceimig in Dundee producing precious metal catalysts to Hydrasun, headquartered in Aberdeen, providing support on piping and design. These companies, among others, are pioneering the ability to transition capabilities from other sectors to electrolyser manufacturing. Scotland's supply chain strengths, weaknesses, opportunities and threats are summarised below:
- Substantial availability of renewables can provide cost-effective and low carbon electricity.
- Scotland, and the wider European market, will likely be hubs for green hydrogen demand.
- The electrolyser market is growing, and the demand is expected to increase soon.
- Attractive market conditions to encourage electrolyser manufacturers to locate in Scotland.
- A strong oil and gas and offshore industry, which includes manufacturers, a skilled workforce and established supply chains.
- Many of the common components needed for electrolysers, such as process equipment, have pre-existing supply chains.
- The Scottish Government is very supportive of the hydrogen sector and wants to promote growth.
- Several companies have started to transition to the hydrogen sector.
- At present there are no commercial-scale electrolyser manufacturers in the Scottish market.
- The majority of materials required for electrolyser manufacture will likely have to be imported.
- Close geographical neighbours, such as Germany, have more mature markets and investment.
- A large number of electrolyser manufacturers have existing and planned manufacturing facilities within Europe.
- Electrolyser manufacturers often have trusted suppliers, meaning it is hard for new entrants to the supply chain.
A supply chain structure and diagram for three different chemistries of electrolyser system have been set out to show their critical components. The companies within the existing Scottish supply chain that could support key aspects of electrolyser manufacture, such as stack potential and pipework and valve manufacture, have been mapped to determine where there might be clusters of activity emerging. The largest cluster is around Glasgow, with potential also around Aberdeen and Edinburgh. The creation of a supply chain hub in Scotland should be explored in the near future to create stronger links between suppliers who may work on different parts of the electrolyser system.
The opportunity to support the electrolyser system manufacturing supply chain in Scotland is significant. Continued supportive policy will be required to increase the potential of developing a strong supply chain and attract electrolyser manufacturing to Scotland. This could take the form of financial support to aid with the transition, location support to help identify the best area for a supply chain hub, and training and skills support to ensure that the workforce is ready for the scale up in production required to meet deployment targets.
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