Assessment of electrolysers: report
An assessment into the state of electrolyser manufacturing globally, to support an understanding of the supply chain opportunities in Scotland.
2. Supply Chain Structure
2.1 Critical components analysis
The first stage to mapping the electrolyser supply chain in Scotland is to understand the key components that make up a standard electrolyser package, as supplied by an original equipment manufacturer (OEM). An analysis of the critical components within the PEM, ALK and SOE electrolysers will enable identification of the companies that have the capability to manufacture or integrate these components.
There are several components that are similar across the three electrolyser chemistries, for example compressors, water purification, dryers and electrical systems. However, the chemistries also have some significant differences, particularly within the electrolyser stack, due to different materials and manufacturing processes used. The following sections provide a breakdown of the critical components for each electrolyser chemistry.
2.1.1 Proton Exchange Membrane
A generic process flow diagram for a PEM electrolyser is shown in Section 1.2. Using this process flow the critical system components of the PEM system have been identified. Table 3 provides a breakdown of the components and subcomponents required to manufacture a PEM electrolyser system and which sector of the supply chain these relate to. Figure 9 shows the supply chain diagram for this chemistry of electrolyser.
| Main component | Sub-component | Material(s) | Supply chain sector |
|---|---|---|---|
| Electrolyser stack | Anode | Iridium oxide | Metal mining and processing |
| Cathode | Platinum nanoparticles on carbon black | Metal mining and processing | |
| Electrolyte | Perfluorosulfonic acid (PFSA) Membranes | Materials processing | |
| Separator | PFSA Membranes | Materials processing | |
| Porous transport layer anode | Platinum-coated sintered porous titanium | Metal mining and processing, metal coating | |
| Porous transport layer cathode | Sintered porous titanium or carbon cloth | Metal mining and processing | |
| Bipolar plate anode | Platinum-coated titanium | Metal mining and processing, metal coating | |
| Bipolar plate cathode | Gold-coated titanium | Metal mining and processing, metal coating | |
| Frames and sealing | Polytetrafluoroethylene (PTFE), Polysulfone (PSU), Ethylene Tetrafluoroethylene (ETFE) |
Materials processing, precision engineering | |
| Feed water supply | - | - | Manufacturers of water systems |
| Rectifier | - | - | Semiconductors, manufacturers of electrical equipment |
| Oxygen / Water separation vessel | - | Polypropylene (PP) | Precision engineering |
| Hydrogen / Water separation vessel | - | Stainless Steel 316 | Precision engineering |
| De-oxo Dryer unit | Deoxidiser | Carbon steel | Vessel: Precision engineering Catalyst: Metal mining and processing, materials processing |
| Dryer | Carbon steel | Vessel: Precision engineering Catalyst: Metal mining and processing, materials processing |
|
| Heat Exchanger | Stainless steel 316 | Machine engineering | |
| Heater | - | Machine engineering | |
| Chiller | - | - | Manufacture of cooling equipment |
| De-ionised water unit | Ion polishers | Composite Polyethylene (PE) | Resin: Wastewater treatment, potable water, food and beverage Vessel: Precision engineering |
| Buffer tank | PP | Precision engineering | |
| CO2 Scrubber | Composite PE | Plastics component manufacturing | |
| Pumps | Stainless steel | Machine engineering | |
| Filters | PP & Chlorinated Polyvinyl Chloride (PVC-C) | Wastewater treatment, potable water, food and beverage | |
| Cooling unit | Glycol tank | Stainless steel 304 | Precision engineering |
| Filter | Stainless steel 304 | Wastewater treatment, potable water, food and beverage | |
| Glycol pump | Cast iron | Machine engineering | |
| Fans | - | Machine engineering, manufacture of cooling equipment | |
| Compressor | - | - | Manufacture of compressors |
| Control system | - | - | Electrical hardware and software, sensors |
| Water / cooling fluid piping | - | PE100 | Plastics/piping processing, pipework installation |
| Hydrogen piping | - | Suitable stainless steel or carbon steel | Metal/piping processing, pipework installation |
| Oxygen piping | - | PE100 | Plastics/piping processing, pipework installation |
| Cabling | - | - | Manufacture and installation of electrical cabling |
2.1.2 Pressurised Alkaline
A generic process flow diagram for an ALK electrolyser is shown in Section 1.2. Using this process flow the critical system components of the alkaline system have been identified. Table 4 provides a breakdown of the components and subcomponents required to manufacture an alkaline electrolyser system and which sector of the supply chain these relate to. Figure 10 shows the supply chain diagram for this chemistry of electrolyser.
| Main Component | Sub-component | Material | Supply Chain |
|---|---|---|---|
| Electrolyser stack | Anode | Nickel-coated perforated stainless steel | Metal mining and processing, metal coating |
| Cathode | Nickel-coated perforated stainless steel | Metal mining and processing, metal coating | |
| Electrolyte | Potassium hydroxide 5-7 molL-1 | Chemical processing | |
| Separator | ZrO2 stabilized with PPS mesh | Metal mining and processing | |
| Porous transport layer anode | Nickel mesh (not always present) | Metal mining and processing | |
| Porous transport layer cathode | Nickel mesh | Metal mining and processing | |
| Bipolar plate anode | Nickel-coated stainless steel | Metal mining and processing, metal coating | |
| Bipolar plate cathode | Nickel-coated stainless steel | Metal mining and processing, metal coating | |
| Frames and sealing | PTFE, PSU, ethylene propylene diene monomer | Plastics processing, precision engineering | |
| Transformer/Rectifier | - | - | Electrical manufacturing and installation |
| Oxygen / Potassium Hydroxide separation vessel | - | PP | Plastics processing and manufacturing |
| Hydrogen / Water separation vessel | - | Stainless Steel 316 | Precision engineering |
| De-oxo dryer unit | Deoxidiser | Carbon steel | Vessel: Precision engineering Catalyst: Metal mining and processing, materials processing |
| Dryer | Carbon steel | Vessel: Precision engineering Catalyst: Metal mining and processing, materials processing |
|
| Heat exchanger | Stainless steel 316/titanium | Machine engineering | |
| Heater | Machine engineering | ||
| De-ionised water unit | Feed water supply | - | Plumbing, water industry |
| Ion polishers | Composite PE | Resin: Wastewater treatment, potable water, food and beverage Vessel: Plastics processing, precision engineering |
|
| Buffer tank | PP | Precision engineering | |
| Cardon dioxide scrubber | Composite PE | Plastics processing, precision engineering | |
| Filters | PP & PVC-C | Wastewater treatment, potable water, food and beverage | |
| Cooling unit | Glycol tank | Stainless steel 304 | Precision engineering |
| Filter | Stainless steel 304 | Wastewater treatment, potable water, food and beverage | |
| Glycol pump | Cast iron | Machine engineering | |
| Fans | - | Machine engineering, manufacture of cooling equipment | |
| Compressor | - | - | Manufacture of compressors |
| Control system | - | - | Electrical hardware and software |
| Piping | - | PE100/stainless or carbon steel | Manufacture and installation of pipework |
| Cabling | - | - | Manufacture and installation of electrical cabling |
2.1.3 Solid Oxide Electrolyser
A generic process flow diagram for an SOE is shown in Section 1.2. Using this process flow the critical system components of the solid oxide system have been identified. Table 5 provides a breakdown of the components and subcomponents required to manufacture a solid oxide electrolyser system and which sector of the supply chain these relate to. Table 5 shows the supply chain diagram for this chemistry of electrolyser. Figure 11 shows the supply chain diagram for this chemistry of electrolyser.
| Main Component | Sub- Component | Material | Supply Chain |
|---|---|---|---|
| Electrolyser stack | Fuel electrode/Cathode | Nickel Oxide + Yttria-Stabilised Zirconia (YSZ) | Ceramics, metal coating |
| Electrolyte | YSZ | Ceramics, metal coating | |
| Oxygen electrode/Anode | lanthanum strontium cobalt ferrite (LSCF)/ lanthanum strontium manganate (LSM) | Ceramics, metal coating | |
| Current collector | Silver/gold/platinum/nickel mesh | Precision engineering | |
| Sealing gasket | Mica/thermiculite | Ceramics, precision engineering | |
| Interconnector | Stainless steel | Precision engineering | |
| Transformer/Rectifier | - | - | Electrical manufacturing and installation |
| System pre-heaters | - | - | Machine manufacturing, precision engineering |
| Hotbox | - | Microporous insulation, Alumina, Steel | Precision engineering |
| De-oxo dryer unit | Deoxidiser | Carbon steel | Vessel: Precision engineering Catalyst: Metal mining and processing, materials processing |
| Dryer | Carbon steel | Vessel: Precision engineering Catalyst: Metal mining and processing, materials processing |
|
| De-ionised water unit | Feed steam supply | - | Plumbing, steam industry |
| Ion polishers | Composite PE | Resin: Wastewater treatment, potable water, food and beverage Vessel: Plastics Processing, precision engineering |
|
| Buffer tank | PP | Precision engineering | |
| Cardon dioxide scrubber | Composite PE | Plastics processing, precision engineering | |
| Filters | PP & PVC-C | Wastewater treatment, potable water, food and beverage | |
| Heat exchanger | - | - | Precision engineering, machine engineering |
| Compressor | - | - | Manufacture of compressors |
| Control system | - | - | Electrical hardware and software |
| Piping | - | PE100/stainless or carbon steel | Manufacture and installation of pipework |
| Cabling | - | - | Manufacture and installation of electrical cabling |
2.2 Supply chain capabilities
In addition to mapping out the components of an electrolyser, it is also important to understand the strengths, assets and factors that will be critical to shaping the development of electrolyser supply chains. The key capability requirements for the manufacture and deployment of electrolysers are provided in Table 6, where the overall supply chain has been split into five tiers: raw and processed materials, manufacture of components, system integration and installation, operation and maintenance and end-of-life. Specific capabilities have been identified for each tier, alongside more general capabilities required for successful growth of the supply chain market.
| Supply chain tier | Tier specific capabilities | General capabilities |
|---|---|---|
| Raw and processed materials | Metal mining and processing Materials processing Metal coating Plastics manufacture and processing Chemical processing Semiconductors |
De-risking through consistently growing demand and reliable market prices Supportive policy: investment in people and infrastructure; subsidies and incentives for projects; regulatory framework and standardisation Skilled workforce: access to a workforce and companies, with the know-how to support each segment; access to training and support for people and companies that want to transition Services: process engineering, precision engineering, machine engineering, electrical engineering, and financing Development and use of land and infrastructure |
| Manufacture of components | Water system manufacture Electrical equipment manufacture Cooling equipment manufacture Process equipment manufacture Electrolyser/fuel cell manufacturer Testing facilities |
|
| System integration and installation | Metalwork and pipework Control system – electrical hardware and software System integrator Electrolyser/fuel cell OEM Project management, construction and commissioning |
|
| Operation and maintenance | Available source of low carbon and cost-effective electricity Know-how to operate and maintain facilities Electrical, mechanical, software, control and chemical engineering |
|
| End-of-life | Decommissioning services Material recovery and recycling |
Raw and processed materials
Procurement of the raw processed materials is the first tier in the electrolyser supply chain. The required capabilities for this stage focus on the resources and skills needed to produce electrolyser materials, such as mining and materials processing. Scottish supply chain capability is more likely to lie in the materials processing side of this tier, which would require specialist engineering companies such as metals coating and semiconductor manufacturing. Developing materials processing capability would enable Scottish companies to supply materials to component manufacturers and OEMs, potentially increasing the attractiveness for these later stages of the supply chain to locate in Scotland. This tier has the biggest reliance on importing from other countries, and therefore has a higher vulnerability associated with availability and transport of material. Increased electrolyser production will affect demand for minerals shown in Table 7[9]:
| Crucial Mineral | PEM | ALK | SOE |
|---|---|---|---|
| Platinum | √ | ||
| Palladium | √ | ||
| Iridium | √ | ||
| Nickel | √ | √ | |
| Aluminium | √ | ||
| Steel | √ | ||
| Zirconium | √ | √ | |
| Lanthanum | √ | ||
| Yttrium | √ |
Availability of these materials will differ for each electrolyser chemistry: for example, nickel is relatively common with global resource estimated at 300 million tonnes produced in Australia, Indonesia, South Africa, Russia and Canada[10]. On the other hand, platinum is much rarer with global resource estimated at 70 thousand tonnes of which 90% is from South Africa[11][12]. Figure 12 shows the projected demand for nickel, platinum and palladium for manufacture of electrolysers relative to global production volume in 2019; based on IEA electrolyser material usages projection[9], BloombergNEF electrolyser deployment forecasts[13], end-of-decade installed electrolyser capacities reported in literature and an in-house assessment by Arup using this data. This shows that there is a potential substantial increase in the demand of platinum and palladium, and a relatively low increase in demand of nickel, relative to their 2019 production volumes. This suggests that, based on this analysis, platinum and palladium have the highest potential to become risks within the supply chain. However, there is a significant amount of uncertainty due to the analysis' sensitivity to projected technology make up and annual manufacturing forecasts (this assessment is purely an indication of a potential trend and is subject to change as the market evolves). Therefore, innovation in electrolyser design to reduce reliance on these materials will be of increasing importance to improve raw material sustainability, which could be a key opportunity for Scottish companies and Government funding opportunities. A high-quality end-of-life program involving metals recycling is another potential measure to combat high mineral demand, offering another opportunity for Scottish investment.
Manufacture of components
The next tier is manufacturing, which requires a wide range of capabilities to be able to produce the components for the electrolyser. Engineering skills, specifically the disciplines listed in Table 6, in conjunction with appropriate manufacturing infrastructure are crucial. This tier is also a major vulnerability due to the required manufacturing capacity, the need for a skilled workforce and reliance on the previous tier. Several components, such as heat exchangers, pumps, compressors, feed tanks, rectifiers and transformers, are 'off-the-shelf' and can be manufactured by suppliers that are not necessarily hydrogen specialists, creating opportunity for companies that already produce these components for other industries. As the hydrogen market is at a relatively early stage, OEMs and system integrators require trusted suppliers, which potentially makes the market challenging to break into. However, as hydrogen demand expands significantly this will open opportunities for more companies to play a role. Manufacture of the electrolyser stack itself would be carried out by the specialist electrolyser OEM, of which the closest at commercial-scale to Scotland is currently ITM Power in Sheffield. However, similar to materials processing, if there is a strong component manufacturing capability in Scotland this could encourage more OEMs to locate close to these supply chains.
System integration
System integration and installation focuses on the post-manufacture, pre-operation tier of the supply chain. The key focus of this segment is a system integrator, who specialises in electrolysers, and is normally associated with the OEM. This stage also includes many of the auxiliary services identified in the component breakdown of the electrolysers, such as control systems and pipework, for which there could be opportunity in the Scottish supply chain though the engineering sector. Finally, project management, construction and commissioning contractors will be required to manage and oversee the system integration and commissioning, where there are many transferable skills from other sectors.
Operation and maintenance
Operation and maintenance, along with decommissioning, are key services throughout the operational lifetime of the electrolyser (c. 25 years). These services would need to be located relatively close to where the electrolyser is deployed to ensure availability of service. Therefore, as Scotland grows its installed electrolyser capacity, there will be a real opportunity for companies to provide these services. Operations and maintenance require capability in electrical, mechanical and chemical engineering, as well as control and software specialists.
End-of-life
For the decommissioning of the assets specialist electrical and chemical disposal will be required, in addition to suitable recycling facilities. Innovation around the recycling of precious metals will be key to improving sustainability and reducing demand for mined materials. ALK and PEM electrolyser stacks generally have a lifespan of 7-10 years, while SOE stacks are 2-3 years.
General capabilities
In conjunction with the segment specific requirements, several general capabilities have been identified as critical to creating an environment that encourages supply chain growth. Companies entering a supply chain market will usually look to grow in incremental steps, aiming to de-risk each stage of scaling up as far as possible. At early stages, there is always a balance between demand and supply, and companies within the supply chain will look for a consistent (but growing) level of hydrogen project demand and reliability of market costs as they scale up. At each step of supply chain growth there will be a learning curve to enable more efficient operations, thereby reducing costs and increasing production. Building up elements of the supply chain from scratch will require a much greater level of investment and incentives than using companies that can transfer their skills and knowledge over to the hydrogen market.
To help de-risking for supply chain companies, supportive policy is a key enabler. Germany is ranked as the most attractive market for hydrogen investment, largely due to their policies and incentives[8]. Furthermore, a lack of standards and codes and the unsuitability of regulatory framework are key vulnerabilities for the supply chain. As highlighted in the previous sections, a skilled workforce will be key and therefore any potential gaps should be assessed with suitable training schemes put in place. In addition, the location of electrolyser components and services in Scotland provides opportunities for the integration of knowledge via skills hubs, training academies and research centres.
Finally, the development and use of land and/or infrastructure to enable the location of large factories on Scotland is crucial. For example, ITM Power's giga-factory covers 134,000ft2 and they are currently planning a new 1.5GW factory covering a 260,000ft2 area, both located next to the M1 motorway in Sheffield. Therefore, identification of suitable manufacturing sites with the required space, utilities (including grid connection, water supply, and communications), and transport links (considering road, rail and maritime) is important. These sites would also ideally be located in areas where hydrogen innovation, development and use is already taking place, thereby linking together key players in the industry (i.e. the creation of hydrogen hubs).
2.2.1 Component supply chain examples
Below is a breakdown of some key components of the electrolyser showing the capabilities required at each of the supply chain tiers in more detail.
PEM electrolyser electrode assembly
A PEM electrolyser electrode assembly requires several specialist materials as shown in Table 3. This electrolyser chemistry requires precious metals, such as platinum and iridium, more common materials, such as titanium, as well as the specialised membrane from which the chemistry gets its name. One of the key aspects of the PEM supply chain is the platinum catalyst that is required to give the performance characteristics of PEM systems. Figure 13 outlines a simplified version of the platinum supply chain.
Case study: Ames Goldsmith Ceimig are based in Dundee and specialise in the production of catalysts. They manufacture platinum group metal based electrocatalysts, which are used in PEM fuel cells and electrolysers, and their products are supplied to OEMs at the start of the hydrogen electrolyser supply chain.
Ames Goldsmith Ceimig's 'HyPer WE' range of products for PEM electrolysers include iridium black, iridium oxide, iridium ruthenium oxide, platinum black and platinum on carbon support. Their 'HyPer FC' range of products for PEM fuel cells include platinum black, platinum ruthenium and a wide variety platinum on carbon support. These catalysts have been used in the field for MW scale projects by end users for several years.
Ames Goldsmith Ceimig are continuing to develop their catalysts to improve performance and durability. This includes further refinement of their products as true alloys, which will bring better efficiency and increased stability at the electrolyser anode.
System integration requirements
A key aspect of this complex system is in the design, installation and integration of the various elements that combine to form an electrolyser. The required pipework can be a particular challenge as it includes water, oxygen and hydrogen pipework requirements with their different materials, design processes and installation techniques. Figure 14 outlines a simplified version of the pipework supply chain, design and integration.
Case study: Headquartered in Aberdeen, Hydrasun is a recognised market leader in the provision of integrated fluid transfer, power and control solutions to the oil and gas, energy, industrial and marine industries worldwide. Over the past seven years, they have diversified their range of products and services to position themselves as a leading supply chain and systems integrator in the emerging hydrogen markets and have successfully completed over 30 projects across the UK and Europe in the mobility and industrial sectors.
Hydrasun's vision is to be a market leader in the integration, site installation and maintenance of hydrogen systems to end users. Hydrasun have been working closely with hydrogen OEMs, contractors and project developers in the UK and Europe since 2016.
Through their Hydrogen Skills Academy, located in Aberdeen, they continue to invest in the country-wide development of technical skills in the hydrogen supply chain. The academy, supported by Scottish Enterprise funding, delivers an industry-first suite of training and competency assessment programmes that will enable trained and skilled personnel to install, commission, maintain and operate hydrogen systems.
Precision engineering
The construction of an electrolyser would not be possible without precision engineering. Components such as pressure vessels, electrical instrumentation and stack electrodes require detailed design templates to build. Figure 15 outlines a simplified version of the pressure vessel supply chain.
Case study: Forsyth Group are a Scottish based provider of turnkey fabrication and associated services to the energy, utilities and distillation industries. Forsyth Group are based in the Northeast Scotland with six fabrication and associated services facilities between Caithness, Moray and Aberdeenshire. Services include, piping, modular units (e.g. compressors), pressure vessels, structural steel, cable reels, electrical and instrumentation, scaffolding, civil works and specialist coatings.
Forsyth Group only began exploring the renewables/hydrogen industry in April 2022 but have over 100 years of company experience. Their presence in the whisky and distillation sector has enabled them to be exposed to projects where electrolysers are planned to be part of the turnkey packages they undertake with current projects in train across Scotland and overseas. Some key learnings Forsyth have taken from their renewables development since April include:
- Materials availability is often overestimated by OEMs/operators.
- Manufacturing tolerances and production schedules are unrealistically tight; especially given steel availability restrictions.
- Qualification for tenders is often bureaucratic, often with no feedback. However, industry events are insightful and allow relationship building to occur which is key for the supply chain.
- There are vast market opportunities, therefore a selective marketing and business development approach is required tailored to each sector.
- Local content is a strong marketing tool.
- The renewables industry does not generally have standardisation across health and safety, contracts, technical specifications etc.
Hydrogen compressor integration
Most hydrogen production systems will require a compressor to either store enough hydrogen or to boost the pressure for vehicle refuelling. These can either be provided alongside the electrolyser by the OEM or procured separately. Hydrogen compressors are, in general, a mature technology. However, due to the increased requirement for high purity hydrogen and the increase in demand, new technology options are being developed. Figure 16 outlines a simplified version of the compressor supply chain.
Case study: Howden is a leading global provider of mission critical air and gas handling products headquartered in Glasgow, including a manufacturing site, and is recognised as a global leader of hydrogen compression solutions. Howden is well established in the hydrogen market, with over a century of compression experience and operations in 90 locations over 35 countries. Howden was founded in 1854 designing and supplying boilers and steam engines for the marine industry. The company developed its technology range throughout the 19th and 20th centuries to include fans, gas boosters, steam turbines for power generation and compressors.
Howden manufacture leading compressor technologies such as Thomassen reciprocating compressors and Burton Corblin diaphragm compressors. Howden's hydrogen compression solutions have enabled some of the world's most unique and innovative renewable hydrogen projects that are accelerating the energy transition, including the world's largest hydrogen refuelling station; the world's first climate-neutral fuels (efuels); and the world's first green steel project. Their technology can handle and optimise hydrogen across the value chain from production, to storage, distribution and end use such as refuelling stations, Power-to-X applications and heavy industrial purposes.
Electrolyser systems
The whole supply chain comes together to create a complete electrolyser system. The details of these systems are provided in Section 2.1.
Case study: Aqualution is a chemicals company based in Duns, Scottish Borders, who are developing a novel electrolyser technology. Aqualution primarily work in the healthcare and food processing industries, for which they produce hypochlorous acid through electro-dialysis of water and salt. This process produces hydrogen as a by-product and over the past 12 months Aqualution have been working with the Scottish Government and University of Edinburgh to develop their electrolyser technology to produce hydrogen as the primary product.
Aqualution first considered the hydrogen industry through engagement with Scottish Enterprise and South of Scotland Enterprise agencies. A Phase 1 feasibility study has been conducted with promising results, and investment is currently being sought for Phase 2, which will involve a 20kW demonstration electrolyser. One of the barriers to quickly developing the technology ahead of international competitors which Aqualution have experienced is the length of time it takes to secure the grant funding on offer. Aqualution are currently considering several options to progress their electrolyser technology to the next stage.
Aqualution's electrolyser is unique in that it has the potential to work with low purity water or even seawater. Aquation have previously deployed their hypochlorous acid electrolyser in countries such as Kenya, Egypt and Ghana and therefore have experience ensuring the systems are robust and can be managed remotely. All manufacturing currently takes place at their site in Duns and the only components which are imported are the membranes (from the US) and coated anodes (from the Netherlands, due to long lead times in the UK).
Contact
Email: hydrogeneconomy@gov.scot
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