The conversation around energy transition is shifting. While environmental concerns remain paramount, a new focus is emerging: the economic opportunities this transition presents for UK manufacturers. Experts from the University of Sheffield’s Advanced Manufacturing Research Centre (AMRC) and Energy Innovation Centre (EIC) explore this interesting shift, highlighting how South Yorkshire is positioning itself as a national leader in the UK’s clean-tech sector.

Article featured in the latest issue of the AMRC Journal.

“In recent years,  government leaders and lawmakers have been changing their narrative about energy transition,” says Stuart Dawson, the University of Sheffield AMRC’s chief engineer for hydrogen. “The discussion is moving away from ecological consequences of inaction and towards highlighting the economic opportunities.”

Stuart cites Graham Cooley, former chief executive officer at ITM Power, who says that manufacturers must realise that ‘energy transition is also an economic transition’. This aligns with the views of Chris Skidmore, author of Mission Zero: An Independent Review of Net Zero, who states that ‘net zero is the economic opportunity of the 21st century’. 

This increasing emphasis on explicitly seizing the economic potential of energy transition is being welcomed with both arms in the UK. Stuart explains why. 

“In the past, the UK has often failed to fully capitalise on such opportunities. For example, the UK’s off-shore wind programme. Over the past 20 years, the UK has deployed some of the largest off-shore wind farms in the world – the largest off-shore wind capacity in Europe and second only to China in installed capacity. 

“This huge deployment of off-shore wind turbines has massively contributed to the decarbonisation of the UK’s electricity production. So, a great success story then? Well, environmentally – yes, but for the first two decades the programme featured less than 20 per cent of UK-manufactured content. That is, despite the UK’s hugely successful deployment of off-shore wind, we only captured 20 per cent of the manufacturing opportunity. 

“As the energy transition ramps up we need to maximise UK-manufactured content in clean technologies rather than importing it from abroad.”

The energy transition will open multiple doors. But what is the scope and scale on offer?

“It is mind boggling,” says Stuart. “The 2019 UK Climate Change Act commits the government, by law, to reduce greenhouse gas emissions by at least 100 per cent by 2050, compared with 1990 levels. Despite the UK’s impressive 73 per cent reduction in emissions from electricity production as compared with 1990 levels, 75 per cent of the UK’s energy still comes from fossil fuels. 

“But largely, even now – petrol, diesel and aviation fuel power transport and natural gas provides heat for buildings and industrial processes. If we are to hit net zero by 2050 then all these fossil fuels will need to be substituted or decarbonised within the next 26 years.”

So, if achieving UK’s energy transition requires a ‘level of deployment that is unprecedented and eye-watering’, then what is the size of the economic prize? 

Stuart explains: “If we consider just the potential scale of the future hydrogen economy: in April, the Hydrogen Innovation Initiative published its ‘UK Hydrogen Innovation Opportunity’ which estimated the global hydrogen technologies’ market to be worth $1tn annually by 2050. The UK’s share of this global market could be worth £46bn per annum by 2050 and create 410,000 jobs. 

“For context, according to the ADS 2024 Aerospace Sector Outlook, in 2023 the value-add of the UK’s aerospace sector was £19.9 billion and it directly employed 104,000 people. Technologies that support hydrogen production, propulsion and industrial decarbonisation are highlighted in the report as three of the UK’s biggest opportunities.” 

So, how is the South Yorkshire clean-tech cluster coming to life? 

“At both national and international levels, there is an imperative to transition to greener processes for the sake of the wellbeing of our planet and the people on it, as well as an economic boost,” says Professor Mohamed Pourkashanian, managing director of the Energy Innovation Centre (EIC) at the University of Sheffield. “And South Yorkshire has become a major hub to serve this purpose, leading the way to make aviation more sustainable, in the last decade. 

“Decarbonising aviation by making the fuel it uses more sustainable is a vital part of the puzzle for making flying a more environmentally-friendly mode of transport. The EIC brings together the Translational Energy Research Centre (TERC) and Sustainably Aviation Fuels Innovation Centre (SAF-IC) to support first-hand the crucial work being done to decarbonise industry in the aviation sector and beyond.

“Whilst some modes of transport can be made electric through batteries or adapted to run on hydrogen, this isn’t yet possible for jet engines. Instead, developing sustainable aviation fuels (SAFs) – which can be used as fuel straight away with no changes needed to engines or the fuelling infrastructure we already have – is what will help us to remove up to 80 per cent of the emissions from flying.”

The EIC’s two research facilities are the only places in the world where you can capture carbon, produce green and blue hydrogen, store it or convert them into sustainable aviation fuels and analyse their performance and technical suitability. The EIC is also home to the UK’s only Sustainable Aviation Fuels Clearing House, which provides cross-industry support for the development, testing, qualification and production of sustainable aviation fuels.

“We’re building South Yorkshire as the place to be for sustainable aviation and industrial decarbonisation.”

The AMRC is helping push things further.

“Clean-tech manufacturers need innovation, and innovation is what we do best at the AMRC,” says Stuart, who has been leading the AMRC’s research into hydrogen since 2020.

“We recognise the huge, time-critical opportunity to create a solid support system for clean-tech manufacturers, and this is reflected in the AMRC’s core technology theme of future products and processes.

“Our capabilities help clean-tech manufacturers to innovate and scale-up at all stages of the product life cycle. We’re working on innovation projects with partners like ZeroAvia, Toyota, Chesterfield Special Cylinders and EON Power.”

But that’s not all. 

Earlier this year, Rolls-Royce SMR announced the set up of a new testing facility within the AMRC’s flagship Factory 2050 facility in Sheffield. This new multi-million pound Module Development Facility will manufacture and test working prototypes of individual modules that will be assembled into the Rolls-Royce SMR power plants. 

Rolls-Royce SMR is the first UK reactor design to be submitted for Regulatory Justification by the UK Government and is also currently progressing through the Generic Design Assessment (GDA) process by the nuclear industry’s independent regulators.

Professor Harry Burroughes, who heads up the AMRC’s Factory 2050 facility, says SMRs could be a significant technology supporting the UK's climate change targets and explained that the AMRC has been research partners with Rolls-Royce SMR on modular builds since 2017. 

“We are now supporting Rolls-Royce SMR in developing a manufacturing process for the Mechanical Electrical Pipework (MEP) modules, containing as much innovation and advanced Industry 4.0 techniques as possible before the production ramp-up phases start – thus, scaling-up years of fundamental research to full-scale products and processes.

“The key to having SMRs available to support the UK's climate-change targets is pace, and the pace at which we are moving is incredible. In the last two years, we have moved from a small tabletop to a now 14-metre demonstrator, which is absolutely world-class – and we don’t plan on slowing down. 

“This new opportunity is a brilliant way to showcase how innovation can have a real-world manufacturing impact and we are proud to be playing our part in this crucial technology for the world's future sustainable energy needs.”

In July 2023, South Yorkshire was named the UK’s first Investment Zone – further accelerating  its continuous drive for innovation, job opportunities and fostering sustainable development and economic growth.

“The UK’s first Investment Zone, world-class research capabilities of the AMRC, TERC and SAF-IC, and the presence of major clean-tech companies such as ITM Power, Lhyfe, Suiso, Hybrid Air Vehicles and CPH2 form a powerful trident – helping establish South Yorkshire as one of the UK’s leading clean-tech manufacturing and innovation clusters,” says Stuart.

Professor Pourkashanian adds: “There’s also the fact that Boeing - with its first European factory in Sheffield – is a major partner to both the AMRC and the EIC, and has several major projects to make the manufacturing of aviation components more sustainable, supporting clean-tech energy transition.”

Composites at Speed and Scale (COMPASS) is one of them - a major boost to aerostructure manufacturing in the UK, with a new research facility in South Yorkshire with Boeing as its first major research partner. It will help solve composites manufacturing challenges needed to meet future demand for lighter commercial aircraft and help the aviation industry reach net zero.

Stuart says the scale and breadth of the energy transition puts huge economic opportunities on the horizon for UK manufacturers.

He adds: “A combination of the expertise and cutting-edge technology that lies in the region, the work that the AMRC is doing in the field, along with a strong industry network and support inevitably puts South Yorkshire on the map as a major clean-tech hub and a rapidly growing leader in the sector – and in the process helping the UK capture the economic opportunities of the energy transition.”