Decarbonisation of road transport is essential in a Net -Zero transition . Currently neither hydrogen nor electricity are inevitable. Is electrification the single obvious solution, or is a combination with hydrogen more functional and cost -effective? Scotland makes a good exemplar of transport Transition, with a defined geography, a world leading Net -Zero ambition , and proven pathways for generating large amounts of renewable energy. We identified essential elements of the new transport systems , including CapEx and OpEx and emissions through transition. We developed five scenarios modelled for transition around varyi ng the pace of change for some or all veh icle classes . Monte Carlo simulations investigated the emissions , vehicle mixes, construction speed, and costs. CapEx to install generation and refuelling infrastructure for electricity or for hydrogen favours hydrogen by a substantial margin, with multi £Bn cost -reductions. Untaxed OpEx costs favour electricity, such that whole system costs are broadly similar for any mix, although untaxed per -km fuel costs for either should be lower than hydrocarbons. User experience, energy storage, vehicle characteristics, social factors, use of natural resources – almost all favour increased hydrogen use. Hydrogen interseasonal storage at national scale is feasible in salt caverns, with re -purposing of the transmission pipeline grid, and huge scale - up of generation; interseasonal electricity storage does not exist at national scale, and significant electrification penetration requires immense infrastructure upg rades. A no regrets action is the rapid deployment of hydrogen infrastructure for buses , trucks and large fleets , with enough to facilitate hydrogen car ownership. Jobs c ould be created and maintained locally in hydrogen manufacturing, installation and servicing. [Type here] Broader Context For the world to reach Net-Zero greenhouse emissions, it will be necessary to essentially eliminate road transport emissions. In our example study of Scotland, road transport currently accounts for ~25% of greenhouse emissions. The primary technology for this to date has been electric ity, stored in batteries; this has captured around 2% of the new vehicle market. However, this technology has many disadvantages limiting its widespread growth including immense expense on infrastructure. Large and commercial vehicles generally require r apid refuelling, all -day range, small on -board fuel storage mass and low fuel cost - all also desirable in cars. Batteries to supply all existing vehicles in the world using current technology require more Cobalt and Lithium than is available in known res erves. These factors favour "hydrogen as the new diesel" over electrification. We built a comprehensive model, focussed on Scotland, comparing electricity and hydrogen in five scenarios of cost and timing. We show that capital cost and emissions throug h transition greatly favour hydrogen, while untaxed fuel cost favours electricity. Combined costs come out even at any mix proportion of the two. We recommend a pathway for a substantial deployment of hydrogen fuel for commercial vehicles and a seed netwo rk for cars and similar . Modelled analysis of optimum share of Zero Emissions fuel, considering hydrogen and battery electricity. Assessing costs, emissions and non -quantifiable factors. [Type here] Introduction Decarbonisation of road transport will be essential for the world to meet its neede d reductions in emissions. The main technological solution used and planned to date is electricity , stored in batteri es on board vehicles. There are several limitations to this, which we discuss in this paper. The most promising zero carbon alternative to batter y electric vehicles (BEV) is hydrogen fuel cell electric vehicles (FCEV), which appear to address almost all of the practical shortcomings of BEVs. The aim of this research is to identify the optimum combination of hydrogen and electricity in use as road vehicle fuels, based on a combination of cost, transition emissions, and non -quantifiable ‘soft’ factors. We have chosen Scotland as an example for analysis for two pr imary re asons – • The Scottish Government’s commitment to unusually demanding targets for early decarbonisation, with an all -sector reduction of 75% from 1990 levels to be achieved by 2030, followed by net zero by 20451. • Scotland’s current, planned and potential high level of renewable electricity means that we can be confidently & realistically expect that both electricity and hydrogen could be produced through carbon free means. This is backed up by local natural gas sources, which may also be used to produce hydrogen. Figure 1 Scottish emissions targets, showing overal l government targets, road transport estimated target for 2030, and energy related emissions history and required trajectories to achieve ultimate net zero target. Non -energy emissions not shown but accounted for in the net -zero calculated end points. -10,000010,00020,00030,00040,00050,00060,00070,00080,000 1990 2000 2010 2020 2030 2040 2050Annual greenhouse emissions (kT CO2 equiv)Emissions against time -recent records and projected requirements Electricity Heat Road Total Land useTotal emissions 2030 target Road transport 2030 estimated targetNegative emissions from changes in land use. Assumed constant from 2017. Emissions from electricity production are expected to reach zero well before 2030.2017 -latest data Net Zero , 2045 [Type here] Figure 1 shows these targets in the context of the recent emissions records and the primary energy related emissions sources. This shows a required reduction of approximately 44% in road transport emissions by 2030 and 88% by 2045, compared to current levels. (See supplementary publication for further details). Until recently , most Scottish governmental plans and public percept ion has been that, in order to deliver these targets, the widespread use of Battery Electric Vehicles (BEVs) will be required. For example: • Scottish Government – free to use public electric charging points, interest free loans for purchase of zero emissio ns or plug in hybrid vehicles 2, 3 • European Union – vehicle emissions targets are set such that cars and vans (which could be decarbonised using BEV technology) are required to reach levels that will require zero emissions vehicles fairly quickly, while targets for larger vehicles, e.g. buses and heavy goods vehic les (which for practical intents and purposes could not be widely decarbonised as BEVs) are set to allow increased efficiency diesel engines4. • “Electrify Everything”5 • Scottish Power ‘Zero Carbon Communities’ setting out all -electrified future6. Also, anecdotally, electrification is all that people in general seem to be aware of. However, take up to date is slow, with only 11,000 (<0.4%) out of Scotland’s approximately 3 million road vehicles being BEVs7; current market share is approximately 1.6% of new vehicle sales8. With a service life of around 14 years for cars and 10 years for HGVs, that is not even close to the required pathw ay. Several factors have been proposed for this, including: • Limited availability of batteries to manufacturers • Range anxiety • Slow refuelling time • Unfamiliar use pattern • High purchase price of vehicles An alternative zero emissions technology is to use hydr ogen, usually in a Fuel Cell Electric Vehicle (FCEV) but also, rarely, in internal combustion engines. A few manufacturers have released FCEVs on the market in the UK and/or other markets – cars and buses are both available, and heavy goods vehicles are i n development9-11. The use of hydrogen FCEV, illustrated in Supplementary Figure 2, can o vercome all of these issues with BEVs – • Far less battery capacity is needed – a small one of around 1kWh is used to recapture energy from regenerative braking. [Type here] • Hydrogen systems weigh considerably less than battery ones, so more fuel can be taken on board providing for longer range between refuelling / recharging. The weight of the fuel itself is negligible. The volume required for storage is a significant issue. • Refuelling with hydrogen, in the form of pressurised gas recharging the on -board tank, is sim ilar to the way in which hydrocarbon fuels are used, and it also takes just a few minutes. This also reduces range anxiety, in that the time needed to refuel will not make a significant difference to journey time. • At large production volumes, FCEVs should end up cheaper than even internal combustion engines, because of the inherent simplicity of a fuel cell (which has no moving parts). Batteries are likely to remain expensive because of the quantity of rare raw materials needed to produce them12, unlike fuel cells which are primarily common materials with only a very small amount of platinum catalyst – comparable to a hydrocarbon vehicle’s catalytic convertor. The two primary disadvantages of hydrogen are (1) h ydrogen requires a considerably larger fuel tank than petrol or diesel for the same range, and (2) there is currently a lack of refuelling infrastructure. Unlike a BEV, an FCEV cannot be recharged at home and requires a refuelling station in the same way as petrol or diesel. In this paper we present the results of modelling and related investigations into: • The place that hydrogen vehicles should hold in the decarbonisation of road transport • The effects of different strategies and prioritisations for roll o ut. • Whole system c osts to implement the transition . The key metrics we use are related to emissions, cost, and practicality of implementation. We conclude with recommendations of the optimum pathway to deliver zero carbon road transport in Scotland, and the appropriate steps to deliver it. This research should also be generally transferable to other areas of the world, although local factors including typical vehicle life , annual distance travelled per vehicle , and local emissions from the p roduction of hydrogen and generation of electricity will all be significant. [Type here] Hydrogen as a fuel The element Hydrogen is the most common in the universe and, more relevantly, the 10th most common on earth by mass13. Hydrogen does not occur in significant quantities in nature in its pure form ; it is invariably bound in a more complex molecule – the most common being water and methane – from which it must be separated to use . A number of different processes can be used for this, described in section 0 below. When u sed a fuel, hydrogen produces no carbon dioxide or other greenhouse gas emissions. It is most commonly used in fuel cells, which make electricity which is then used to power electric motors driving the vehicle at around 50% overall efficiency. The only by -product of its use water14. It is also possible to burn hydrogen in an internal combustion engine, at around 25% efficiency, either co -combusted with diesel (conversions are commercially available now from Ulemco ) or as 100% hydrogen (understood to be in development). Hydrogen combustion can create NOx depending on fuel -air mix and combustion temperatur e15. This may have useful applications in the transition phase away from petrol & diesel, especially if existing vehicles can be practically converted. However, we expect this to be a fairly niche application in the longer run, and we have not developed it further in this paper. Hydrogen is likely to compete as a transport fuel with battery stored electricity in BEVs, although – as currently with petrol and diesel – there are pros and cons to each, and we can expect that there will be a need and a place in t he market for both. Some important characteristics of hydrogen are set out in table 1: Specific Energy (kWh/kg) Density (kg/m3) Hydrogen at 700 bar 33.016 3916 Petrol 12.816 715 -78017 Diesel 12.616 820 -84517 Li-ion batteries 0.12518 2250 -250019 Table 1 Specific energy and density values for various potential vehicle fuels. Lower Heating Value is used – this assumes that heat generated in the process cannot be recovered. These characteristics have real world practica l consequences: • High specific energy, i.e. energy per unit mass. This means that a hydrogen system will be considerably lighter than one using batteries. For a typical family car , the hydrogen vehicle would weigh approximately 500kg less than an equiva lent battery fuelled vehicle, or about the same as a petrol/diesel powered vehicle9, 20. This weight saving would translate in actual use to permit lower powered engines and lower fuel consumption . It would also reduce wear on brakes and tyres, responsible for a significant amount of u rban particulate emissions, and on road surfaces21. • Low density i.e. mass per unit volume. Even at the high pressures (700 bar) used in road vehicles, the density of compressed hydrogen is only around 3 9 kg/m3, about [Type here] one-twentieth that of petrol, increasing the size of the fuel tank required (see calculations within the model, accessed through the supplementary publication ). Taken together, these two factors mean that a hydrogen powered vehicle will weigh about the same as a petrol / diesel vehicle , but will require a fuel tank approximately 4x or 6x as big as for petrol or diesel respective ly, to get a comparab le range. For a battery vehicle, the battery would be larger than a petrol or diesel tank, but slightly smaller than a comparable hydrogen fuel tank, and would be considerably heavier than either. The trade -off between these usually mean s a reduced lugga ge space for a n FCEV compare to a similar sized hydrocarbon vehicl e, and extra weight but a smaller reduction in space for a BEV. Comparison of similar vehicles from the same manufacturer (Mercedes Benz) illustrates this: Model Fuel type Boot capacity Weight Range GLC 220d Diesel 550 litres 1950 kg 440 miles / 700km GLC F -Cell Hydrogen 400 litres 2055 kg 300 miles / 480km EQ-C Battery 500 litres 2425 kg 190 -250 mi/3 -400km (weather dependent) Table 2 Characteristics of similar vehicles with different fuel systems. Note that the GLC F -cell also contains a 13.5 kWh battery, uniquely in a hydrogen car, which negatively affects the boot & weight. EQ -C battery is 80 kWh ). 9, 22 -24. The upshot of this is that hydrogen lends itself more to larger and longer range vehicles, especially th ose harder to decarbonise such as HGVs25. BEVs are more likely to suit smaller, short range vehicles . The overlap between the two is likely to be around family cars and small vans – in many ways similar to that between diesel and petrol (Illustrated in Supplementary Figure 3). [Type here] Methods We planned to analyse the situation in order to: • Understand the rate of Zero Emissions Vehicle (ZEV) sales needed, and how that should develop. • Understand the infrastructure and associated costs to support those sales. • Identify the optimum roles that BEV and FCEV should play from the point of view of cost and emissions reduction. • Understand the effects of different strategies for rolling out ZEVs and associated infrastructure. • Understand the factors affecting the rate of implementation and other non - quantifiable factors of FCEVs compared to BEVs. Modelling We carried out a predictive modelling assessment examining the likely impact, cost and implementability of various ways of reaching the targets in respect of road transport, over the period 2020 to 2050. We created (1) a base case where zero emission vehicles (ZEV) are deployed at the same rate, the rate being chosen to meet the 2030 an d 2045 targets. We also considered four comparison assessments – (2) More Trucks, Same Cars - Accelerated deployment of larger vehicles (buses and heavy goods vehicles). As zero emissions heavy goods vehicles are not expected to be commercially available unt il 2022/23, the deployment of those is delayed in the model until 2023. (3) More Trucks, Fewer Cars – Accelerated deployment of larger vehicles as in ( 2), but deployment of ZEV cars and vans slowed down so that the 2030 emissions target is only just met. (4) Laid back – an easier to achieve rate that would meet the 2045 target but not necessarily the 2030 target. (5) Foot to the Floor - a very fast acceleration of all zero emission vehicle sales. These additional comparisons were all simulated by varying the inputs o f the gradient constant (k) and the sales transition mid -point (xo) in the logistic function used in step 2 of the model (vehicle sales generation), described below and in the supplementary publication. We built a model using Microsoft Excel, with a basic structure as illustrated in Figure 2: [Type here] Figure 2 Schematic of model created to analyse required fuels to meet emissions targets. A more detailed description of each step, together with a link to a reviewable online version of the model, is presented in the supplementary publication . Key underlying assumptions are set out below: • The total number of vehicles in eac h class will be constant. In fact in recent years there has been a gradual upwards trend in vehicle numbers following a dip from 20087, which we attribute to the effects of the global recession at that time. For this assumptio n to hold, there will therefore require to be some management of demand for new vehicles. • Annual new vehicle sales will be constant at current levels, and gradually all will become zero emissions vehicles. • No new hydrocarbon cars or light goods vehicles will be sold after 2032 , in accordance with Scottish Government policy to remove the need for these by that date. Note that this is not expressed as ban1. • Vehicles of each class continue to be scrapped at the same average age as at present. [Type here] Costs and other quantifiable assumptions are prese nted in the supplementary publication . Desk based research We also examined the factors that could not be readily quantified adequately within our model , but are likely to have a bearing on the ease of implementation . We introduce the implications of the se in the Discussion. We carried out desk -based research supplemented with discussions with a number of experienced people in relevant industries – fuelling operation, vehicle manufacturing, hydrogen fuelling systems manufacture. We examined academic publ ications, published information from manufacturers, and grey literature sources such as Scottish, EU and UK government departments and agencies. We examined the key issues limiting the development of BEV growth, and other issues than need to be addressed w ith the use of BEVs. We investigated the characteristics of hydrogen FCEVs in relation to these issues, and considered where BEVs might retain some benefits. [Type here] Modelling Results New vehicles and associated emissions (Base Case) We started out examining the Base Case for the numbers of new Zero Emissions Vehicles (ZEV), either BEV or FCEV, that would be required to deliver the necessary emissions displacement. Assuming roll out of ZEVs in all vehicle classes at an equal rate (see Figure 6), the required development of zero emission vehicle numbers to achieve the 2030 target is illustrated below in Figure 3: Figure 3 Total new zero carbon and hydrocarbon vehicle sales required to meet emissions targets, shown with the changing total numbers of zero carbon and hydrocarbon vehicles registered. The apparent misalignment at 2032 reflects the desire to end hydrocarbon car sales by that date. As can be seen in Figure 3, by 2025, approximately 17% of new vehicles in this scenario will have to be zero emissions vehicles. By 2028, this will be 50%. However, the overall numbers are dominated by passenger cars, while larger veh icles such as buses and HGVs are present in much smaller numbers – around 2% of the total - but represent around 21% of all road vehicle emissions7. The above total new zero emission vehicle numbers can be broken down by class (shown in Suppl ementary Figure 4), where it can be seen that the rate of new zero carbon vehicle sales is the same for all vehicle classes in this Base C ase, using a log based series generation. These vehicle numbers were chosen, by adjusting the constants in the logistic function used to generate the numbers of new vehicle sales, so that for the majority of cases the 2030 emissions meet the target as shown in Supplementary Figure 5. 0500,0001,000,0001,500,0002,000,0002,500,0003,000,000 050,000100,000150,000200,000250,000300,000 2020 2025 2030 2035 2040 2045 2050Total number of vehciles on roadAnnual vehicle salesRequired vehicle sales and total numbers registered, zero carbon and hydrocarbon, to achieve targets. All vehicle classes combined. Hydrocarbon vehicles -annual new sales (Left Hand axis) Hydrocarbon vehicles - Total numbers registered (Right Hand axis)Zero carbon vehicles - Total numbers registered (Right Hand axis)Zero carbon vehicles - annual sales (LH axis) [Type here] This projection meets the 2030 emissions target for the majority of potent ial emissions cases. It also comfortably overshoots the requirement for 2045. This means that if the trend identified to enable the 2030 target to be met can be delivered and sustained, the requirements for 2045 would be comfortably exceeded. [Type here] New vehicles and associated emissions (additional cases) Similarly, we looked at the numbers of new ZEVs that would be required for the additional cases . For the additional vehicle rates comparisons, the resulting vehicle sales for the different scenarios are shown in Figure 4. This is comparable to Figure 3, although for clarity only new ZEV sales have been shown. Figure 4 New s ales of zero emission vehicles, projected for various additional scenarios. These give rise to future reducing emissions as shown in Figure 5 below. Figure 5 Reduction in emissions through transition period, projected for vari ous additional scenario s. This analysis was carried out based on the full range of future vehicle emissions cases developed in step1, but only single representative trac es are shown, for clarity. 050,000100,000150,000200,000250,000300,000 2020 2025 2030 2035 2040 2045 2050Annual vehicle salesNew Zero Emission vehicle sales, additional comparisons 'Foot to the floor' Base Case* More Trucks, Fewer CarsMeet 2045, miss 2030 * The scenario More Trucks, Same Cars is indistiguishable from 'Base case' in this chart. 010002000300040005000600070008000900010000 2020 2025 2030 2035 2040 2045 2050Annual emissions (Kt/yr CO2 eq)Projected annual emissions -single representative cases only Base Case More Trucks, Same CarsLaid Back Foot to the floorMore Trucks, Fewer Cars2030 target 2045 target [Type here] The differen ce between the Base Case and the More Trucks, Fewer Cars case appears to be small in terms of emissions, and as shown below the cost difference is also small. However, an examination of the required vehicle numbers shows that by 2025 the required number of annual new vehicle sales to meet targets is significantly lower than for the base case – 33,000 per year instead of 44,000 per year. By 2030 the gap has widened to 167,000 and 222,000 respectively; only after that does the gap start to narrow again. This lower requirement for vehicles – predominantly cars – will mean that a considerably smaller number of ZEV cars will be needed to deliver the legislative objective of the 2030 emissions target than would otherwise have been the case, making achieving it a more realistic possibility. There app ears to be little overall benefit in accelerating large vehicle sales without reducing others – the More Trucks, Same Cars case - there is a small, but not insignificant, reduction in emissions by 2030 although the base case closes the gap by 2035. The Lai d Back case shows that it should be possible to meet the long -term climate goals even if the 2030 target proved unattainable, while the Foot to the Floor case shows for comparison what might be possible as an extreme, but is unlikely to be practical due to limits in availability of suitable materials , vehicles and infrastructure. [Type here] Cost & Emissions based balance points (base and additional cases) Next, we considered the impacts on cost and emissions through the transit ion period of differing proportions of hydrogen and battery electricity , on the assumpti on that all ZEVs would be either BEV or FCEV. These are illustrated below in Figures 6 and 7. Figure 6 Capital Expenditure and Total costs as NPV relative to fuel type proportion, for the five cases through transition period. Based on Monte Carlo simulation output, each data point (dot) represents one modelled scenario. In Capital Expenditure, the two “More Trucks ” scenarios are indistinguishable from the Base Case. Figure 7 Total emissions through transition against proportion of hydrogen fuel used, for the five cases . 02,0004,0006,0008,00010,00012,00014,00016,00018,000 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Aggregate NPV over 2020 -2050, £m Proportion of future fuel energy as hydrogen -the balance is in batteriesCapital Expenditure and All Costs as NPV compared to fuel type balance Foot to the Floor -All costs Base Case -all costs Laid Back -all costsMore Trucks, Fewer Cars -all costsMore Trucks, Same Cars -All costs Foot to the Floor -Capital expenditure Laid Back -Capital expenditureBase Case -Capital Expenditure - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Aggregate emissions over period 2020 -2045, kT Proportion of future fuel energy as hydrogen -the balance is in batteriesAggregate emissions through transition compared to fuel type balance Base Case is almost indistinguishable from the case More Trucks, Fewer Cars.Foot to the FloorLaid Back More Trucks, Fewer Cars More Trucks, Same Cars [Type here] Here we consider the costs and emissions resulting from the five transition cases. Comparisons in this section relate to the balance between hydrogen and batteries as zero carbon fuel, assuming that ultimately all vehicles are one or the other. The Monte Carlo simulation method used profiles for randomly generated proportions of each vehicle class using either hydrogen or elec tricity. The effect of the balance between hydrogen and battery vehicle use is illustrated in Figure 6 and Figure 7 above. Each vehicle class had upper and lower bounds set for the proportion of hydrogen and electricity used as fuel within that class. Th e bounds were set such that buses and HGVs are only permitted a small proportion of battery power due to the practical limitations of batteries in large vehicles. This has the effect of requiring a minimum hydrogen demand of around 45% of all zero carbon fuel. Then randomly generated values between those bounds were created for 1000 permutations, with a square distribution. For each permutation, the capital and operational cost of infrastructure and supplying fuel was the calculated for each year and the n normalised into a Net Present Value using a discount rate of 6%. Figure 6 shows the result of each of those permutations as a separate data point, plotting the NPV against the proportion of hydrogen fuel used , for both the capital expenditure and the total costs . For the five cases considered, it can be seen that for the Base Case and the two More Trucks cases , there is little variation in overall cost whatever the future hydrogen – electricity fuel balance p oint ends up as . The case More Trucks, Fewer C ars shows a slight fal l in overall costs with more hydrogen used, but this is unlikely to be significant . The other two suggest that broadly slower progression to the net -zero target would favour more hydroge n on a cost basis , and vice versa. However, figure 6 also shows that for any scenario, the capital cost of infrastructure is lower as more hydrogen is used – at maximum hydrogen, the total cost is less than half that at 45% hydrogen and indeed this can be extrapolated back to an all -battery figure of around £4bn, approximately 5-6 times as much as for all hydrogen for the Base and More Trucks cases . This is a very significant factor . Even though the overall costs, once the cost of fuel is taken into account, are very similar, when considering the capital inve stment required alone, there are enormous savings to be had in mov ing towards hydrogen as a fuel source. Given also that the wholesale cost of hydrogen as a fuel is likely to become lower t han the current cost of petrol on a per -km basis (both excluding fuel duty and VAT), we suggest that the fuel cost is not in fact very significant in this context, and the capital cost represents the cost of transition . This cost represents the cost to install the fuel production, distribution and dispensing facilities. It does not include the cost of providing additional services (non -fuel sales) at retail sites, the cost of extra land required for electric charging d ue to the extra time each vehicle would have to spend there, the cost of providing strategic operational storage, or any tax. Similarly, the emissions in use and manufacture were assessed at each of the fuel balance permutations, and are plotted abov e in Figure 7 for all five cases. As can be seen, there is a clear trend in favour of hydrogen in all cases – this is primarily due to the significant amou nt of greenhouse gases released in the manufacture of the battery [Type here] itself (this is modelled to decrease over time); other emissions factors are essentially equal between FCEV and BEV in use, since we assume that both hydrogen and electricity would be produc ed from renewable carbon free sources. As might be intuitively expected, the Foot to the Floor and the Laid Back cases result in higher cost but lower emissions, and lower cost but higher emissions, respectively. From the above, it is also clear that the c apital cost per kT of greenhouse emissions mitigated through the transition will be lower in all cases where more hydrogen is used. Fuel and Infrastructure requirements Base on the optimum “More Trucks, Fewer Cars” case we ide ntify above, we looked into the quantities of each fuel type that would be required , and the infrastructure needed to deliver it. Figure 8 shows how the demand for hydrocarbon, electricity and hydrogen will change through the transition . For this, we assumed an end point of 90% hydrogen fuel used, and 10% electricity. In terms of capital costs, as above, the lowe st costs would be at 100% hydro gen; however , it seems likely that there will still be some demand for BEVs, so we created a scenario where 90% of the fuel was hydrogen. This results in an ultimate 400,000 BEVs, predomin antly cars and vans, and 2,600,000 FCEVs, including almost all buses and lorries . Figure 8 Energy demand from all fuels at the example point of 90% Hydrogen, based on the More Trucks, Fewer Cars case . Shown with the quantity of hydrogen fuel required. Note that the energy supplied va lues do not exactly match the intended fuel use proportion, due to the different thermodynamic efficiencies of FCEV s and BEV s. The driving force for the infrastructure development is the quantity of fuels needed of all types. Figure 8 shows how the demand for fuels will vary through the More Trucks, Fewer Cars case (the difference from the More Trucks, Same Cars and the Base Case is not significant). 0100200300400500600700 05,00010,00015,00020,00025,00030,00035,00040,000 2020 2025 2030 2035 2040 2045 2050Hydrogen required (kT/yr)Energy value of fuel (GWh/yr)Quantity of zero carbon fuels required Energy supplied by hydrogen (LH axis) Energy supplied by Electricity (LH axis)Quantity of hydrogen required (RH axis) Energy supplied by Hydrocarbons (LH axis) [Type here] Looking at the key early years, we see that by 2025 there will be a need for 25 kT/year of hydrogen and 41GWh/year of electricity – equivalent to (for example) around 5 large commercial vehicle scale refuelling stations of 7,500 kg/day , 100 introductory scale hydrogen car refuelling stations of 400 kg/day , and 4,200 public chargers of various capacities . The undiscounted capital investment cost to reach this point is estimate d to be around £250M. By 2030 this rises to 1 91 kT/year of hydrogen ( 40 large and 125 mid -sized refuelling stations of 2,300 kg/day) and 263 GWh/year of electricity ( 11,5 00 public chargers). Undiscounted capital investment to reach this point from the start is estimated at £950M . The ultimate requirement will be for 619 kT/year of hydrogen (e.g. 80 large plus 540 mid -sized refuelling stations) and 1,256 GWh/year of electr icity ( 20,500 public chargers), reaching this level by 2040 . The capital investment for this from the start of the programme is forecast at £2.0bn gross, or £ 1.1bn Net Present Value at a discount rate of 6% . For context, typical hydrocarbon fuelling stations deliver around 4.5 million litres per year (ranging from small stations of about 2 million litres/yr. up to 15 million, which is a large HGV refuelling facility). This is equivalent in useful energy to about 2,300 kg/day, or 0.85 kT/year , of hydrogen. Capital Expenditure Profile We then examined specifically the capital expenditure profile base d on three fuelli ng scenarios: (1) All electric (2) All hydrogen (3) The balance point , abo ve, between the two, of 9 0% hydrogen. These infrastructure requireme nts break down as shown in Figure 9. As above, this is based on the case More Trucks, Fewer Cars and a fuel split of 90% hydrogen and 10% electricity. [Type here] Figure 9 Annual capital expenditure through transitio n at three points: 100 % battery electric, 100% hydrogen, and optimis ed balance of 90% hydrogen, 10% battery electricity (optimised including fuel costs) . Annual expenditure on hydrocarbon fu elling is shown as an indicative comparison. This chart is based on the cas e “more trucks, fewer cars” . It clear from Figure 9 that even a modest increase in the amount of elect ricity used as vehicle fuel will result in a substantial increase in capital investment costs . It is also clear that the capital cost for constructi ng only hydrogen facilities will be close to the typical annual expenditure on refurbishing fuel filling facilities, suggesting that the capital outlay cou ld be managed substantially within the existing commercial refurbishment programmes. Note that Figure 9 does not include the longer term replacement of aging zero carbon refuelling infrastructure. 0100200300400500600 2020 2025 2030 2035 2040 2045 2050Annual cost, £MAnnual capital expenditure Capex for all -electric Typical annual expenditure on hydrocarbon fuelling infrastructure Capex for all -hydrogenCapex for combined at 90% hydrogen [Type here] Sources of Hydrogen and Electricity We made various assumptions about where hydrogen and electricity would come from . Electricity – over and above that currently produced – will be made by offshore wind. Hydrogen will in the short term be made from local electrolysis using grid supplied electricity, and in the long term will be made offshor e using electrolysis with wind generated electricity, piped to shore and distributed through the existing gas network (‘Green hydrogen’) . When produced at large scale, this is estimated to cost approximately £1.64 per kg delivered to shor e, equivalent to around 5 pence per kWh . This calculation is based on the method presented by Babarit et al26, with modifications to the inp ut data to reflect the more up to date cost information available. We also assumed that fuelling stations in areas with no local gas grid connection will continue to use grid electricity, with agreements about taking otherwise curtailed production. These methods produce no greenhouse gases at the point of generation , so we consider these the best environmental solutions. An alternative is to consider centrally produced hydrogen using Steam Methane Reformation (SMR) with Carbon Capture and Storage (CCS) of the associated carbon dioxide produced (‘Blue hydrogen’). This could also be done without CCS as a short - term interim measure – it would still release considerably less carbon dioxide than combustion of petrol or diesel in road vehicles. This might provi de a quicker way of producing enough hydrogen, at a cost potentially lower than green hydrogen production although at a cost of some potential leakage of carbon dioxide27. Other ways of producing hydrogen are in development at the research stage. It is also produced in potentially signif icant quantities as an industrial by -product for certain processes. These are not considered further in this paper. The total electricity requirement, for both electricity and hydrogen generation, could ultimately be provided by an offshore windfarm/s supplying around 25.9 TWh per year. This would be approximately equivalent to duplicating Scotland’s existing annual renewable electricity generation of 26.5 TWh8, or slig htly more than the current and consented offshore wind generation of around 22 TWh per year; offshore generation is anticipated to rise to around 53 TWh per year by 2030, given an availability factor of 226. A contribution to this might be drawn from curtailed wind generation; in 2019, 1.9 TWh of wind powered electricity generation was curtailed in Scotland28. [Type here] Discussion The Scottish Government’s targets of 75% reduction in emissions by 2030 and Net-Zero by 2045 will be challenging to meet, but t he technol ogy exists to do this at a sensible cost and within the required timescale. It is clear from our modelling and investigations that there will be a considerable benefit and cost saving in including a substantial proportion of hydrogen in future vehicle fuelling – indeed, decarbonisation of large vehicles (buses and heavy goods) will be almost impossible without it. The capital inve stment required will be considerably lower with more hydrogen used – moving from 100% electricity to 100% hydrogen should entail a capital cost reduction in the region of a factor of six – approximat ely £4bn reducing to approximately £700M . Even considering the slight ly higher cost of hydrogen as a fuel – a cost that wo uld be passed through to consumers – the whole system costs will be largely similar, at any proportion share between hydrogen and battery electricity. However, as the cost of fuel should in any case end up lower than the cost of petrol per km travelled (calculation shown in supplementary publication) , we consider that the cost of fuel is less important in this respect than the capital investment requirement. Furthermore, other cost factors, not incorporated into the model, will all move the overa ll cost further in favour of hydrogen. These include storage for operational flexibility, interseasonal storage, battery manufacturing, additional land requirement for battery chargers due to the time needed to recharge, value of peoples’ time spent refuelling / recharging , road damage due to heavier vehicles . In terms of storage costs, it is telling that in the medium to long term, J ülch 29 assesses that based on current research, the cheapest storage for electricity will be to convert it to hydrogen, store it underground , then convert it back to electricity when required. We do not, however, expect that a solution of 100% hydrogen would be a likely end position; there are some benefits to electric vehicles, and thousands are already registered. We continued our analysis on the basis of 90% hydrogen, 10% battery. Since total emissions through transition will be reduc ed with more hydrogen being used , it is also clear that capital cost in relation to the amount of carbon dioxide emissions mitigated through the transition period , that is £/kT CO2 eq. mitigated , will be substantially lower with increased use of hydrogen. This is also the case when considering the overall cost including fuel, as shown below in Figure 10 Total NPV and NPV related to mitigated emissions against fuel mix, for various discount rates. Constraints on large vehicles have been removed, allowing the hydrogen proportion to fall to near zero i.e. full electrification. Figure 10. [Type here] Figure 10 Total NPV and NPV related to mitigated emissions against fuel mix, for various discount rates. Constraints on large vehicles have been removed, allowing the hydrogen proportion to fall to near zero i.e. full electrification. We can see from Figure 10 that while the overall cost does not vary significantly with fuel proportion, the cost per kT of carbon dioxide mitigated through the transition becomes l ower as more hydrogen is used. Figure 10 also draws out two further sets of information. First, the general trend s in costs and emissions relating to fu el mix (curtailed at around 45% through out the results section above) do continue to the point where almost everything is battery electric. Second, we can see the effect of changing the discount rate assumed in the NPV calculations – moving fro m the 6% figure actually used in most of the model to a conservative 1%, we see tha t the NPV estimate increases by a factor of around 2.5. We can also see that the trend of the total NPV moves to slightly increasing with more hydrogen at very low NPV values. However, the variability is low and we consider that at all discount rates, th e NPV can be considered constant within the limits of accuracy of this model. Relative to emissions mitigated, however, the trend is always to a lower cost per kT emitted with more hydrogen. Beyond the simple system cost and transition emissions, it is im portant to consider the ease with which the transition can be implemented. We considered a number of ‘soft factors’ which would affect the practicality of the transition. These are illustrated in Figure 11 below. £0£30,000£60,000£90,000£120,000£150,000£180,000 051015202530 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%NPV/kT CO2eqTotal NPV (£bn) Hydrogen proportion of zero carbon fuelsTotal NPV and Total NPV/Emissions against fuel proportion, various discount rates NPV/kT CO2 eq. at 1% disc. rate (RH axis) NPV/kT CO2 eq. at 3.5% disc. rate (RH axis) NPV/kT CO2 eq. at 6% disc. rate (RH axis)Total NPV at 1% disc. rate (LH axis) Total NPV at 3.5% disc. rate (LH axis) Total NPV at 6% disc. rate (LH axis) [Type here] Figure 11 Non-modelled characteristics – Soft Factors showing the differences in the harder to quantify factors that will make a big difference to the acceptability of the new fuelling systems. These factors are expanded further, with