Verpoort, P.C., Gast, L., Hofmann, A. et al. Impact of global heterogeneity of renewable energy supply on heavy industrial production and green value chains. Nat Energy 9, 491–503 (2024)

Objective:

• Present quantitative insights into the renewable pull by estimating the energy-cost savings and competing effects for the green value chains of three major basic materials

Case:

• Germany

Methodology:

• Production cost: $LCOP = \frac{ANF \times CAPEX \times FOPEX}{OCF} + VOPEX + \sum_k d_k \times p_k + \sum_g d_g \times tc_g$

Data Source

• Technology: Potsdam Open-Source Techono-Economic Database
• Shipping transport cost: UNCTAD

Findings:

• The magnitude of the renewables pull is most strongly influenced by regional differences in electricity price
• The full relocation saving spread across a broad range of 9-60%

• A large share of energy-cost savings is associated with relocating electrolysis
• Resorting to imports of intermediates (directly reduced iron, NH3 and methanol) would cover almost all relocation savings, indicating little cost incentive for further relocation beyond import of intermediates

Coding Reference:

• Python