Global value chains for local energy systems

A transition to an electricity system based on solar and wind power and a range of new energy conversion and storage technologies will shift the geopolitical and environmental concerns from fuel supply and combustion to the entire value chain of energy devices. The aim of this project is to monitor and analyze the temporal evolution and spatial distribution of these value chains by compiling datasets of global product flows. This is done to inform technology developers and policymakers about supply risks, environmental impacts, and potential geopolitical concerns.

The energy transition and the importance of value chains

The shape of electricity systems is changing. The configuration that evolved over the 20th century, where fuel-based power plants supplied electricity to passive consumers in national grids, is now slowly transforming across the globe into systems primarily based on solar and wind power. In these new systems, varying supply and demand could be balanced at higher levels in continental or global grids, or at lower levels in smart distribution grids, or even at the level of individual households, enabled by novel forms of power electronics, information and communication technology, and energy storage systems (ESS). An implication of this is that many of the geopolitical and environmental concerns once mainly centered on fuel supply and combustion, now shift to the entire value chain of energy conversion and storage technologies.

This shift increases the importance of life cycle assessment (LCA) as a tool for evaluating and comparing the environmental impact of different systems and technologies. The rising geopolitical tensions in the world, and the supply chain interruptions in the aftermath of the Covid pandemic, further stress the importance of studying the spatial shape of evolving value chains. Earlier studies have shown that, if not given proper attention, the speed of the transition may be hampered by metal resource scarcity, lack of skilled labor, limited financial capital, or backlash due to social, environmental or political concerns related to different parts of the value chain. At the same time, the path taken will determine the distribution of benefits and costs over the globe.

Theoretical positioning and potential contribution

Within the discipline of Innovation and Transition Studies, tools have been developed to describe and analyze industrial transformation. The more precise shaping of industries, or “sociotechnical systems”, in technological, social and spatial dimensions needs further investigation. There is a demand for a “morphology” of sociotechnical systems that more concretely describes the forms of different production and consumptions systems: what value chains they are defined by, what process steps and social and material resources they depend on, and how they stretch across the globe.

Within the discipline of Industrial Ecology, the value chain perspective has always been at the forefront. The “lifecycle” in lifecycle assessment refers to the value chains of a production system. Over the last decade, there has been an increasing amount of work dedicated to what is now called “prospective LCA”, i.e. the study of the future potential environmental impact of novel technologies and value chains in the becoming. More attention is also paid to the geographical dimension of life cycles, but the application of regionalized data is still rudimentary and somewhat arbitrary. A more nuanced description of the potential global impact of emerging technologies would require new methods with the capacity of combining prospective LCA with regionalized data.

New data sources

In this project we aim to explore new data sources to map and analyze global value chains. Hitherto, trade data has not been used to outline the spatial shapes of emerging industries in any of the two research traditions outlined above. Some preliminary work has shown that this could be a promising pathway and potentially open new fields of research in both Innovation and Transition Studies and Industrial Ecology.

Involved in the project

Project leader: Professor Björn Sandén; Co-supervisor: Associate professor Rickard Arvidsson (in the first phase research professor Anders Nordelöf); PhD candidate: Chunshuo Ge

Partners

Västra Götalandsregionen, Volvo AB, Hymeth, Soltech, Nilsson Energy AB, SAFT AB

Funders

The Swedish Energy Agency, Västra Götalandsregionen