DOE to issue up to $4B in loan guarantees for energy & efficiency projects tackling GHGs; drop-in biofuels a key area
BioAmber receives C$7M grant from SDTC; switch to 2nd gen yeast

Report finds progress in UK Low Carbon Emissions Bus uptake, but a need to review incentives

Despite the recent uptake of low carbon emission buses (LCEBs) in the UK, significant barriers remain to sustained market growth, and there are risks of current progress being disrupted, according to a new report prepared for the UK LowCVP by Transport & Travel Research Ltd, in partnership with TRL.

LCEBs are defined as vehicles producing at least 30% fewer lifecycle greenhouse gas emissions than a current Euro-III-equivalent diesel bus of the same total passenger capacity. The well-to-wheel greenhouse gas emissions, expressed in grams of carbon dioxide equivalent measured over a standard test, take into account both the production of the fuel and its consumption.

The report, “Barriers & Opportunities for Low Carbon Emission Bus”, based on surveys of operators and stakeholders, set out to identify the barriers and drivers to expanding the UK LCEB market, and to propose support mechanisms to stimulate further growth. As part of the report, the authors assessed the potential market uptake of a range of low carbon technologies, including the resulting emission savings.

Drivers. The authors found that current incentive mechanisms have been vital to the growth of the market. The Government’s Green Bus Fund (GBF) and enhancements to the Bus Service Operators Grant (BSOG) paid on a per liter of fuel basis—which includes an enhancement of 6 pence per km (ppkm) for qualifying LCEB—have been key mechanisms driving the introduction of LCEBs.

Uptake has also been helped by the relative ease of adopting new technologies, and confidence in reliability of vehicles.

Barriers. The report identifies a number of barriers affecting the further take up of LCEB. Among these are the high purchase price of vehicles due to additional technologies and high cost of components for bus manufacturers and technology developers, influenced by the limited volumes from the UK market alone.

Other barriers related to specific technologies include infrastructure requirements for gas bus refueling and battery electric bus recharging; cost and replacement concerns over energy storage (i.e. batteries); the requirement for specialist maintenance, in some cases; and constrained range of passenger capacities, for some types of LCEB.

Existing incentives. While existing support mechanisms have been important in stimulating the market, the authors found a number of issues in this area as well:

  • Capital grant competitions have uncertain outcomes. Combined with fixed timescales that may conflict with bus operator investment plans, these mean a higher level of effort for applicants and also undermine careful planning.

  • The 30% carbon reduction target to gain LCEB status is potentially stifling ambition in the LCEB market with anecdotal evidence that the most cost effective approach is to do just enough to cross the 30% threshold, rather than keep improving fuel efficiency through investment in any additional components or packages. There are also lower cost options for gaining a lower degree of benefit that may be appropriate, particularly for in-use vehicles.

  • Total removal of BSOG might stimulate fuel efficiency measures (and stimulate interest in LCEB), but may also reduce levels of available investment for new vehicles.

Take-up rates. A key factor in making a business case for LCEB adoption is the speed in which the additional investment costs will payback through reduced running costs. The study gathered information from operators, including the consolidated view of two major operating groups, that indicated acceptable payback times in years for the additional investment in LCEB. The mean values for each type of LCEB were between 5.5 and 7.5 years.

Given payback timescales in this range, interest in considering a range of technologies as candidates for investment ranged from 10% to 20%. There is a difference in which technologies are of interest at this payback rate, with hybrid being more favored and gas the least (but still with some interest). Electric and flywheel both registered take-up rates of around 13%.

If the payback is considered at yet shorter timescales of 5 years, the analysis found the rates of uptake (or, strictly, consideration for investment) by the market varies by technology, with: flywheel (65%), electric (56%), gas (50%) and hybrid (85%).

However, because a 5 year payback may be already achievable for some of the technology options in the current incentive environment this does add an additional factor: some of the seemingly less ‘desirable’ technologies (flywheel, gas) might in fact higher uptake because they can deliver the payback rate desired by a significant proportion (> 50%) of operators. A factor feeding this response may be operators expectation of payback times, as they will be aware of the potential of the lower cost technologies.

—“Barriers and opportunities to expand the low carbon bus market in the UK, Task 3”

Recommendations. The authors recommend that incentive mechanisms supporting both the capital and running costs for LCEB should continue in a revised format in order to encourage further growth in the LCEB market. They proposed a graduated scale incentive scheme related to carbon savings to ensure a fair and technology neutral approach and to encourage the take up of a wider variety of LCEB technologies.

This would also help to avoid any stifling of ambition to achieve greater reductions than the current 30% threshold for well-to-wheel greenhouse gas emissions which presently defines a low carbon emission bus.

Accompanying this central recommendation is a response that industry representatives favor an incentive based on running costs which stays with a vehicle for its life to support the second-hand market for LCEBs given the typically long service life of bus fleets.

The study also finds that awareness of the performance of LCEBs needs to be increased to improve knowledge and confidence of bus operators in purchasing new technologies. The LowCVP aims to address this issue by holding a Low Carbon Bus Symposium early next year to bring together bus operators, manufacturers and local authorities to share experience in the performance, environmental and economic benefits of LCEB.

The study also recommends that consideration should be given to providing incentives for the introduction of gas and electric charging infrastructure for bus fleets. This would give greater opportunity for the introduction of these technologies with the potential for deeper cuts in carbon emissions and running costs.

Comments

The comments to this entry are closed.