Select Committee on Environmental Audit Written Evidence

Memorandum submitted by Sustraco Ltd


1.  Progress by the DfT

  This can presumably be established by reference to the relevant statistics.

2.  Coherent strategy

  To an outsider there appears to be no evidence of any coherent DfT strategy for reducing carbon at all, let alone one that stretches across the entire range of DfT activities. In fact just the reverse seems to be true, as the following points illustrate:

    —  The DfT is responsible for the Bus Service Operators Grant, which donates £1 million per day subsidy to buses by reducing the cost of their diesel fuel. This subsidy seems to contradict Government's policy of promoting energy efficiency and actively encourages transport emissions.

    —  The criteria under which DfT awards funding for LTP projects are weighted so that "accessibility" receives 30%, "safety" receives 25% and "air quality" (pollution) only 5% weighting. This gives out a clear signal to local authorities that pollution and carbon emissions are not important to DfT. This is particularly ironical since toxic emissions from transport's burning of fossil fuels are officially responsible for the "premature mortality" of no less than 24,000 people a year, as compared with road safety accidents which account for 3,200 deaths. This means that emissions are more important to "safety" than the issues normally addressed under that heading, such as reducing traffic accidents. It also makes zero emission transport a prime example of a "no regrets" climate change policy.

    —   The public pronouncements of the Minister for Transport constantly stress the priority which he gives to supporting urban diesel buses, rather than light rail, despite the fact that buses are themselves a major source of pollution (cf Oxford Street, London or Carfax, Oxford) and require at least three times as much energy (ie fuel + pollution) to do the same job as a similar sized light rail vehicle. The Minister recently called for a "model guided bus system" to be developed to replace the Leeds tram project for which he refused funding, rather than calling for innovation to reduce the cost of light rail. He also found time to attend the launch of the absurd "ftr" or "bus that thinks it's a tram", whilst apparently being too busy to discuss innovative, low-cost, zero-emission electric trams that have been already demonstrated successfully to the public over a number of years.

    —  numerous Government grant schemes are in operation for reducing carbon emissions from "road transport" (eg Low Carbon Vehicle Partnership, New Vehicle Technology Fund, Foresight Vehicle, Energy Savings Trust transport schemes, Low Carbon Bus Programme and "other important initiatives" referred to in the PFV report). The DfT definition of "road transport" is however unique in that it excludes trams, even though trams have been running on roads all over the world for two centuries and are everywhere in direct competition with buses. Repeated efforts to get the DfT to provide an explanation for their arbitrary exclusion of innovative light rail from all these programmes have been unsuccessful. The result is that innovative, electric, zero-emission light rail vehicles have been officially discriminated against, by comparison with inefficient diesel buses.

    —  The DfT seem unwilling to acknowledge the established fact that vehicles on steel wheels, running on steel rails, are three times as energy efficient as similar capacity vehicles running with rubber tyres on tarmac. Adapting buses to run on rails can thus provide the "step change" in energy efficiency in transport, called for by the Cabinet Office in their White Paper on energy—even diesel powered light rail vehicles would be able to effect this "step change" in reducing carbon emissions.

    —  Trams have been proven to be far more popular than buses all over the world. They are therefore likely to create a much greater degree of modal shift from cars to public transport than can be achieved with buses. By doing so they can make a double impact on emissions.

    —  DTI and DfT both claim, at Ministerial level, that innovative, low-cost light rail is eligible for funding under existing grant programmes. But at official level this is acknowledged not to be the case. There are currently no grant funds available, for example, to support the development of a prototype hydrogen fuel cell powered tram, even though all the necessary technology is available. Such a vehicle could be as much as ten times more efficient than the fuel cell powered CUTE buses running in London, which cost over £1 million and were paid for by EU and the Government. This represents a serious misallocation of limited R&D funding. Its development is currently blocked by lack of Government support which effectively also acts as a barrier to private funding.

    —  The National Audit Office, in their report on light rail published in April 2004, recommended on page 11 as follows:

      "The Department (for Transport) should bring this report to the attention of the Department of Trade and Industry and the Energy Saving Trust, for them to consider the case for including the developers of light rail technologies as eligible recipients of grants for energy savings technologies." On page 8 it states that "there are barriers to the development and adoption of new and cheaper technologies. For example there are no government grants available to develop innovative, energy saving light rail technologies" and later, the Department "should also consider the case for establishing its own grant scheme to promote and develop innovative light rail technologies as a means of supporting the government's objective to reduce greenhouse gas emissions through cleaner vehicles".

    Despite repeated efforts to obtain a response from DfT and DTI both Departments have refused to act on these NAO recommendations whilst declining to give their reasons for ignoring them. The result is that light rail has been discriminated against whilst generous support has been lavished on subsidising buses and bus development, with negligible effect on pollution as compared with what could have been achieved by channelling the funds into innovative light rail, with its far higher levels of energy efficiency, public popularity and hence modal shift.

    —  The DfT claims that it does not have funds to support innovative low-cost light rail projects. Innovation, they say, can only be introduced by local authorities. But the DfT does not require local authorities to invite bids for supplying transport systems without specifying the technology to be used, so that technologies can compete with each other. Thus if a local authority such as Luton insists that it wants to replace existing rail track with a guided bus system there is no way to compare this with an Ultra Light Rail system, even though the former would cost £78 million as compared with £24 million for the latter, according to figures revealed only because they were given in evidence at a Public Inquiry.

    —  Local authorities will only purchase vehicles that have been proven in service, but since public transport vehicles can only operate in service if they are chosen by local authorities, this constitutes an effective official "Catch 22" barrier to innovation in public transport.

3.  This is a point on which the Department is probably best able to comment.

4.  Carbon reduction targets for 2010 and 2020

  It is suggested that the DfT needs first to make a realistic market assessment of the kind of public transport system which the public prefers. This is because the first rule of successful marketing is always to find out what people actually want and then offer it to them—swimming with the tide rather than against it. There is already plenty of international evidence available from reputable independent consultants, such as Carmen Hass-Klau, to show that higher levels of modal shift are achieved by tram systems than by buses. There is also ample evidence that the marginal cost of successfully increasing urban bus patronage, in places such as London, is extremely high. There is also proven evidence that innovative low-cost light rail can provide tram systems in towns and cities at a cost of no more than £2 million per kilometre, as compared with five times that amount for Conventional Light Rail. It is suggested therefore that DfT should initiate a phased re-allocation of bus subsidies into the development of low-cost light rail, to provide popular, zero-emission, modern public transport systems. Not only would this save money and increase public transport patronage but it would also constitute a significant first step towards meeting the rapidly approaching crisis when fossil fuel prices and availability enter a period of extreme volatility before being exhausted. We neglect energy security at our peril. Planning an orderly and economical transition process from fossil fuels to alternative energy sources will take many years and it is suggested that it needs to start now.

  Five specific steps to reduce carbon emissions—these should include the following:

    —  reclassification of road transport to include light trams designed to run on roads as well as on segregated routes. This will at least create a level playing field between buses and trams

    —  phasing out of Bus Service Operators Grant to encourage clean, energy efficient vehicles

    —  phased switching of bus subsidies generally towards innovative zero-emission light rail

    —  increased weighting to be given to air quality in LTP assessment and a serious public health campaign initiated to tackle air quality in co-operation with the Department of Health

    —  reappraisal of existing evidence that trams are more popular with the public than buses, backed by a new study of the public transport market in UK, if this is thought to be necessary

    —  initiation of a strategic DfT plan for gradually phasing out reliance on fossil fuels, taking into account the fact that there is now a consensus of oil experts that world production of oil will peak between 2008 and 2020—if it has not peaked already

    —  priority to be given in all considerations of "safety" to the public health issues arising from toxic emissions from traffic, rather than just from traffic accidents

    —  implementation of the NAO recommendation for either DfT or joint DfT/DTI grant funds for developing and demonstrating innovative light rail

    —  initiation of a joint DfT/DEFRA policy for the production of Renewable Natural Gas (methane) from organic wastes and a programme of incentives for its use as an alternative transport fuel, thus reducing the release of methane into the atmosphere and at the same time integrating transport with waste recycling, thereby avoiding special cultivation of expensive, energy intensive fuel crops which take up scarce land and water

    —  introduction of new public procurement rules which ensure that local authorities call for transport system tenders without specifying the technology to be used. This will allow promoters of innovative low-cost light rail to tender in competition with guided bus and conventional light rail so that DfT obtains lowest pollution as well as best value for money

    —  Priority to be given in DfT funding awards for (a) value for money (b) energy efficiency of vehicles and c) clean operation so that more attention is given to reducing emissions.


Adequacy of PFV Targets

  Since these targets did not apply to the most energy efficient form of transport, namely trams designed to run on roads, they were plainly inadequate. Refusal to acknowledge the superior energy efficiency of railed vehicles has cost, and is costing, Government many £ millions in wasted time and effort. Since rail vehicles require only a third as much energy as vehicles with tyres to do the same job it is an obvious waste of money to apply new technology, such as hybrid drive-trains/fuel cells, to inefficient buses.

Adequacy of funding and coordination between funding sources

  Most funding sources, such as LCVP or EST, claim that they have inadequate funds even to support their favoured buses. It seems therefore that not only is there a need to divert funding from buses to more energy efficient light rail but also a need to increase the absolute amount of money available. In this respect it would seem sensible for the DfT and DTI to learn from the delegation which DTI funded to visit Japan in 2004 to find out why the Japanese were so far ahead of UK in developing fuel cell powered transport. One of the delegation's main conclusions was that the Japanese Government policy of awarding 100% grants for demonstrations of innovative vehicles, at all the different stages leading up to the market, provided the principal incentive for bringing new technology to the market. Even a modest 5% of the amount spent annually on the counter-productive BSOG, would be enough to revolutionise UK's public transport by paying for demonstrations of popular new forms of public transport, which can operate with maximum energy efficiency and zero pollution. Such systems are ready to go but can only do so if they receive official support from the public sector, which controls all public transport.


Introducing Fuel Cells to the Commercial Public Transport Market

  Fuel cells are now recognised as the key technology in the process of weaning the modern world from its dependence on fossil fuels and leading it into a new age of hydrogen energy. The principal obstacle still to be overcome is the high cost of fuel cells. In transport, for example, one kilowatt from a fuel cell costs $3,000, compared with $30 per kilowatt for an internal combustion engine. Somehow a reduction of two orders of magnitude has to be achieved if fuel cells are to compete with alternatives in the commercial market for transport.

  There are two complementary approaches to achieving this reduction. The first and most obvious is to increase the efficiency of the fuel cell in producing electricity from hydrogen. But producing electricity is not an end in itself. It is rather a means to enable us to achieve the end objective, which is to provide people with useful services such as heat, light and mobility. The cost of mobility can therefore be reduced just as much by increasing the energy efficiency of the system in which the fuel cell is used, as by increasing the efficiency of the fuel cell itself.

  Ultra Light Rail is a transport system designed to eliminate the two orders of magnitude gap between the fuel cell and the internal combustion engine. The first step is to increase the efficiency of the vehicle system in which the fuel cell is used. This can be done in a number of ways but the most dramatic "step change" in energy efficiency can be achieved by using a vehicle running with steel wheels on steel rails. This immediately reduces the energy requirement by a factor of three, since the lower rolling resistance allows a tram to use only one third of the energy required by a similar sized bus.

  Further cost reductions in the vehicle system can be achieved by introducing an on-board energy storage system in a hybrid electric drive train, similar, in principle, to that used in the Toyota Prius and other cars and even in some buses. This makes possible a lower rating for the prime on-board power source which is required only to run at its optimum level, in order to keep the energy storage system topped up. It also allows for the energy from braking to be recaptured and used, rather than dissipated in heat vented to the atmosphere. Still more efficiency can be introduced by integrating the electric motors into the wheels. The overall weight of the vehicle can be reduced by each of these innovations whilst the body itself can be manufactured from carbon fibre composite materials in a monocoque form. The whole process, using standard proven technology, creates a spiralling cost reduction, resulting from each innovative feature.

  Using only some of these features, recent practical test work carried out by Sustraco Ltd, with support from a Carbon Trust grant, has shown that a 25 kilowatt fuel cell would be sufficient to power a light tram with similar capacity to the fuel cell buses currently running in London under the EU's CUTE programme. These buses are doing an invaluable job in demonstrating to the public that fuel cells are no different to internal combustion engines in performance and safety. However the buses themselves are grossly inefficient in commercial terms, costing, as they do, some five times as much as a similar diesel bus and requiring 250 kilowatts fuel cell to operate them. The next logical step in commercialising the operation of fuel cell powered public transport vehicles must therefore be to integrate the fuel cell into an energy efficient tram. This will eliminate one order of magnitude in the cost differential.

  Eliminating the second order of magnitude involves engineering down the cost of the transport system within which the vehicle operates. Conventional trams are, in effect, railway trains only slightly adapted to run on roads. Using overhead continuous electrification they have to earth the current through the rails. This necessitates underground insulation and removal of utility services from under their path. The excessive weight of the trams, together with their insulation needs, means that heavy rails and a massive substructure are required. Ultra Light Rail, using bus-type vehicles adapted to run on rails, does away with this needlessly expensive infrastructure. A further significant cost saving arises from the superior durability of trams which normally have a life of 30+ years as compared with 8-13 for buses. This has environmental advantages as well as sharply reducing the amortisation cost of operating trams as opposed to buses.

  Installing an on-board power source allows the ULR system to eliminate continuous overhead electrification and the insulation that goes with it. The reduced weight of the tram means that light rail can be used, which is easy and relatively cheap to install and also to move when road excavations are necessary to service utilities, which do not need to be moved. Light temporary track can easily and quickly be laid for diversions.

  ULR is designed to be the natural, zero-emission, next-generation successor to the diesel bus as fossil fuels are phased out. The passenger capacity of the trams is therefore designed to be similar to the standard city buses currently in operation all over the world. Rather than increase the size, weight and obtrusiveness of the public transport vehicle it is often preferable to use vehicles with a passenger capacity of around 100 people, plus or minus 50%. As pedestrianised areas are extended in city centres less obtrusive, pedestrian-friendly trams will increasingly be in demand. Passenger capacity can most easily be increased, with maximum flexibility, by increasing the frequency of the service, which is not a problem on a tram track. A 100-passenger tram every three minutes is more convenient and popular than a 200 passenger tram every six minutes. The extra driver cost provides additional employment and contributes more to the local economy than amortising heavier hardware. However much larger capacity vehicles can be developed, observing the same principles, at a substantially lower cost than Conventional Light Rail (CLR).

  All these features, which differentiate ULR from CLR, result in massive savings in infrastructure costs. Typically a ULR system can be installed at a cost of around £1 to £1.5 million per kilometre as compared with £10 to £15 million per kilometre for CLR systems. This eliminates the second order of magnitude and delivers a public transport system which is non-polluting, popular and low-cost, with essential flexibility in carrying capacity.

  Light, zero-emission trams with on-board power generation can be used under cover, inside buildings such as stations and shopping malls, where buses cannot penetrate. A major advantage in planning to replace buses with light trams is that it does not involve persuading the public to accept a new unpopular transport system with which they are not familiar. On the contrary the reverse is true, as trams are universally more popular with the public than buses, as market studies around the world have shown. This popularity is conducive to higher levels of modal shift as people are more willing to leave their cars behind and travel on the tram system. This in turn has a positive knock-on effect on property values, which can be used to facilitate the funding of city regeneration projects.

  ULR is designed to bridge the current cost gap between internal combustion engines and fuel cells by using standard production fuel cells more efficiently, rather than waiting for fuel cell prices to come down. However, as they do come down, ULR systems will simply become even more economical.

February 2006

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