Examination of Witnesses (Questions 248-283)
PROFESSOR JULIA
KING, MR
GREG ARCHER
AND DR
STUART HILLMANSEN
21 OCTOBER 2009
Q248 Paddy Tipping: Welcome to Professor
King, Dr Hillmansen and Greg Archer. This is an inquiry about
moving towards a low carbon economy. I am very grateful for the
submissions that you have already made. Perhaps we could start
by having a discussion about the fiscal package that the Government
has introduced, the stimulus package: how far it really is green,
whether there is a green element to it and how far transport and
the transport sector has benefited from that. Professor King,
would you like to start, please?
Professor King: I am probably
going to overstep the fiscal stimulus package. I am somewhat concerned,
for example, about the scrappage scheme because it was introduced
without a requirement on new cars being, for example, at least
below the 130 grams per kilometre, which will be the new European
Union requirement for 2015, and there is evidence from a number
of studies, including a recent study from the International Transport
Forum in Paris, that show that scrappage schemes which are introduced
without a stiff limit on CO2 for the new vehicles purchased
actually contribute to additional CO2 emissions. I
think that was extremely disappointing. The Committee on Climate
Change advised the Government that they should put a limit, but
that was not put in place, and I think the calculations that the
Committee on Climate Change has done on the current scheme show
that actually it looks as if consumers have bought relatively
low emission cars but, even so, it is unlikely to be a net benefit
for CO2, and that is an opportunity missed. I think
the support to the car industry for reducing their emissions and
for producing lower emission models is a good thing. The 230 million
in support for electric vehicles from 2011 onwards is good, but
you may see in the Committee on Climate Change report we do not
think that is anything like enough because we are trying to radically
change an industry that has been doing cost reduction for the
last 100 years. The new technologies we would bring in have not
had the benefit of that. The batteries in the first vehicles will
be extremely expensive, and we have suggested that the figure
needs to be, realistically, more like about 800 million and, indeed,
that we should be looking at a scheme that starts with quite significant
subsidies, which might need to be 10,000 plus per vehicle, which
then tail off as vehicles get cheaper and the industry becomes
more established.
Q249 Paddy Tipping: Mr Archer.
Mr Archer: I think what we need
to understand is that the scrappage scheme was introduced primarily
in order to support the UK motor industry because of the pressure
that it was under, and it has certainly been effective in raising
sales: 181,000 sales so far during the period. I think there is
also some good evidence now emerging that the vehicles which have
been purchased under that scheme are not only more efficient than
the vehicles which have been scrapped, as you would expect because
they are 10 years younger, but they are also more efficient than
the vehicles which are bought on average within the UK. So what
we have actually seen is cars bought under the scrappage scheme
are averaging 134 grams per kilometre, whereas the average for
the UK this year is 150 grams per kilometre, and I think, inevitably,
the scrappage level at £2,000 is likely to encourage people
to buy smaller vehicles more than it is going to encourage them
to buy larger, more expensive vehicles by the nature of the economics.
I think the type of proposal that Julia and the Climate Change
Committee made would have, undoubtedly, strengthened the carbon
benefits which came from the scheme, but overall I think you can
probably see that the scrappage scheme has probably lowered UK
new car CO2 emissions by one to two grams per kilometre
more than it would have done otherwise according to the calculations
that are being made, which is not a big effect by any means but
is a small effect. I think you can also note that there will have
been sizeable air quality benefits as a result of that. The other
point to make is that, more generally, the green stimulus package
had very little by way of measures to support low carbon transport
in general, and the Automotive Assistance Programme, whilst again
it was not specifically designed to give green benefits, has certainly
had some green benefits. For example, the only money spent to
date through that Automotive Assistance Programme is £10
million for the TATA Technology Research Centre in Coventry that
will be building some electric vehicles in the future. From that
point of view there are some green benefits which have come from
what might be considered direct economic stimulus.
Dr Hillmansen: As you will have
gathered from my submission, I am going to put a railway view
of the world to you today. In terms of the green stimulation packages
that have been offered, these are, in my view, supporting emerging
low carbon technologies, also supporting traditional ones, like
wind turbines and other renewable energy sources, and also supporting
our traditional environmental sectors, like reducing pollution,
and so on. What I would say of the railways is that it is a system
which integrates lots of these things together, so it will gain
benefit from all of those packages. One of the things I would
like to talk about perhaps in detail in later questions is how
electrification and the increasing decarbonisation of our grid
mix is going to help the railways both in terms of reducing the
primary energy used and improving efficiencies.
Q250 Paddy Tipping: The Obama administration
has got a lot of political credit for a green new deal. Do you
think there is a green new deal here in the UK?
Professor King: I am sorry; I
did not hear who that was directed at.
Q251 Paddy Tipping: Any one of you.
Just pitch in. Everybody else does here.
Professor King: I think there
is a lot of good intent. We have got some coming from DECC and,
indeed, other departments. I think what we are lacking at the
moment is real delivery. I think real delivery is going to cost
rather more money than anybody is mentioning being put into any
of these schemes. It is corny to say, but we have spent an awful
lot of money on the banks. It would be good to see us spending
even a fraction of that on really trying to develop the green
economy in the UK. We see the Japanese Prime Minister announcing
that is their ambition in Japan, we see all of the other developed
countries starting to announce these sorts of things, and if we
do not start to invest serious money in this I really think we
will be left behind.
Mr Archer: I think the scale of
the green measures which were announced is just a tiny fraction
of UK GDP and is, indeed, much lower than the fraction which is
being allocated in other countries which had similar green stimulus
measures. Probably the highlight would be what has been happening
in the US, particularly in South Korea, where they invested £1.2
billion in low carbon car technologies and the overall value of
their green stimulus was 2.6% of GDP rather than .00 something
which has been calculated for the UK. What I would say is that
the support that has gone to the motor industry, I think, has
helped particularly the supply chain companies during the period
where there were quite long shutdowns of manufacturing facilities,
and it is really important that we retain a strong automotive
sector in the UK so that we can actually benefit economically
from the low carbon technologies which will be emerging over the
next 10 to 20 years and be at the forefront of those initiatives.
So the fact that we continue to support the motor industry during
this difficult period and will continue to do in the future will
pay dividends in terms of the investments that those companies
are able to make in supporting low carbon technology in the future.
Q252 Paddy Tipping: Presumably, Stuart,
you think there ought to be more investment in rail.
Dr Hillmansen: Absolutely. I would
just say about the railway industry, a number of years ago there
was some interesting research published which questioned the environmental
credentials of the railway and at that time I think the railway
industry did not have sufficient data to robustly defend itself,
but in recent years that has certainly changed, and now certainly
all the colleagues that I see and speak with in the industry understand
that this is an important issue for them. Certainly it is something
that the passengers are expecting to know about as well and is
often used in marketing information and so on about the CO2
content of a particular journey. I think the railway industry
is taking it very seriously at the moment and trying to get a
good understanding of its total CO2 emissions, which
is good news. I think generally rail is ahead of other transport
modes, but they are certainly not complacent about things like
electric vehicles and so on catching them up. I think there is
a positive future in that sense.
Q253 Judy Mallaber: Picking up on
what Greg has said, and bearing in mind your comments on the programmes
brought in by other countries, do you think that if we act now
there is a potential export market for low carbon vehicles or
are other countries' programmes going to limit it and we are,
therefore, in danger of importing technology instead of adding
to our export market?
Professor King: I think there
are some real opportunities for us. The introduction of some radical
new vehicle technologies to a degree is going to disrupt the conventional
players, and we are seeing in the electric vehicle market some
niche players, for example Tesla in the US, who have been working
with Lotus in the UK, appearing with new offerings which look
as if they could be quite successful in some of the niche areas.
We have also seen that what we have done in the UK in things like
the low carbon vehicle demonstration project, which is now running
and which by next year will have 340 ultra-low carbon vehicles
across a small number of cities in the UK, have attracted the
world's attention to us and the announcement of that was followed
quite rapidly by Toyota's announcement that we would be one of
the first two countries in which they would be building the new
Prius and then the Nissan announcement that they would be bringing
battery manufacturing to the UK and potentially also their electric
vehicle, the Leaf, to be manufactured in the UK. I think our situation
is that we have to recognise, as Greg has mentioned, that we are
a very important supply chain player in the UK but we do not really
have very much OEM activity, apart from the rather niche luxury
vehicle market. The requirements for us going forward, I think,
are to make sure that our supply chain is well positioned to adapt
to the new technologies that will be needed in vehicles of the
future. For example, we make 30% of the engines for cars for Europe.
If the direction is going to be that we are all moving to plug-in
hybrid vehicles which essentially have a battery and a range extender,
then actually that supply chain needs, to a degree, to change
the skills and its capabilities in order to be in the range extender
engine market and, indeed, in some of the integration electronics
markets rather than just in the large highly efficient internal
combustion engine area. I am not sure that we are going to grow
any new car companies, new OEMs—it would be great if we
did—but we do have a very strong supply chain which we absolutely
need to make sure has the opportunity to retain its strength and,
hopefully, grow. We have some real areas of expertise. Greg is
probably more of an expert on some of those than I am.
Mr Archer: I think what I would
say is the Government has announced £400 million of investment
in low carbon vehicles over the last year or so. When I started
in my current job five years ago it was spending a few million
pounds a year, and that, I think, shows the rapid scale-up in
investment that has been made, but other countries are making
similar and even larger investments. I mention Korea, but the
US has invested $600 million through federal procurement in EVs,
another $400 million for states, a billion dollars in advanced
battery technologies, and 25 billion to their automotive industry,
although that is clearly not all for green measures. Germany has
announced €500 million to support advanced battery technology
and infrastructure. France, a few days ago, came out with 14 Commandments,
which are designed to kick-start electric vehicles, following
some large investment announcements prior to that. So there are
countries all over the world now gearing up in a major way to
respond to the new low carbon vehicle market which is emerging
but, having said that, there are some genuine areas in which the
UK has real world leading expertise. I would highlight particularly
electric vans, where we have companies like Smith and Modec who
are supplying around the world. We have tremendous expertise in
the power electronics industry. Power electronics is extremely
important in getting the best out of the battery. Companies like
Zytek, Ricardo and Lotus Engineering, for example, are doing huge
amounts of work in this area, and we have now got a lot of good
initiatives with Nissan in the North East with their new battery
plant, the possibility of bringing the Leaf manufacture into the
UK and the Auris hybrid, which Julia mentioned, is now going to
be produced by Toyota in Burnaston. So we have actually made a
really good start. What we need to do is realise that we are not
going to outspend a lot of these other countries, but what we
can do is make our money work smarter by getting people to work
more effectively together, and I think the initial ultra-low carbon
demonstration programme that brought together cities, manufacturers
and the RDAs in integrated programmes is a really excellent start
in doing that, and the concepts of Test Bed UK, which have been
proposed for piloting and demonstrating a range of new low technologies,
is starting to get the UK noticed in a way that it had not been
before. These are positive steps.
Professor King: I think one thing
Greg and I would agree very strongly on is that we see the formation
of the Office of Low Emissions Vehicles as a potential real opportunity
here, but only if it actually has some teeth. If the Office of
Low Emissions Vehicles really can take an overview and co-ordinate
the activities at national government level, at local government
level, at Technology Strategy Board level, at Research Council
level, at Energy Technology Institute level, if we can really
bring these different pots of money, these different levers together,
if we can really get local authorities in a co-ordinated way to
support the infrastructure developments, we can really start to
put together packages of measures that will appeal to early adopting
consumers for some of the new technologies and will also appeal
to the manufacturers in terms of seeing the UK as a place where
both vehicle development and new models need to be brought. At
the moment OLEV has nominally this budget of 400 million, but
actually it is all allocated already in different areas and it
has got to try and herd cats. It reports partly to BIS and sits
in DfT, so it has got a lot of challenges ahead of it. It is a
real opportunity to bring things together and make the UK an exciting
prospect for both manufacturers and consumers for these new vehicles,
but it is going to need a lot of support, and we are hoping it
gets it.
Mr Archer: To give you an indication
of the scale, we have got 341 vehicles in the current demonstration
programme. The £230 million investment to support purchase
will give you around 50,000 vehicles, something like that. The
Greener Transport Strategy is forecasting around 800,000 electric
vehicles by 2020 and the Climate Change Committee want 1.7 million
vehicles. That is a very big gap, and at the moment we do not
have clear plans about how we are going to go from 341 to 50,000
and then from 50,000 up to hundreds of thousands or millions of
vehicles, and that is the work that still needs to be mapped out.
Professor King: If 1.7 million
sounds a lot, the French Government has announced its target of
two million electric vehicles on the road by 2020 and the German
Government have announced a million. So, 1.7 million is very much
in the ballpark of the ambitions of our major European neighbours.
Mr Archer: Spain has also announced
a million, but by 2014. I think that is very ambitious, but, yes,
there is a whole range of countries making similar announcements.
Q254 Judy Mallaber: Everyone is making
all these announcements. Are you saying that, regardless of the
amounts currently spent, the Government is putting the money that
is available on the most beneficial activities? Is it a question
of where they put the money, wanting more money or organising
the current pots of money better? What would be your immediate
wish list for what the Government should be focusing on?
Professor King: Unfortunately,
there is never one thing that will solve the problems. I certainly
think we need to invest more money in this. Overall, if we are
going to meet our carbon budgets longer term, apart from this
one in the first budget timescale where we may meet it because
of the impact of the recession rather than because of the measures
that have been implemented, we are going to need more funding
to stimulate some of these industry activities and some of the
consumer activities. I think, very clearly, in stimulating electric
vehicles there needs to be more money in terms of initial purchase
support for vehicles if we are going to get anywhere our 1.7 million
target by 2020, and so we have said in the Committee on Climate
Change report there are a whole range of figures, obviously depending
on a whole range of different models and scenarios, somewhere
around 800 million in the purchase price and probably another
100 million or so in support of infrastructure development to
give consumers the confidence to use these vehicles. However,
we have not got to make that decision immediately because these
vehicles are going to start arriving at the end of 2010 through
2011. We do not need all that purchase support immediately; we
do not need all the infrastructure in place immediately; there
are quite a number of studies going on which will give us more
evidence about what is really most likely to be necessary, but
we have to recognise that those sorts of sums of money are going
to be required as we move forward if we want to make these things
happen. I think there is a real opportunity in getting different
organisations and different levels of government to work together
better. There was an announcement, I think from Nottingham County
Council, that it was going to charge employers £2,000 a parking
space for parking in the city centre. I am an employer in the
centre of Birmingham. If the Council told me it was going to do
that but actually said I would not have to pay it for every space
where I put a charging point for an electric vehicle, you could
use that as a mechanism for starting to get the infrastructure
in place in our big cities. If you talk about bus lanes and use
of bus lanes and things, you can put together packages that actually
cost nothing, which for early adopters of new technology are very
appealing to them. The research shows we greatly over value things
like free parking being exempted from the congestion charge. We
put a value to us which is much greater than the monetary cost
that we are saving. You can put together parcels that will make
these new technologies attractive to buyers and that will go some
way to overcoming their anxiety about the fact that it is a new
technology: they are not entirely sure about things they are being
told about the running costs, about reliability, for example,
or it does not do quite what the car they are used to driving
does. We have got to overcome all those and we have not got the
money to deal with it all in terms of upfront financial incentives,
so that is why OLEV could be so important, because it needs to
bring all this together, and then you add in issues like planning.
Actually 70% of us live in houses or flats where we have off-street
parking. If we made it a mandatory requirement that every garage,
for example, had electric sockets, then there would be immediate
access to power to people who had a garage in a new house. We
need to bring all these things together to prepare for the future,
and some of that does not cost anything and, therefore, we can
make more of what we can afford.
Mr Archer: I would agree with
most of what Julia has said on electric vehicles. My view is that
the 800 million that the Climate Change Committee have estimated
is probably at the lower end of what is required because they
have made some quite optimistic assumptions, but I leave that
aside. What I would say, however, is that I do not believe electric
vehicles are going to be a silver bullet. There is going to be
a range of technologies which emerge. We need to make our existing
internal combustion engine vehicles much more efficient and we
can do that, and we need to be investing and incentivising people
to choose those lower carbon models. Also, I think biofuels and
advanced biofuels in the future are going to play an important
role in low carbon transport and we ought to be making similar
incentives to encourage the shift to sustainable biofuels and
advanced biofuels, investing the kind of money which we are now
talking about investing in electric vehicles.
Q255 Paddy Tipping: We will come
to biofuels in a moment.
Mr Archer: My main point here
is, yes, we have made an excellent start on electric vehicles
and we need to go a lot further, but let us not forget that actually
there will be a suite of technologies in the future and we need
to be incentivising and encouraging all of those realistic practical
ones, not focusing only on the electrification agenda.
Q256 Anne Main: A short question.
You have talked about low carbon emission engines. Are you convinced,
particularly with the scrappage scheme as well, that there is
enough monitoring being done of the carbon footprint of these
new vehicles and assessment of it as well?
Mr Archer: I think we have got
a fairly good understanding of what the life cycle emissions of
existing vehicles are. Very broadly, 80% of the emissions come
in use from the petrol (the fuel), 15% in manufacture, 5% in disposal.
For the new vehicles of the future I think there is more work
to be done around particularly the life cycle emissions of the
batteries, and I think there is still a range of data available
and not all of it is of high quality, so I think that is an area
that does require some further research.
Professor King: I was at a conference
in Sweden yesterday and there is a strong French group in battery
research who are looking at, essentially, biological routes to
producing lithium ion battery electrodes, which look very optimistic.
At a research stage it is probably 10 or 15 years from manufacture,
but it is certainly an area of interest and I think it is an area
that the community has registered very strongly, that we need
to be thinking about the ecological, the environmental impact
of new technologies we are putting place in vehicles now.
Q257 Anne Main: Are we doing it?
Do you think there has been enough of a steer for us to do it?
Professor King: I think the industry
has understood that steer and I think researchers are very aware
of that steer. There is a real interest at every meeting I go
to: are we looking at scarce resources, are we looking at things
which are going to damage the environment, are we looking at things
which are going to be as readily recyclable as possible? I think
that is very much in place. Of course, the decarbonisation of
the power generation will also have a big benefit on industry
and, of course, manufacturing industries are also covered by a
number of the emissions reduction schemes themselves. So there
is quite a pressure, actually, on reducing emissions in manufacturing.
Mr Archer: I think there is very
wide acceptance within the industry that they will move away from
simple tailpipe measures to life cycle carbon measures and they
are getting a much better handle on their carbon footprinting
and reducing their emissions in manufacturing very substantially.
Some of the new lightweight materials will also be quite carbon
intensive; so there will be a challenge in terms of making vehicles
lighter but also lower carbon. I think, more generally, in the
longer term we need to recognise that we will have to move away
from our current quite simple measures of tailpipe emissions to
having the kind of metrics and taxation schemes that measure the
whole life cycle impact of the vehicle. My own partnership has
a project on that that is just starting at the moment just to
start to think about how we might do that and what the implications
might be. In fact the UK, in many ways, certainly in the area
of biofuels, has led the world in terms of understanding life
cycle emissions, so it is something that we have a lot of track
record in.
Q258 Charles Hendry: I think we have
heard some really helpful and fascinating answers, and I think
it shows part of the problem of sometimes having targets without
delivery mechanisms and not knowing quite who is responsible for
making sure you get there. Is it not inevitable though that the
UK will lag in terms of the ambition, partly because of the pressures
on our generating capacity, and if one was going to try and roll
out electric cars too quickly we simply have not got the generating
capacity there to provide them with the necessary charging facility
where we need to have new investment coming in? In the early stages,
if that happened soon, it is less likely to be low carbon, it
is going to be based on hydrocarbons and, therefore, one is building
unsustainability into it. Given the system which we have with
our current generating capacity, is it not inevitable that we
will lag behind some of the other countries which already have
low carbon electricity?
Professor King: We have looked
at that in great deal on the Committee on Climate Change. Clearly,
as Stuart, I think, raised very early on, the absolute priority
for all developed countries is decarbonisation of the grid. Almost
all countries. Let me exclude the Nordic countries and, indeed,
France where they have very low carbon grids already. Decarbonisation
of the grid has to be a priority. We have looked at a number of
scenarios on the Committee and, because quite a lot of our generating
plant is quite close to end of life and comes to end of life over
the next 10 to 15 years, there is a real opportunity for the UK
to decarbonise its grid in a major way, and the sort of pathway
we have indicated in the Committee on Climate Change that the
UK will need to meet is coming down from a carbon intensity of
550 grams per kilowatt hour, which is roughly where we are now,
to about 300 by 2020 and down to about 90 grams per kilowatt hour
by 2030. We have presented a number of scenarios by which we could
do that, one of which happens to be 43 gigawatts of wind, two
nuclear power stations and a third on the way and the early implementation
of carbon capture and storage on four experimental facilities.
That is only one, it does not have to be that, that is one of
the scenarios we have looked at that could achieve that. Since
we have to do that, that is actually fundamental to us meeting
our carbon targets in any area. I do not think that is something
where we should say we should not start introducing electric vehicles
because of that. In fact, again, the analysis shows that an electric
vehicle the size of a medium-sized family car, if you could buy
one today, which you cannot, would have emissions equivalent to
about 100 grams per kilometre, so it would be well below.
Q259 Sir Robert Smith: Using the
current grid?
Professor King: Yes, using our
current grid electricity, our current grid average electricity
of 550 grams per kilowatt hour. By 2030 that would be down to
about 20 grams of CO2 per kilometre. So that would
be radically decarbonised. The issue is we have got to meet our
targets on decarbonising the grid but we have not got to do that
just for electric vehicles, we have got to do that if we are going
to meet our carbon budgets generally—it absolutely has to
be our priority—and, of course, it gives us all the options
in electric rail and makes them a really good low carbon option
as well. Again, you cannot suddenly introduce electric vehicles,
industry has to grow, and so there have been a number of pieces
of modelling, some of which were done on the Committee on Climate
Change, some of which were done by a very good study done by Arup
and Cenex for the DfT and BERR, as was last year, looking at what
realistic rates of introduction might be if we start now in trying
to stimulate the industry, and at those sorts of top-end of the
fastest rates of introduction of electric vehicles and plug-in
hybrid electric vehicles that you can imagine it has very little
impact on our grid. It has slightly more impact on the distribution
system but it is nothing you cannot readily build into the developments
we need in our distribution system anyway and the developments
we are absolutely going to need if we are going to have more local
generation and more of the local green generating technologies.
It is not actually a big additional issue. It is something that
if we do not start now it is not that we will not meet the 2020
targets, as Greg has said there are lots of improvements to conventional
technology that would actually get us to 95 grams of CO2
per kilometre by 2020 without any electric vehicles, without any
early stage hydrogen fuel cell vehicles, we do not actually need
any of that to get to the 2020 target, but because this is an
industry that we can only change relatively slowly, if we are
going to get beyond the 2020 targets to targets for 2030, 2040
and 2050, we have to be introducing these changes now.
Mr Archer: The modelling studies
show that even with about two million electric vehicles on the
road, if they all plugged in they would still only add about 1
to 2% to peak demand. So that would be looking out to, say, a
2020-25 horizon. The other benefit, of course, with smart metering
and issues like that is you actually have the opportunity that
you can encourage people to charge their vehicles overnight, and
we can expect that by 2020/2025 we will have a much more renewable
generation and more nuclear. Therefore, we will actually want
more base-load demand overnight and electric vehicles are very
complementary to our new generating mix that will emerge. So I
do not think people should be concerned unduly about demands on
the grid. There will, as Julia has mentioned, be possibly some
very local issues with the distribution network. You can imagine
a sudden take-up of electric vehicles in Chelsea causing pressure
on the local grid and that will need a bit of reinforcement, but
we are not talking about major problems for the foreseeable future.
Q260 Charles Hendry: Can I pick up
on what you were saying earlier as well, Greg, about the need
for a range of different technologies. Clearly there is an evaluation
which says that some will deliver a low carbon society more quickly
than others or more effectively, there may be some interim technologies
which will have a role to play over 20 years but not over 40 years,
therefore can government afford to be neutral? Does government
not need to say, "If we are going to get there, these are
the technologies we need to be using at this point", especially
bearing in mind that if it chooses some particular options there
are very significant costs in terms of the infrastructure? If
one was to move to a hydrogen-based economy one has to have filling
stations or refuelling stations around the country, and that would
require some degree of government mandate to make it happen. Can
government be genuinely neutral between the different technologies?
Mr Archer: I think there is a
range of views on this.
Q261 Paddy Tipping: What is the answer?
Mr Archer: I will give you this
answer. There are certain areas in which government can afford
to be entirely technology neutral. It does not need to specify
hybrid technology in order to make existing ICE vehicles more
efficient; it can simply specify, "We need to achieve this
improvement in tailpipe CO2", and drive the market
in the right direction. There will be other areas, particularly
where alternative fuels or power trains are required and new infrastructure
is available, where government will need to actually make choices
because it will be too expensive in order to invest in a whole
range of different technologies, and particularly fuels. I think
it is quite clear that there are a small number of technologies
which are now emerging as likely to be medium and long-term solutions.
Electrification, both pure EV and plug-in hybrid is likely to
have an important role. I believe that biofuels will have an important
role also and it may be that that role in the longer term is more
as a power source for a range extended hybrid vehicle rather than
being used in combination with petrol and diesel in an internal
combustion engine. If we can address the challenges of hydrogen
and fuel cells, it may be that the hydrogen and fuel cells become
cost-effective in some period beyond 2030, at which point government
will have to decide whether or not we need to make the investment
in that technology then or, indeed, our existing mix of technologies
is fit for purpose for the foreseeable future. That is to say
we need to be continuing to invest in making sure that that opportunity
could potentially emerge, but we do not have to make a hard choice
now in terms of investing billions of pounds in developing that
infrastructure right now whereas we do need to be talking about
spending millions of pounds on developing electrical recharging
infrastructure because that is nearer term. I think in some areas
we can afford to be entirely technology neutral and in other areas
we need to make choices. We now do have the NAIGT (New Automotive
Innovation Growth Team) Roadmap that gives us a clear idea of
where vehicle manufacturers believe the technologies are, and
that is in electrification, it is in biofuels and it is possibly
in hydrogen fuel cells in the future, and we have also got roadmaps
for how we can improve the efficiency of existing vehicles where
we can afford to be more technology neutral. There is a mix of
answers there, but it shows that there are areas where choices
will have to be made and areas where we can allow the market to
simply compete.
Q262 Dr Turner: Can you give us an
idea of what the overall potential is for reduction of our CO2
emissions on a national scale? What contribution to that can low
carbon vehicles make?
Professor King: Transport is the
third largest area of CO2 emissions for the UK after
power generation. Depending quite what you incorporate in that,
it is about 25 to 28% of our CO2 emissions. Of transport
almost 70% of that is actually cars and light-duty vehicles, so
cars and vans. The 2050 target of 80% reduction in emissions is
hugely challenging against 1990 levels, and actually cars and
vans is probably one of the few areas where we can actually see
a pathway either through electric vehicles or potentially electric
and hydrogen in the later stages of actually reaching, in fact,
better than 80%, somewhere nearer a 90% reduction.
Q263 Dr Turner: Of current transport
emissions?
Professor King: In emissions from
light-duty vehicles. We can see a way of getting to the 90% reduction
level for 68, 70% of our transport, excluding aviation I have
to say. I think the other areas are more challenging. The larger
vehicles, clearly on the railways Stuart has mentioned electrification
and probably has other areas on railways. In some ways, more challenging
are the heavy goods vehicles and the buses, but I think that is
not my area, it is an area that Greg is better qualified to speak
on.
Mr Archer: Certainly HGVs and
efficient freight mechanisms generally is a hugely under-exploited
area at the moment. The technologies are more expensive, but clearly
the fuel costs of running these vehicles are very substantial
and, therefore, the market is very receptive to low carbon technologies,
fuel efficient technologies which are available. There are some
now starting to emerge. I particularly highlight the opportunities
for bio-methane in articulated trucks where there are return-to-depot
type operations. Bio-methane is an entirely sustainable biofuel.
It is a bio form of natural gas. It can deliver greenhouse gas
savings of anything from 60 to over 100% of the fossil equivalent,
and certainly in articulated trucks there is a really good potential
for it with the current duty breaks which already exist, but we
need to build up the infrastructure, we need to make sure that
the anaerobic digestion facilities which are now being built also
have the capacity for refuelling vehicles as well as for combined
heat and power and injecting into the grid. That is an area where
I think we could make a big step forward over the next few years
and where I know there is emerging interest within the Department
for Transport. I would also highlight the fact that there is probably
at least a 50% improvement that we could deliver in the efficiency
of our existing vehicles by mid 2025 to 2030 through a whole range
of technologies: new engines, new aerodynamics, better light,
better tyres, so on and so forth. That will bring us down on a
tailpipe basis to something between 75 and 80 grams per kilometre
by around 2025 to 2030. Beyond that there is debate as to whether
new technologies which capture heat and reuse heat could bring
in more efficiency and the like or whether, indeed, we need to
make a more wholesale switch to electric transport. There is a
difference of opinion between some engineers who see the future
as being largely electrification and others who think that we
will continue to make incremental improvements in the efficiency
of vehicles to enable us to get down to very low levels through
other routes.
Professor King: I think electrification
of HGVs is quite a challenging thought. I think we will need other
technologies for large vehicles.
Paddy Tipping: I will come to railways
in a second.
Q264 Dr Turner: The Climate Change
Committee has got some short-term targets: 240,000 plug-in or
hybrids by 2015. Do we have the technology and productive capacity
in Britain to meet those targets? Are there realistic shorter-term
targets?
Professor King: We are putting
forward scenarios which we believe are achievable, there has to
be infrastructure and, indeed, manufacturers have to be confident
to deliver those vehicles to market. In terms of announcements,
we have seen the announcement of the Mitsubishi i-MiEV, and they
are looking to get up to, by about 2012, about 200,000 units per
year; there is the announcement recently of the Nissan Leaf (we
have not yet heard what their early targets for manufacturing
are going to be)' we are expecting announcements about the BMW
Megacity. They have produced an electric Mini for the 340 vehicle
demonstration activity we have got going on but they are saying
that is not going to be their first production electric vehicle.
I think that is shame, but there we are. So there are a number
of manufacturers. We have got most of the French manufacturers
coming out with announcements about electric vehicles, so it looks
as if that is not an unrealistic target, but what we are saying
here is we are trying to accelerate that movement in an industry
which has been very hard hit by the recession globally and we
are, therefore, trying to make sure that they can see that countries
will be doing their bit to stimulate the market for these vehicles,
because unless they can see a market they are not going to bring
the vehicles to market.
Q265 Dr Turner: There is also a concern
about the availability of some of the raw materials, particularly
lithium and rare-earth and the obvious possibility that China
is cornering the market in this. What concerns do you see about
material supply?
Professor King: I personally do
not think lithium is a particular issue. There is a lot of lithium
in quite a number of places. Rare-earth for magnets for electric
motors right through the economy is an areas that does need more
attention, because that is not just vehicles, that is moving to
a more electrified low energy economy. There will be a lot more
electric motors and other devices that need magnets and I think
the rare-earth is an issue that does need addressing. Europe and
the US does need to recognise that it needs to move forward on
these technologies because whilst we are talking about, potentially,
a few million electric vehicles by 2020 in Europe, the Chinese
are announcing 70 million electric vehicles by 2020, so there
is both a threat and an opportunity in the markets out there.
Q266 Sir Robert Smith: We have been
hearing all sorts of measures to try and get to a good end, either
through regulation, through incentives in terms of car parking
and also Europe has embraced emissions trading, so there is the
market trying to drive it, there is regulation trying to drive
it and personal incentive trying to drive it, and then in answer
to Charles, talking about how for some of these technologies in
reality you need a government steer because there is such a huge
infrastructure. Does the Government have the resources, both in
the skill-set and physically, to make these judgments to steer
the market to get the end that we are looking for?
Professor King: That is always
a challenge, and as an engineer I would always say I do not think
Whitehall employs enough engineers and scientists in policy—rather
too many economists—but I actually would say I think we
have some very good people now amongst the civil servants in both
DfT and in BIS in this area. I am sure there could be more, and
more interchange with industry is always to be encouraged, but
there is the new Automotive Innovation and Growth Team which was
set up by BERR and is now working under the auspices of BIS very
effectively and continuing to do that. For example, the Technology
Strategy Board, which is a non-departmental public body, has a
strong team in the automotive area. In fact, most of our RDAs,
in particular One North East (which is where the Nissan factory
is) and Advantage West Midland have automotive teams in place
who are actually very capable of advising locally on some of the
measures. So we have quite a lot of the right people in the right
places but, again, as Greg mentioned, there is this issue of co-ordination.
We need them all working together rather than lots of different
separate initiatives because we are going to be constrained by
funding and we need to make the funding work as effectively as
possible.
Q267 Sir Robert Smith: Is there not
a danger that was picked up in some evidence in Denmark that because
we are now part of the European-wide Emissions Trading Scheme,
if we produce any subsidies that are UK specific, they will leach
out, in effect, and we will be subsidising the whole of Europe
because of the trading of the emissions and, therefore, one lever
has maybe been lost in terms of tackling or incentivising? Obviously
you can use regulations that are specific to the country, but
if you use a specific subsidy in one part of the EU, you are,
in effect, subsidising the whole of the EU because of the trading
in the emissions?
Professor King: Emissions trading
does not yet cover the transport sector. I think there are all
sorts of complexities in terms of introducing it, particularly
in terms of introducing it for aviation and how we decide whose
emissions are whose. There are some huge challenges ahead that
I hope people will take pragmatic approaches to because we do
need to get these emissions into a trading sector.
Mr Archer: It is certainly the
case that the incentives we are creating for an electric vehicle
or low carbon market for vehicles in the UK will benefit overseas
manufacturers which will also supply into our market, but I think
what we have to recognise is that by doing that we are also creating
early market opportunities for our own businesses that simply
would not exist otherwise. That is a really important reason that
we are pushing forward on the electrification of transport now
to ensure that the good companies that we have got really do have
a good opportunity to expand and develop and become the new technology
providers of the future. If we do not make that early move here
then other countries will make that investment and it will be
their businesses which have that first mover advantage.
Q268 Mr Anderson: I want to pick
up on the point that Charles raised about basic raw materials
and, in particular, copper. If we are going to have, as I understand
it in the north-east, 7,000 off-shore wind turbines, we are going
to upgrade the whole of the National Grid, we are going to have
millions of vehicles which will need electric motors and we want
to electrify even more on a rail basis, all of which are good
things to want to do, have we got sufficient supplies of copper
in the world to do this on a global basis?
Mr Archer: I do not know the answer
to the copper question. I would agree with the point that Julia
made that lithium does not seem to be a problem, but some of the
rare-earth metals which are used in windings in motors and things
like that have been identified as a potential issue. I am afraid
I cannot comment on copper.
Professor King: Copper certainly
has not been identified as an issue, and, of course, there are
alternatives for copper in some areas of application where it
is currently used. Some of the major cabling and things can be
dealt with in other ways, so it is not one that anybody in the
industry is finding as an issue, but, like Greg, I cannot give
you an absolute answer on that.
Paddy Tipping: We have talked a lot about
biofuels already. Anne Main is going to pursue this.
Q269 Anne Main: This is a very specific
question. I know Mr Archer said we should be looking at more sustainable
biofuels, but I think this one might be for Professor King. Recycled
cooking oil. Do you believe we have missed a trick here in that
you are not allowed to use recycled ethanol in recycled cooking
oil to qualify for ROCs and that you have to use a far more expensive
process, I believe using sugar to get an ethanol to mix with the
recycled cooking oil? I believe we export lots of recycled cooking
oil that could be utilised within the UK. I have had this anomaly
pointed out to me and I would be grateful if you would say that
it is not so, but a company that I have been talking to says they
are not eligible for ROCs and they cannot use recycled ethanol.
Professor King: I am sure there
are small issues like that but, to be honest, recycled cooking
oil is not going to revolutionise transport fuel. The issue of
transport fuel is an issue of scale, and that is why petrol and
diesel work, that is why electricity has the potential to work
in the short to medium term and that is why hydrogen does not
yet work because we do not have low carbon production of hydrogen
and distribution of hydrogen at scale. That is why some of these
things are interesting for little local applications but are never
going to make a radical difference to the transport fuel situation.
So there may well be small areas where legislation which is trying
to address that—
Q270 Anne Main: If we look at methane—this
is something that is already there—it would be simple to
just move the thing along a bit.
Mr Archer: The point that you
are making concerns the definition of ROCs and particularly biodiesel
from used cooking oil to qualify for ROCs in which you have to
use biomethanol in order to produce the biodiesel. Frankly, it
is bonkers to have an entirely different criterion for the sustainability
of biodiesel going into power generation as that going into transport.
It was quite an unnecessary complication that was created. It
has caused problems, particularly for small biodiesel producers
using used cooking oil, and the sooner it gets sorted out the
better.
Q271 Anne Main: I have had it pointed
out to me that it is a bonkers anomaly and I am glad I have heard
it from you! Perhaps we could ask that this bonkers anomaly is
got rid of.
Mr Archer: It is obviously a technical
term!
Q272 Dr Turner: Quickly, on biofuels,
Greg, what is your estimate of the actual contribution, in percentage
of total use, that biofuels can contribute given the limitations
imposed on biofuels because of the competition for land use food
production?
Mr Archer: I think there is some
new work that has been done by the Renewable Energy Association
that has also been peer reviewed by Imperial College that shows
that in Europe we certainly seem to be able to get to our 10%
by energy target by 2020 through improved land productivity, new
improved yields and the like. Going beyond that I think will require
us to start to develop the advanced technologies of the future,
and there are certainly opportunities to do that and companies
like INEOS in the UK are looking at how you can turn municipal
waste into biofuel, and there are processes in respect of waste
wood and forest residues, and then, ultimately, of course we could
get into algae, which of course would transform the opportunities
for biofuels in the longer term because it would remove the pressure
on land. Most of the work that I have seen suggests that you could
probably get up to around 20% of transport energy, something of
that order, using biofuels without having substantial land use
change, but it probably cannot contribute much beyond that unless
you get this step-change in the technologies, but then you also
need a step-change in other technologies, like battery technology,
in order to bring their costs down to make them really cost-effective
too, and there you are looking at things with a 2025 horizon.
Paddy Tipping: Stuart, you have been
sitting for a long time waiting for the whistle to blow on the
trains and this is area where we can make some big progress.
Q273 Dr Whitehead: You mention in
your memorandum to us that, on the one hand, the rail network
is actually a relatively low carbon network and potentially a
very low carbon network, but what particular technologies do you
think could move us along in the best possible way?
Dr Hillmansen: To expand upon
that a bit, the UK railway network is currently powered by a mixture
of sources. We have got AC systems, which are alternating current
overhead lines—generally East Coast and West Cost Mainlines
are examples—and then the Southern region around the south
of London are powered with DC systems. Both of them are connected
to the electricity grid and to some extent the tailpipe emissions,
if you like, are the same as those in the power station. So in
the future the railway automatically benefits from any decarbonisation
or increased renewables penetration into the grid mix. Most of
the passenger kilometres are actually delivered on electric vehicles.
In my memorandum I stated that this is potentially a zero emissions
technology if you produce your electricity without emitting carbon
dioxide molecules. However, there are parts of the railway which
are not electrified at the moment and the Government has announced
two major schemes which will improve the ratio of electrification
in the future, the Great Western Mainline and the route between
Liverpool and Manchester being those examples. Electrification
is a good thing and shifts the problem out of the railway sector
into the electrification power generation industry. There will
always be parts of the railway though which are lightly used and
are not cost-effective to electrify, and I think those parts of
the railway, which are very important parts of the railway, may
need to look at alternative technologies to provide propulsion
power and there will be technology transfer from other sectors.
The work that is happening in the automotive industry, for instance
on battery technology and high efficient motors and all the other
things there, can be transferred over to the railway industry
in due course. I do not think there is a serious time issue in
the UK at the moment for that to happen. Most of the rolling stock
we have has got a very long life and you would not want to decommission
it before the end of its life, but in terms of detailed technologies
the railway industry is certainly looking at basically all the
technologies that automotive are interested in: things like energy
efficient driving, lowering aerodynamic resistance, making better
use of the service, encouraging more bums on seats. An empty train
may be very efficient but if there is no-one on it then it is
an environmental disaster. So increasing the load factor is an
important issue. Equally, things like permanent magnet motors,
which Julia has already mentioned, are being trialled in the industry
and, equally, may have concerns about rare-earth materials for
providing those magnets. Management of energy within the industry
is important as well and potentially can be used to understand
how eco-driving can save energy. There is a whole host of things
that the industry is looking at on various different levels. As
I said earlier on, most of the railway companies know that they
need to do this in order to encourage people to go onto the railway
vehicles, and putting LED lighting on vehicles, that sort of thing,
all those things are being trialled and affect the bottom line
energy consumption.
Q274 Dr Whitehead: You mention that
the penetration of new technology could take a long time because
of the expected lifespan, for example, of rolling stock.
Dr Hillmansen: Yes.
Q275 Dr Whitehead: You say it would
be a bad idea to decommission existing rolling stock. Why would
it be a bad idea? Should there not be a scrappage scheme for rolling
stock on the railways?
Dr Hillmansen: I think it would
be a very expensive scrappage scheme.
Q276 Dr Whitehead: Or even a conversion
scheme?
Dr Hillmansen: Again, the idea
of retrofitting railway vehicles has been mentioned and it is
something that is achievable. However, partly because there are
low volumes of vehicles in the industry, it is very expensive
to do major modifications to traction systems and, if you look
across the spectrum of rolling stock, we have got the stuff which
is quite inefficient all the way up to something which is very
efficient in terms of taking electricity from the overhead and
delivering it to the wheels, so there is a range of efficiencies
in the industry at the moment, but I do not think, based on a
marginal improvement in energy consumption, that you would be
able to justify scrapping vehicles that still had 10 or 15 years'
worth of life. It is only really a minority of vehicles which,
I think, are nearing the end of their lives at the moment which
could be used on the lightly used parts of the network, so it
is not a huge issue and it is nothing really to worry about in
the same way as it is for the automotive sector.
Q277 Dr Whitehead: When you say that
parts of the network are not electrified, that is, is it not,
a relative term inasmuch as it is true that the majority of the
passenger kilometres are electrified, so only a minority of the
rail network itself is actually electrified?
Dr Hillmansen: Yes, that is right.
Q278 Dr Whitehead: So is the Government
being ambitious enough? You mentioned the electrification scheme
for London to Swansea, but should there be further ambitions in
this respect, and do you think there also comes a point, however,
when the cost-effectiveness of this comes to a balance and at
what point might that balance be achieved in terms of ambitions
in terms of the electrification of the network as a whole?
Dr Hillmansen: Well, what I would
like to see in the current electrification plans is a sustained
programme of electrification. If you look at what we have done
in the past, there have been bursts of electrification on the
East Coast/West Coast Mainlines and, after each burst, everything
stops and you have to think what happens to the skills and the
people who are doing it. Although railway procurement is global
and you can have international suppliers and so on, it seems sensible
to say that we would like an electrification programme that will
span over the next 20 years or so, so Great Western, I believe,
is going to take eight years from now and the Liverpool to Manchester
line something like four years. I guess Midland Mainline is the
next in line and I understand that people living near the Midland
Mainline are fairly disappointed that they were not the first
to get it, so pushing that forward and looking at other infill
schemes is certainly important. By increasing the ratio up to
something like 50% electrification, you can get something like
80% of the journeys produced by electric trains. However, there
are always going to be some parts of the routes which only have
maybe a half-hourly or hourly service or even lower where you
would never think about electrifying just because of the cost.
Q279 Dr Whitehead: Are we not over-engineering
some of the suggestions on electrification for lesser-used lines?
I remember well going to school on a trolleybus which is a rather
more low-tech version of electrification, is it not?
Dr Hillmansen: Yes, I think those
sorts of technologies should be looked at in some detail. The
standard mainline electrification can deliver huge power to railway
vehicles and propel them along at very, very high speed, but for
the lightly used parts of the network maybe some lower grade of
technology is something that we should seriously look at and look
at ways of installing it on a cost-effective basis. I agree, I
think it is something we should definitely look at.
Q280 John Robertson: Could I talk
about the skills. Unite, the union, have suggested that the Government
introduce a National Skills Academy for Railway Engineering. With
all this new technology you are talking about, there is definitely
a shortfall of skilled labour and I would imagine that the age
profile in the railways is not much different from most of the
longer companies which have seen their staff there for a long
time, so what do you think about that? Who do you deal with and
where do you think you are going on this?
Dr Hillmansen: Speaking from a
university perspective, we certainly at the University of Birmingham
encourage many of our graduates to go into the railway industry,
and we use the railway as an example in many of the lectures,
so in terms of graduate recruitment into businesses, we are certainly
promoting that, and I think there has been a change in how the
railway industry is viewed as now a high-technology industry and
attractive for them. However, at different levels I think there
are other issues that need to be addressed, and certainly apprentice
schemes and so on could be used to encourage people in.
Q281 John Robertson: Do you talk
with other universities and do you talk with the various companies
and Network Rail on a regular basis?
Dr Hillmansen: I am actually part
of a research organisation, Rail Research UK, which is a consortium
of universities that do railway research and we regularly speak
together about mainly research, but also other issues, like training
and education and how to encourage more people to go into the
industry. We also have many research projects within the industry,
but these are not often at the sort of low levels in the industry
where they actually do things, so I think those issues are probably
for someone else to answer.
Q282 John Robertson: So it would
be fair to say then that you are well behind the nuclear industry
in this where they have various connections with education, et
cetera, and also they have degrees that are tailored for their
needs. Do you not feel that maybe the others would feel the same
would apply to them, that you need to tailor degrees that are
going to be fit for purpose in the future?
Dr Hillmansen: I know that some
universities have tried specific railway engineering-type degrees.
However, I think the view that we have at Birmingham is that we
should concentrate on the core disciplines of electrical engineering,
mechanical, civil and so on, but in the course of a degree programme
use railways as learning examples and then you have somebody who
is equipped in a discipline and can see how that could fit into
the industry. However, I would say that we do offer at Birmingham
a Masters programme in railway systems engineering and integration
which is mainly attended by people from the industry who are looking
to understand a little bit more about the whole system. Railways
systems are very, very complex and they have lots of different
technologies in them, a whole host of different areas, so understanding
how they integrate together is really the core focus of that Masters
programme, so I would not say we are too far behind other industries
in terms of what universities can provide towards equipping skills
in these kinds of organisations.
Q283 Paddy Tipping: Politicians have
real difficulties with things like congestion charging, road pricing
and, dare I say it, reducing the speed limits on roads. Those
are all initiatives that we are going to have to take, are we
not?
Professor King: One thing I was
going to say when Stuart was saying that we should not really
be too worried about actually decarbonising some of the branch
lines is that I think we should recollect that, if we were to
enforce the 70 mile per hour speed limit on motorways, we would
save 1.4 megatonnes of CO2 per year. If we were to
reduce it to 60 and to enforce that, we would save another 1.5
megatonnes of CO2 per year. That is over 5% of the
transport CO2 emissions. That is more than the whole
of the railways and you might say that costs us nothing, but it
is a jolly difficult thing for politicians to decide that they
have to do. I do think that we have a communication challenge
still that needs to start everywhere, but also very much in our
schools that says that we have to get a population that understands
that some of these measures are going to be key and are actually
very painless ways of reducing our CO2 and indeed,
in that case, of improving our road safety.
Mr Archer: Some very good EU work
shows that, unless we start to reduce demand for travel because
transport demand is linked to GDP at the present time, by 2050
transport will occupy almost our entire EU CO2 cap
even if we have got something like 20% second generation biofuels,
30% EVs and 30% fuel cell vehicles, so we have to reduce demand
for travel alongside introducing these technologies. We cannot
expect that technology is going to be the whole solution here,
and at the moment I feel that there is an expectation being placed
upon the technologies which is not wholly realistic and that we
have to have much more application of measures which reduce the
need for travel, encourage people to choose those low-carbon modes
and particularly to get businesses responsible for their transport
emissions in the same way that they are responsible for their
electricity or process emissions, and that is a step that has
not been taken at all at the moment and needs to be started.
Paddy Tipping: Well, on that very challenging
point, could we leave it there. Can I thank all three of you.
You will notice from the discussion that the Committee would have
liked to have talked more, and I am conscious that there are points
that you wanted to raise and you have not had the opportunity
to, so, as you are going back home or back to work on your environmentally
friendly mode of transport, if there are things where you think,
"I should have told them that", will you just drop us
a note. Thank you all very much indeed. That was really helpful.
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