UK cities are now implementing their Clean Air Zones and low - emission transport is growing strongly. Do we have a coherent strategy for the delivery of low-carbon infrastructure? What does this mean in real terms to individuals and businesses based in the UK and who should pay for this new infrastructure?
Addleshaw Goddard's Transport and Energy Sector teams were delighted to host the IPFA's Low Carbon Transport Event to look at some of these issues in a discussion around the Future of Low Carbon Transport in the UK. Please see below an overview of the event and the key themes which arose from the discussion. Thank you to the very knowledgeable panel, led by Nathan Marsh of Atkins, who took participated.
CLIVE SMITH, Partner – Addleshaw Goddard
NATHAN MARSH, Director of Intelligent Mobility, Transportation UK & Europe – Atkins
PHILIPPA EDDIE, Head of Financial Advisory, Infrastructure Finance Team – Infrastructure and Projects Authority
GARETH DAVIS, Head of ESB eCars, ESB Group
Investor appetite for LCVs is increasing, but at the moment the projects are still very small-scale: two wind turbines would dwarf the current scale of investments in the electro-mobility sector.
The Government funds and policy frameworks are a welcome strong start, but we have to know what’s coming next.
New Partners, business models and capital sources…
…are needed to create a commercially sustainable ecosystem. The Charging Infrastructure Investment Fund, where the Government is investing £200m on commercial terms, pari passu with a matching £200m investment being sought from the private sector, is one model that has gone down well with industry and government.
Confidence in data sharing rules and robust cyber security will significantly influence investor confidence, and the overall commercial case for LCV investment.
Recognition exists, however, that a significant exercise in data capture and processing will be an essential ingredient of success, not least in informing demand management and smart grid solutions.
Government needs to create the conditions via Policy, Regulation and Standards for an interoperable system of LCV infrastructure across the UK. The Automated and Electric Vehicles Bill will help.
Public concerns/hesitation around matters such as "range anxiety", vehicle charging compatibility and fair and transparent tariffs need to be part of the evidence base creation for LCV proliferation. A campaign of public education will likely be needed to meet some of these concerns, although visible successes in early adopter schemes will be equally vital in driving uptake, with the resulting increased market size feeding back virtuously into the overall business case.
At the moment there are only around 140,000 EVs in the UK and the behaviour of these early adopters isn't typical.
Vehicle charging networks
- Destination charging (70% of Londoners don't have off-street parking). EV manufacturers elsewhere are investing significantly in rolling out charge points, to assist in overcoming range anxiety, and to stimulate customer demand.
- Home and workplace charging to be increasingly facilitated.
- Ultra high power charging (300kW+) to reduce charge times.
- Smart charging will be a necessity to provide the flexibility needed to manage the growing demand on local grids prompted by rising take-up of EVs.
V2G scenarios need to be modelled to develop a full commercial case for LCV – charging up is only one part of the case and the ecosystem and re-imagined infrastructure, so network load management needs to be considered.
The Nuvve project in Denmark has realised around EUR 1000 per vehicle per year in V2G payments.
Understanding vehicle depreciation
We should work with OEMs and Lithium battery providers to model new depreciation profiles, given the different characteristics of EV wear/depreciation as against that for motor vehicles. This will also affect the car finance market, as well as the servicing and wider after-market.
Life cycle: how 'green' are LCVs?
Full LCV/EV lifecycle consideration is needed to work out the total emissions bill of these vehicles. This starts with sourcing of composite materials, transit, manufacture, sales, use and battery disposal/recycling.
The emissions and ‘commercial case clock’ starts ticking far earlier than when the vehicle starts its first journey.
For more information on Addleshaw Goddard's Low Carbon Transport Team, please contact: