Article - Issue 44, September 2010

Responses to: On Target?; Response to: Electric Vehicles

Ruth Lea; David Cebon FREng and Nick Collings FREng

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Response to: On Target?

Dr Steedman’s editorial ‘On Target?’ (Ingenia 43) on Britain’s energy and climate change policies was timely. His reference to affordability and the impact of the costs of de-carbonising the power supply on our economic competitiveness is of crucial importance from a business and economic perspective. But this issue is too often neglected. In order to attempt to redress the balance, I recently co-authored a paper with Jeremy Nicholson of the Energy Intensive Users Group entitled British Energy Policy and the Threat to Manufacturing Industry (Civitas), in which we discuss the threat of the Government’s energy policies to business, in general, and manufacturing, especially high energy users, in particular.

At the heart of the paper’s analysis is the emphasis on the inextricable links between the policies relating to climate change, carbon emissions reductions and energy supply. There are two very influential pieces of legislation driving these policies. The first is the Climate Change Act (2008) which includes the targets for cuts in carbon emissions of at least 34% by 2020, and 80% by 2050. The second piece is the European Union’s Renewables Directive (2008), in which the UK has a target of meeting 15% of its final energy consumption through renewable sources. The equivalent figure in 2005 was less than 1.5%, which indicates the enormity of the challenge. The share of electricity generated from renewable sources (primarily intermittent and expensive wind power) is projected to rise from the current 5.5% to around 30% by 2020.

In order to achieve its climate change targets and the increased contribution from renewables, the Government is already imposing substantial costs on consumers through the Climate Change Levy, the European Union’s Emissions Trading System and the Renewables Obligation. Two years ago the Department for Business, Enterprise and Regulatory Reform published its UK Renewable Energy Strategy consultation document estimating that such policies had already added 21% to business’s average electricity bills, thus creating a ‘green stealth tax’ that has damaged cost competitiveness (incidentally adding 14% to domestic bills, thus worsening fuel poverty). In July 2009, the Department of Energy and Climate Change (DECC) released some more comprehensive estimates – in The UK Renewable Energy Strategy (HM Government). DECC calculated that the ‘green stealth tax’ would add a minimum of 55% to industrial electricity bills by 2020, possibly rising to 70%, compared with ‘only’ 21% in 2008.

To my knowledge no other country is so comprehensively shooting its businesses in the foot – especially its heavy energy users. As the economy emerges from the economic crisis of 2008-2009, the Government assumes that the private sector, in general, and the manufacturing sector, in particular, will be the engines of growth. But the green stealth taxes will inevitably mean some businesses, especially heavy energy users (steel, glass and ceramics, bulk chemicals, industrial gases, paper, aluminium and cement) will be unviable in Britain. These businesses will simply migrate to more favourable cost regimes, of which there will be many.

Now I’m aware the Government is actively developing green industries which they claim will drive growth forward. But, in an era of fiscal retrenchment, the wealth and job creating outcome of these policies is ever more uncertain. Remember “a bird in the hand is worth two in the bush”. Let’s not destroy what manufacturing industry we already have in order to chase green jobs that may never materialise.

Ruth Lea
Economic Adviser,
Arbuthnot Banking Group
Former Head of the Policy Unit, Institute of Directors

 

Response to: Electric Vehicles

The authors of The Royal Academy of Engineering’s recent report Electric vehicles: charged with potential (summarised in Ingenia 43) should be commended for an excellent analysis of the issues surrounding the future use of electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) in the UK. However we feel that the report’s conclusions, that are generally favourable to introduction of EVs, do not follow from the arguments it presents.

The report identifies four barriers to widespread use of EVs:

1. Using the current UK electric power mix, typical EVs have ‘well-to-wheel’ CO2 emissions that are higher than the best small cars. Consequently, the use of EVs will not reduce total CO2 emissions until the national electricity supply is decarbonised.

2. The cost of an EV in 2010 is typically £10,000-£15,000 more than an equivalent conventional vehicle, even after a government subsidy of £5,000. At this price they will not be purchased in significant numbers.

3. Available and foreseeable battery technologies will limit vehicle range to about 100 miles.

4. Building the necessary charging infrastructure will be a major technological challenge.

Not mentioned by the report are the projected CO2 emissions from hundreds of millions of ultra-low-cost vehicles that will be built in China and India in the next 20 or 30 years which will far exceed that generated by cars in Europe. There is little prospect of any of these vehicles being electric.

Taken separately, surmounting each of these barriers represents a major technological, political and social project. Taken together, the overall barrier to decarbonising the transport system by electrification, on an international scale, is a project of unprecedented magnitude. It is essential that the engineering community recognises this and promotes a more realistic alternative.

The ‘well-to-wheel’ (WTW) CO2 emissions of a vehicle, measured in units of [kg CO2 /km], can be separated into two factors: the ‘well-to-tank’ (WTT) emissions associated with burning the fuel, that is to say the kg CO2 released per energy delivered [kg CO2 / MJ]; and the tank-to-wheel (TTW) energy consumption of the vehicle [MJ/km]. So WTW = WTT x TTW.

Improving either WTT or TTW gives a proportional benefit in CO2 emissions. Improving both, ‘squares’ the benefit and is key to a decarbonisation programme.

A viable strategy towards decarbonisation of the transport system should have three steps:

1. Encourage use of alternative transport such as walking and bicycling along with reduced use of transport including ride sharing, public transport, home-working and teleconferencing.

2. Provide strong incentives for the purchase of low CO2 – emitting IC-engined vehicles. This will automatically drive further improvements. A reasonable estimate is that down-sizing of the passenger car fleet and transitioning to the most efficient available vehicles can reduce average TTW energy consumption by up to 30% in the next 10-15 years. Widespread implementation of existing technologies such as: light-weighting; extreme downsizing of engines with turbo/super-chargers; energy storage for regenerative braking and engine start-stop operation, can improve vehicles by another 50%, giving an overall TTW of 65% lower than at present.

3. Incentivise production of hydrocarbon fuels that have lower WTT emissions of CO2. Available routes include generating fuel from waste biomass and (non-recyclable) waste plastics as well as second generation, (sustainable) bio-fuels and synthetic fuels. A reasonable target would be 20% reduction in average
WTT by 2030.

Using these numbers, WTW emissions would be reduced to (1-0.65)(1-0.2) = 0.28 – that is to say a 70% reduction over the next 20 years. This is a good part of the 80% reduction target for 2050.

In the long-term, it will be necessary for transportation systems to continue to be powered by synthetic hydrocarbon fuels. Given sufficient decarbonised electricity, these can be made from any available source of carbon. The fundamental point is that hydrocarbons provide the best medium for fuelling vehicles because of their very high specific and volumetric energies, which are impossible to achieve with any alternatives and the existing distribution infrastructure.

The world can benefit quickly from much lower CO2 emissions from road transport, without having to overcome all of the serious barriers presented in the Academy’s report.

Supporting information for this letter can be found at www.cvdc.org/EVs/Ingenia.pdf

David Cebon FREng
Professor of Mechanical Engineering,
Cambridge University Engineering Dept

Nick Collings FREng
Professor of Applied Thermodynamics,
Cambridge University Engineering Dept

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