Despite making up just 1.5% of road users, Heavy Goods Vehicles (HGVs) account for over 20% of road transport greenhouse gas emissions in the UK. With reports stating that the UK may miss its 2020 emissions targets, decarbonisation strategies within this sector are coming under mounting pressure. Here, National Grid’s Caroline Kluyver outlines the current state of play for natural gas as a potential alternative fuel for the UK’s fleets.
Recent reports that London has the highest levels of nitrogen dioxide in the world, and that the UK as a whole has been taken to the European Court of Justice, have resulted in increased pressure to reduce both greenhouse gas emissions and air pollutants such as nitrogen oxides and particulates.
So it’s little wonder that natural gas as an alternative fuel has attracted interest and investment due to a variety of economic, social and environmental benefits.
In comparison to diesel, natural gas vehicles (NGVs) have up to 28% lower well-to-wheel greenhouse gas emissions – this figure rises to 65% lower if the gas is biomethane, –. They also provide an opportunity to save up to 37% on fuel costs and are less damaging to air quality.
NGVs also use spark ignition engines, so current engines can be modified to use natural gas as a replacement (NGV-dedicated engines) or as an addition to diesel (dual-fuel engines). Electric vehicles have not had as much attention in the HGV sector as smaller vehicles because the current technologies are less applicable for heavy, long-range vehicles.
The current UK HGV market is dominated by diesel engines, with a very low penetration of NGVs. According to the latest worldwide NGV report, the UK has more than 600 NGVs on it’s roads, most of which are HGVs (out of a total of more than 550,000) with over 30 refuelling stations. This total shows that the market is still in its infancy, compared to Iran, which has more than 3.5 million NGVs (equating to more than 25% of Iran’s total number of vehicles) and almost 2,000 stations. In Pakistan, 80% of all road vehicles are NGVs.
The NGV class incorporates both Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG) vehicles, which both use methane-based gases. LNG is produced from cooling natural gas and reducing its volume 600-fold, until it reaches a liquid state. For the transport sector it is typically delivered to refuelling sites by road and stored in special cryogenic tanks before being delivered by pump into engines in a similar way to diesel. LNG tends to be deployed for high usage long-haul purposes due to the relative abundance of LNG, long-range potential (approximately 500km) and limited life property, as it boils off if left in the vehicle engine for too long.
CNG can be taken directly from the existing gas distribution network and compressed on site, or transported in liquid form for compression on site. It is then stored at high pressure, and due to the lower energy density than LNG it requires storage in large, 250-bar tanks. CNG, with a range of up to 400km and no limited life, is typically selected for low-mileage, back-to-base vehicles such as distribution centre deliveries, refuse collection and public transport.
Both LNG and CNG can be generated from biomethane production, through anaerobic digestion or synthetic production. For example, in Germany Audi uses wind turbines to power electrolysis to form methane from waste carbon dioxide, hydrogen and a catalyst. Due to the lower lifecycle emissions from biomethane, the UK Government has committed to facilitate biomethane injections into gas pipelines. There are currently 24 established projects.
Two of the main hurdles in large-scale NGV uptake have been the small number of manufacturers producing and selling NGVs, and the limited number of gas refuelling stations across the UK.
The main companies in the NGV market today are those operating back-to-base vehicles including delivery lorries, buses and refuse trucks. These companies are able to use one refuelling station at their base sites and fuel the vehicles when they are not in use. The barrier in this sector has been the lack of availability of the NGVs themselves, however vehicle manufacturers including Scania, MB, MAN, Volvo and DAF are now supplying heavy goods, trucks and bus NGVs.
There has been a slower uptake from non-back-to-base vehicles such as long-haul HGVs, due to the lack of supporting infrastructure. However, both UK and EU governments have made moves in this space, including the LNG Blue Corridors and Green Gas Grids projects. It has also been announced that the Isle of Grain LNG facility is opening a truck-loading facility for LNG distribution in 2015 and government grants are funding four more UK stations.
The European Clean Fuel for Transport Directive states that by 2020, minimum standards for alternative fuel infrastructure must be met and policies frameworks set for their market development. The proposal within the directive requires refuelling stations for LNG every 400km and CNG every 150km along the Trans-European Core Network, and could see major infrastructure developments along the M1, M25, M3, M6, M40 and parts of the M42 and M62 where economically viable.
Another barrier is the comparative cost of purchasing or converting an NGV compared to purchasing a standard diesel vehicle. The Department of Transport states that the cost differential is between £15,000 and £44,000. Private refuelling infrastructure can cost between £400k to £1m to install, plus the cost of a grid connection. However the upfront costs must be balanced against the vehicle’s fuel costs to consider the whole-life cost. For an Articulated Tractor Unit doing an average 8mpg, diesel costs £0.62 per mile, while natural gas costs approximately £0.39.
The Chancellor of the Exchequer announced that the current 50% fuel duty differential between gas and diesel will be held at the current level to 2024. This reduces the investment risk for the short and medium term, as stakeholders stated that the previous three-year fixed differential did not provide enough certainty. The Department of Energy and Climate Change has also forecast a widening gap between future oil and gas prices. Taking into account the capital expenditure and operating expenditure, estimates suggest the break-even period of purchasing a gas HGV is between two and five years.
Remaining obstacles in the market include planning rules and permissions in building refuelling stations and standardisation in issues such as CNG pressure between stations. The Euro 6 emissions regulations will also pose a challenge for dual-fuel engine manufacturers to meet, although the first Euro 6 compliant gas engines have already been introduced, so developments are likely to continue.
With policies such as the EU Renewable Energy Directive (RED) dictating that 10% of transport fuel must be from renewable energy by 2020 and the continual search to cut business costs, we can expect continued developments in the HGV market. How that market will develop, however, is unclear. Will there be significant growth in NGVs from the current back-to-base vehicles, and will CNG or LNG dominant the future market? There are numerous exogenous factors at play including US exports of – and potential UK supplies of – shale gas.
Furthermore, could alternative technologies, hydrogen, electric or advanced diesel, take some market share? Leading bodies, such as the Committee on Climate Change, believe that hydrogen will be the most likely long-term fuel used for reducing emissions. Another alternative is Liquefied Petroleum Gas vehicles, which offer smaller reductions in emissions but have significantly lower conversion costs and existing infrastructure, with 1,400 LPG refuelling stations already in existence. Despite these challenges, the Natural Gas Vehicles Association expects 70 million NGVs worldwide by 2020.
We are interested to hear your opinion, so please let us know how you think the NGV market will develop.
- With thanks to John Baldwin (CNG Services), Paul Blacklock and Holly Sims (Calor Gas), Paul Ocholla (National Grid Grain LNG) and Damien Hawke (National Grid Gas Distribution) for their input.
“With diversification of fuel becoming a priority, LNG is fast becoming the lead alternative to oil. The growth in NGV production and demand – as well as other demands such as off-grid conversions – is a key indicator that LNG is here to stay.” Paul Ocholla, UKLNG
“It’s all about the vehicles. We have the best gas grid in the world, so there’s nothing stopping us.” John Baldwin, CNG Services