Alternative Fuelled Vehicles: Energy Provision

Matt Western Excerpts

Tuesday 6th October 2020 Westminster Hall

[Matt Western (Warwick and Leamington) (Lab)]

I beg to move,

That this House has considered energy provision and alternative-fuelled vehicles.

It is a pleasure to serve under your chairmanship, Mr Betts; it is very good to see you in the Chair. I thank all those who were involved in granting me this debate today.

Let me start with an uncomfortable, some would say inconvenient, truth:

“Each one of us is a cause of global warming, but each one of us can make choices to change that with the things we buy, the electricity we use, the cars we drive; we can make choices to bring our individual carbon emissions to zero. The solutions are in our hands, we just have to have the determination to make it happen. We have everything that we need to reduce carbon emissions, everything but political will.”

Those were the words of Al Gore some 14 years ago. The real truth, however, is that while we have some, possibly many, of the solutions, we are perhaps showing insufficient will.

In that same year, Lord Stern produced his climate change report. Fortunately, those calls were heard by the last Labour Government and they acted fast. In a global first, Labour legislated, with the Climate Change Act 2008 establishing the Committee on Climate Change, which has been responsible for recommending carbon budgets and a series of rolling targets for greenhouse gas emissions, to take the UK on a path to reduce emissions by 80%, compared with 1990 levels, by 2050.

Gore said that we must have the determination to bring about change. The inconvenient truth is that if we do not have it, and if the Government do not lead the way with the necessary determination and conviction, we will all be the victims of permanent climate change. He said that it is about making choices, both as individuals and as Governments. Labour’s Climate Change Act was a turning point. The carbon targets or budgets have been met primarily through addressing power generation, but transport remains an issue.

For the past decade or more, the contribution of carbon dioxide emissions from surface transport has remained broadly flat, at around 27%, having fallen just 3% between 2008 and 2018, according to a Committee on Climate Change report. That is the context in which we must view the importance of challenging the sector. It cannot be left to the vehicle manufacturers or the energy providers to take financial risks in the absence of certainty from Government. Nor should consumers, who rightly want to do the right thing, be penalised or disadvantaged by being first movers, only to find that the Government fail to match their ambition.

Certainly, the industry strongly supports the decarbonisation of road transport, recognising the need to reduce greenhouse gas emissions, both today and on the pathway to achieving net zero. Across the sector, it is investing significantly to deliver smart and sustainable mobility, and it is rightly calling for the right eco- system and for enablers to support consumers with their transition to ultra-low or zero-emission vehicles. As such, a comprehensive, multi-sector strategy is needed, including key elements of energy decarbonisation, investment in infrastructure and transitional consumer incentives to enable it to happen.

Let me consider in turn the strategies required for the market, industry, energy and skills, for each of which the role of Government is fundamental. It would be easy to leave it to the market and say, “Well, it’s not working. The upfront investments are too great to choose the wrong product or technology.” Manufacturers certainly cannot transform the market alone. Market frameworks and certainties are required to give consumers and businesses confidence to take the leap into these technologies and to power our transition towards alternative fuels. Understandably, until these vehicles are as affordable to buy and as easy to own and to operate as conventional cars or other vehicles, the consumer or business will not travel with the technologies. In the first half of the 2010s, fewer than 25,000 new plug-in cars and vans were sold in total. Last month, battery electric and plug-in hybrid cars made up one in 10 registrations of new models, which is a substantial amount.

It would be easy to compare and contrast with countries such as Norway, but it has a very different industrial base, and very different consumers and energy provision. It is far better to look at our peers, such as France and Germany, and see what is going on there. We need to avoid over-deliberating about technologies and make a decision—not a UK-only decision, but one that reflects where other primary markets and tech developers are moving. We need to decide the appropriate energy power unit for passenger vehicles, both solo and multiple occupancy, as well as for commercial vehicles, both autonomous and manned. The same applies to buses and mini-vans; heavy goods vehicles and specialist industrial, commercial and military vehicles, including refuse vehicles, such as those produced by Dennis Eagle in my constituency; and earth movers and others such as JCBs and those produced by businesses such as Thwaites, just outside my constituency in Warwickshire.

I turn to the industrial strategy that is required. Naturally, we all want to ensure that the UK is at the forefront of any new technologies. Of course, the UK should have the ambition to take a lead in the ultra-low emission vehicle market and be a leader in manufacturing. We need to attract new investment, including upskilling the workforce, which I will come back to. We need battery factory investment, with the supply chain development to go with it, and strategic research and development investment at a globally competitive level, such as that at the Advanced Propulsion Centre at Warwick University. We also need the UK Battery Industrialisation Centre, which is currently being built just outside Coventry and is due to open later this year. The Government supported the collaboration by Coventry City Council, the local enterprise partnership and Warwick Manufacturing Group, which were awarded £80 million.

Developing the technology is one thing; commercialising it is another. We presently have zero gigafactories, while other countries already have them or are establishing them. Sadly, we missed out on Tesla, which decided to invest in Germany, in a factory just outside Berlin, to produce batteries, battery packs, powertrains for use in Tesla vehicles, and to manufacture the new Tesla Model Y. It will produce 500,000 units a year, employing 7,000 people. The company was attracted to the UK, so Elon Musk says. However, it wanted to be at the centre of Europe, so, sadly, the Brexit decision meant that it was a safer bet for Tesla to invest elsewhere.

As Tesla shows, an industrial strategy needs to be underpinned by a super-low-carbon energy strategy. The energy needs of manufacturing must be supplied by renewables and low-carbon sources, particularly given that the manufacturing processes demanded in EV production cost up to one-third higher than those for an internal combustion engine vehicle.

Energy strategy is a crunch area for the UK and, ultimately, a deal breaker. UK electricity prices are 68% above the EU average, according to data from the Department for Business, Energy and Industrial Strategy in 2018, having risen by 55% since 2010. It is a seriously burdensome premium that the manufacturing sector has to pay. A 2018 University College London report found that our European neighbours had reaped the benefits of better interconnections, more cross-border trading and long-term supply contracts. Although the Prime Minister announced in the last 24 hours more offshore wind-generation capacity, we need to embrace more onshore wind, to seriously drive down energy costs.

I turn to network and planning and the importance of delivering energy locally to manufacturing and to the consumer. The present infrastructure is far from adequate. Significant and urgent investment is required to create an accessible, ubiquitous and interoperable network of public electric charging—likewise for natural gas and hydrogen refuelling points—so that consumers find it as easy as filling up from a petrol pump.

National Grid says that net zero will require significantly higher levels of electricity generation. In one scenario, it forecasts that by 2050 we will require almost three times more capacity than we have today. Even in the slowest decarbonising scenario, it foresees a 75% reduction in total energy demand for road transport, which is really positive. Although hydrogen will play a role, electrification is key to the decarbonising of transport, with at least 60% of all road transport being electrified in National Grid’s forecasted scenarios.

Critical to this is a massive increase in the number of charge points, which will require a strategic national plan, delivered locally. I appreciate that the Government announced Project Rapid 12 months ago, with a £500 million investment. According to Frost & Sullivan’s analysis for the Society of Motor Manufacturers and Traders, however, a total of 7 million charge points will be needed by 2030, of which just under 2 million would be public. By 2035, the requirement will increase to a total of just under 12 million.

For motorway travel, 7,000 150 kW charge points will be needed in motorway service areas. According to the electric vehicle charging app Zap-Map, the UK currently has only 19,000 on-street charge points. That means we will need to install more than 500 chargers across the UK every day to meet our 2035 target. Although those numbers seem huge, they are what is needed if we are to address consumer perceptions and recharging fears. According to a recent Savanta ComRes survey on behalf of the Society of Motor Manufacturers and Traders, 44% of car owners are discouraged from buying an EV because of a perceived lack of local chargers. If we are to meet this challenge, Governments at every level need to work with the private sector and the local energy distribution networks, and in partnership with charge point providers such as Tesla, BP Chargemaster and others, to deliver the EV charging infrastructure.

According to the Renewable Energy Association, the number of companies developing charging networks in the UK has increased significantly in the past 24 months. Few of the UK networks—major or minor—are members of interoperability platforms, which stands in contrast to other countries, where that is rapidly becoming the norm. The Netherlands is probably one of the best examples. One of the solutions is interoperability or roaming platforms, which would allow the consumers of individual charge point operators to charge on other networks that are also associated with that hub. The hub would monitor EVSE—electronic vehicle supply equipment—usage and could settle payments between operators. The roaming platform does that for a small fee.

A second solution is peer-to-peer arrangements, which involve the negotiation of direct commercial relationships and agreements between chief procurement officers, to allow for a consumer to use multiple networks while using a single app or account without the involvement of a roaming platform.

We also need to ensure that we deliver smart charging. National Grid has estimated that 80% of electric vehicle drivers will use smart charging by 2050, which will help balance almost half of the UK’s energy demands brought on by the move to zero-emissions driving. Imperial College has done a huge amount of work with Nissan looking at this issue, and there is a massive opportunity for the parking of electric vehicles to be a huge energy storage for the grid.

Let me turn to the strategy for heavy goods vehicles and large vehicles, because it is very easy to talk simply about passenger vehicles. I appreciate that the Prime Minister has talked about massively investing in hydrogen, but we are falling behind other nations on hydrogen mobility. In Germany and elsewhere, a number of buses are being run on hydrogen. I appreciate that plans are afoot in certain parts of the UK for this to be introduced, but we need to get it behind it urgently. I know there is news of a hydrogen hub in the Tees valley, which is really welcome, but the South Korean Government have set a target of 200,000 hydrogen vehicles and 450 hydrogen refuelling stations by 2025. Why can the UK not set similar ambitions? 

Let me finally turn to education and skills, because while we need strategies, we also need to ensure that we have the skillset to deliver them. That will involve not just higher education, which is always highly regarded, but the development and supply of skills through our further education colleges, which is critical, as is developing science, technology, engineering and maths subjects through our schools. That applies not just to the research and development of new technologies; it also means providing training for those who will maintain and service the huge number of vehicles that will come on to the UK’s streets, whether they be passenger cars, commercial vehicles or heavy goods vehicles.

This is a really important sector for the UK economy. It is worth £82 billion in turnover and £20 billion in additional value to the UK economy. It is the UK’s largest exporter of goods, accounting for 13% of all UK goods exported. It employs 168,000 people in manufacturing, supporting 820,000 people across the wider automotive sector. It is critical that we invest heavily in this incredibly precious industry, and show support and direction.

The Government have made great progress in encouraging EV ownership, through VAT exemptions and the plug-in car grant, but more needs to be done in the rapid development of charging infrastructure, as well as in encouraging consumers to consider switching over to electric vehicles. We should consider tax breaks; free or reduced parking costs; generous, long-term plug-in grants; and readily available, reliable, fast EV charging on streets and in shopping centres and at places of work. We need better battery tech and more ambition from the Government to secure the giga-manufacturing plants in the UK. I and other west Midlands MPs wrote to the Government to see if we could secure investment in a gigafactory in Coventry, to support companies such as Jaguar Land Rover and, of course, Aston Martin.

The grid and direct district network operators need a clear road map from the Government for the transition in electricity use. We need a joined-up, multi-sector strategy and road map that targets long-term, positive consumer messages on all technology choices. It is Labour’s policy to end the sale of new petrol, diesel and hybrid cars and vans by 2030. We talked about the electric car revolution at the last general election, with our plans to invest £3.6 billion in EV charging networks and £2.5 million in interest-free loans for the purchase of electric vehicles, saving buyers up to £5,000. The Government need to get behind the agenda urgently.

We need new cleaner diesel as part of the mix, because without that, we will not ensure a managed transition. Diesel, together with plug-in hybrids, battery electric vehicles and hydrogen-powered vehicles are, as Al Gore said, the solutions that are there. We need a managed transition, which is critical in ensuring that manufacturers and consumers are not left high and dry by legislation, and Government policies that impact on the value of their investments or purchases. A willingness and, above all, an ability to invest is premised on the immediate profitability and future returns, but the sector needs a coherent industrial strategy, conjoined with the market strategy, underpinned by major public investment in infrastructure, in parallel with the private sector. Together, we can achieve that ambition of delivering zero-carbon vehicles by 2030 or 2035.

[Mr Clive Betts (in the Chair)]

We have seven Members on the call list, so that is three minutes each. I will have to enforce that, as the wind-up speeches will start at 5.20 pm. I call Tom Randall.

--- Later in debate ---

[Matt Western]

I thank the Minister and all Members who have participated in the debate. We have had a healthy discussion and there is lot of consensus.

Some interesting points have been raised. As the hon. Member for Bracknell (James Sunderland) said, this is not discretionary—we have to do this. We are all very excited about the prospect and there is a huge challenge. The hon. Gentleman cited Formula 1, and the great research and development that has been happening in the UK has been driven by Formula 1. We lead much of that sector. McLaren and others are developing so much in the electric vehicle sector, which is being used in bicycles as well as cars, buses and trains.

The hon. Member for Ceredigion (Ben Lake) was right when he made his interesting point about the hydrogen pathway and the development of the first such energy cell. I agree with the point made by the hon. Member for Rother Valley (Alexander Stafford) about expertise on the breadth of sectors and how we need to look at them all, particularly HGVs, as they are big drivers of the emissions that we need to bring down.

I agree with the point about the barriers to market that was raised by the hon. Member for Gedling (Tom Randall). With consumers, we have to overcome concerns about price, fear about access to charging points, range anxiety and so on. There is a lot that needs to be done through Government communications to bring that about.

The hon. Member for Paisley and Renfrewshire North (Gavin Newlands) made an important point about renewables. I welcome what is going on in Scotland and have a long-held admiration for the renewables sector there. The work that is being done on used vehicles is very interesting as well.

My hon. Friend the Member for Bristol East (Kerry McCarthy) talked about biogas buses in Bristol—Bristol is doing so much great work.