The GLA electric vehicle commitment

Report: 7
Date: 22 October 2009
By: Director of Human Resources on behalf of the Commissioner

Summary

The Mayor of London has identified the potential of electric power to make significant reductions in the environmental impact of road vehicles. To support this the Mayor has made a number of commitments including for the functional bodies to have 1000 electric vehicles across the GLA Group by 2015, in line with his Environmental Priorities and developing Climate Change and Air Quality Strategies. As a member of the GLA Cleaner Transport Forum the MPS was asked to lead on the feasibility study for the GLA Group to implement this target.

The MPS has coordinated the gathering of data and analysis of the GLA vehicle fleet to scope the potential for utilising electric and electric plug in vehicles within the fleet. In addition, the MPS is working with the functional bodies to develop the procurement, finance and communication strategies which have included evaluating government procurement frameworks and GLA fleet contracts, as well as exploring available funding opportunities.

A. Recommendation

That

1. That members approve the approach outlined in the report to:
   1. Develop a funding solution exploring a number of EU government, public sector funding opportunities to ensure a cost effective and value for money solution enabling the GLA Group to implement the Mayor’s electric vehicle target.
   2. Lead on a collaborative procurement exercise to develop a framework for the purchase of electric vehicles for use by the MPS, GLA Group, London Boroughs and potentially wider public sector organisations in London.
   3. To source, subject to funding and detailed feasibility, 800 electric and electric plug in vehicles for the MPS by 2015.
   4. Seek London Councils’ funding (£250k) to cover project management, procurement and legal costs to support this initiative.

B. Supporting information

1. As part of the Mayor’s Electric Vehicle Delivery Plan the following commitments have been made:

1. Mayoral functional bodies to operate an Electric Vehicle (EV) fleet of at least 1000 vehicles by 2015
2. Install 25,000 EV charging points across London (with around 10% in publicly accessible locations) by 2015
3. Pricing incentives for EVs included in the Central London Congestion Charge and work with boroughs to implement consistent and simplified on and off street parking incentives for EVs
4. Further develop the London Electric Vehicle Partnership and set up a London Electric Vehicle Centre of Excellence

The principles of the London EV plan are supported by EU and government programmes such as, the DfT Low Carbon Vehicles Public Procurement Programme (managed by CENEX), Plugged in Places funding for infrastructure and the Energy Technologies Institute programme to accelerate market growth for plug in vehicles. In total, there is approximately £400 million of government funding already allocated to this domain.

2. The environmental impacts of the use of road vehicles is well understood and documented. Diesel and petrol vehicles produce emissions, both directly and indirectly through the combustion of fossil fuels producing carbon dioxide and exhaust gases associated with local air quality pollution impacts and climate change. Emissions from transport account for 24% of total UK carbon emissions. Exhaust pollutants have been identified as a cause of respiratory diseases, with government figures estimating poor air quality leads to between 12 and 24 thousand premature deaths a year in the UK. The EU has imposed air quality and climate change targets aimed at tackling these issues. However, the UK is likely to miss air quality targets which could result in very costly enforcement action. More than 20 UK cities (including London) and conurbations broke pollution law in 2006. These infringements are expected to be the basis of the EU's legal case against Britain.

3. Since these effects have become known alternative solutions to fossil fuel powered vehicles have been in development. Alternative technology includes hydrogen, biofuel, air powered, electric and hybrid. All have differing infrastructure, fuelling and maintenance requirements, as well as varied performance that needs careful consideration. Electric vehicles are powered by an internal battery, which requires recharging using grid electricity. An internal combustion engine is not required and therefore no exhaust emissions are produced, which has a significant beneficial impact on local air quality. The climate change impact reduction is less easy to quantify as non-renewable electricity also generates emissions. However, these emissions are lower than from petrol and diesel which must be refined and transported resulting in significant inefficiency. An electric vehicle generates between 0-100g CO2 emissions per km depending of the source of electricity. In the longer term, as the UK moves towards increasing the proportion of renewable energy supply, the emissions from electric vehicles will decrease. By comparison, the current average for the MPS general purpose vehicles is 139g CO2/km. Plug in hybrid electric vehicles (PHEV’s) are an alternative to pure electric vehicles which utilise a combination of battery and internal combustion engine. These vehicles perform less well than pure electric, with respect to air quality emissions, but have operational benefits from extended range. PHEV’s use approximately 25% of the fuel of a standard vehicle.

4. The electric vehicle market is still relatively immature but technology is developing at pace, with mainstream automotive manufacturers bringing forward new models and prototypes. Performance is improving with each generation. Production and retail costs reflect the current market situation, and therefore the DfT has developed a public sector fund and procurement routes (CENEX) to stimulate uptake. CENEX are keen to work with the GLA to provide financial assistance for the Mayor’s electric vehicle commitment in line with the Government low carbon vehicles programmes. The GLA are currently working on the terms of a potential funding agreement between the GLA and the DfT thorough CENEX. In principle, funding will consist of the provision of additional costs to diesel equivalents for either purchase or lease. In return, the GLA will develop a cost effective procurement solution and manage the selection, detailed feasibility and implementation of the vehicles and associated infrastructure.

5. The GLA Group utilises a significant vehicle fleet to carry out its operational duties. The MPS vehicle fleet accounts for 87% of the total, with TfL utlising 4% and LFB 9%. The types of vehicles are diverse ranging from operational/response vehicles utilised by LFB and MPS to more general purpose vehicles for business travel, passenger and logistics. All of the functional bodies use cars, motorcycles and vans where electric and electric plug in alternatives are being developed by the car industry. LOCOG also has a requirement for vehicles for the Olympic games, and has identified approximately 1000 that could be electric. These vehicles are likely to be available in 2012 as a legacy of the games, and there is a desire to ensure that these vehicles continue to benefit London.

6. The GLA Group currently procures vehicles through a variety of different arrangements, ranging from a Private Finance Initiative (PFI) contract with AssetCo for LFB, to a mix of directly owned and leased vehicles for the MPS and TfL. Each functional body has set maintenance and replacement cycles within these agreements. LOCOG is currently seeking an automotive sponsor for the games, the outcome of which will be known in November/December 2009. Environmental requirements have been built into the contract, however the quantity of electric legacy vehicles will not be known until the procurement process has been completed. However, it is likely there will be opportunity to procure these vehicles at competitive rates after the games.

7. Due to the diversity of vehicle procurement arrangements in place for the GLA Group, LOCOG and the London Boroughs the best procurement solution is a new electric vehicle framework to support current government arrangements. An analysis of current available frameworks has been carried out and these do not offer the flexibility or competitiveness required to take full advantage of the developing market or which meet operational requirements of the GLA Group or wider public sector in London. The framework will be structured to include flexibility to take advantage of legacy vehicles from the games, as well covering purchase, battery and vehicle leasing.

8. The MPS has coordinated the data gathering and analysis of fleet data for its own vehicles, and those of London Fire Brigade, and Transport for London. A significant amount of vehicle data was collected on type, duties, emissions, range, payload requirements, vehicle location, and procurement arrangements. Scoping criteria were then applied to the data to identify suitable vehicles. The scoping criteria were selected based on current knowledge of the performance of electric vehicles available or soon to be available in the market. The MPS has already engaged with the London Boroughs to share the feasibility approach and scope potential interest. The initial feasibility has identified 800 vehicles from the MPS, 51 from LFB, and 124 from TfL that have potential for replacement with electric or electric plug in vehicles. The total number of vehicles initially scoped (975) for the GLA Group is in line with the Mayor’s Electric Vehicle Plan, however achieving these numbers will be challenging.

9. At the time of writing, analysis of the potential of the Metronet fleet (700) has not been completed, and therefore the total number of vehicles for TfL should increase as the project progresses. The MPS is currently working on a fleet review as part of the Transport Service Improvement Programme (SIP), which may reduce final numbers albeit delivering further efficiencies and carbon reductions. In addition, these numbers are subject to satisfactory funding arrangements for both infrastructure and vehicle costs, as well as detailed feasibility for each vehicle and considerations for market development in technology over the next couple of years.

10. A number of Boroughs have been working on electric vehicles as part of their own sustainability strategies, and have expressed an interest in participating in the framework. The TfL delivery unit has also engaged with Boroughs on the provision of public electric vehicle charging infrastructure to support the Mayor’s EV plan, which aims to have 25,000 public charging points across London by 2015. It is intended that the vehicle framework is enabled for Borough participation, in order to assist with generating the economies of scale required to negotiate competitive deals with industry.

11. The Low Carbon Vehicle Procurement Programme is being explored for additional vehicle costs. The TfL Delivery Unit is leading on bids to the CENEX Infrastructure Grant Programme (£1 million) and the DfT’s ‘Plugged In Places’ Programme (£30 million) for the Mayor’s EV plan. Both programmes provide 25-50% grant funding on infrastructure costs to successful bids. Potential match funding from EDF energy is also being explored. In addition, opportunities for EU Polis funding are being explored for trialling and testing vehicles and infrastructure costs.

Environmental implications

12. As detailed in the main body of the report, the implementation of electric vehicles within the MPS fleet could bring significant environmental benefits by reducing the MPS carbon footprint and air quality emissions. The benefits will be monitored by the MPS Environmental Strategy Steering Group and reported annually in the MPA/S Environment Report. There are environmental impacts associated with battery disposal which will be mitigated through sustainable waste management processes in line with vehicle disposal legislation.

C. Race and equality impact

1. There may be equality implications associated with this report that will need full assessment during vehicle and vehicle maintenance specification before and during the vehicle procurement process. The MPS Diversity Policy and GLA Responsible Procurement Policy will be followed as part of the procurement process.

D. Financial implications

1. At current market values there is a cost difference between standard diesel/petrol vehicles and electric and electric plug in vehicles. The MPS will meet standard replacement costs in line with the budget and business plan. Any additional costs will be met through external funding.

2. There will be capital costs associated with the purchase and installation of charging infrastructure, which is equally subject to external funding. Detailed feasibility of charging locations will be carried out in the final stages of the procurement phase which is likely to incur a capital cost to the MPS of approximately £220,000.

3. It is anticipated that establishment of the electric vehicle framework will cost approximately £250,000 for additional project management, procurement and legal costs. The MPS is seeking Capital Ambition funding to meet this cost. It is recommended a proposal be submitted to the London Councils Efficiency Board in November 2009 subject to MPA approval of this report. If this process is unsuccessful, the MPS will seek a contribution from the framework users to fund its development.

4. As detailed in section one of this report, there are a number of funding sources being explored to meet vehicle and infrastructure costs.

5. There are potential revenue savings associated with the implementation of electric vehicles. Electric vehicles have reduced maintenance requirements compared to conventional vehicles as well as offering reduced fuel consumption. Based on current utility and diesel costs, running costs are approximately halved when comparing electric to diesel. Fuel budgets are currently devolved, whereas the energy budget is managed centrally by Property Services. Budget adjustments will be required on implementation to reflect this and ensure the savings are realised. It is suggested that the MPS bring a fully costed business case to MPS Investment Board and the MPA once the procurement and funding solutions have been confirmed that will detail purchase, lease, maintenance, replacement and disposal and infrastructure costs.

E. Legal implications

1. There will be legal implications associated with the establishment of the Electric Vehicle Framework. Legal review and advice on the contract documentation will be required to ensure compliance with EU/UK procurement law. Legal advice will be commissioned through the Department of Legal Services. The MPS is seeking Capital Ambition funding to cover legal and procurement costs for the framework (see above).

F. Background papers

None

G. Contact details

Report author: Nigel Jakubowski, Director of Transport Services, MPS

For information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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