A background to Natural Gas Vehicle (NGV) vehicles

NGV Pathways up to 2020

 

NGV's growing in Germany, so why not in UK?

NGV's fundamental economics 3 components to cost of CNG: – Gas commodity cost – Compression cost – Fuel duty UK petrol-cng fuel duty differential is much greater than in Germany

What about gas v petrol commodity?

Gas Prices Historically, $1/bbl has equated to 1 p/th. So $20/bbl = 20 p/th, $30/bbl = 30 p/th, $50/bbl = 50 p/th etc (where 1 therm is equal to 2 kg of gas). DTI is forecasting that oil will settle at $35/bbl from 2009 ish but gas will be in the range 22 - 28 p/th, say 25 p/th. This represents a significant ‘cost benefit’ to gas as a vehicle fuel and reflects the fact that oil is getting scarcer in the world and gas is not as a result of the exponential increase in LNG trade.

Given economics, why so few NGVs in UK?

British Gas – First move disadvantage – Poor technology (early 1990’s) – Wet gas (filling stations on gasholder sites – bad idea!) Break-up of British Gas – No UK utility interest – National Grid, Centrica, RWE, Eon – none involved LPG took the alternative fuel space – BP/Vauxhall – LPG now out of favour due to NO CO2 or NOX benefit, also oil derived Focus on trucks not cars – No product – Euro IV diesel emissions challenge (low NOX) Cheap diesel for buses – UK buses get very cheap diesel as a means of encouraging bus travel!

Sales

1997 In February 1997 the shareholders of ritish Gas plc approved the demerger of Centrica plc. British Gas plc was renamed BG plc.

1999 In December 1999 BG plc completed a financial restructuring which resulted in the creation of a new parent company, BG Group plc.

2000 On 23rd October 2000 BG Group plc completed the demerger of Lattice Group plc creating two separate companies.

2002 On 21st October 2002 National Grid plc merged with Lattice Group plc to form National Grid Transco plc.

2005 NGT sold four 4 networks to SGN, NGN and WWU. NGT became National Grid. No longer any UK NGV business

 

UK Vehicle Parc

Cars + vans (<3.5 tonnes)	Trucks (>3.5 tonnes)	Buses
Cars Around 130,000 LPG cars in UK Only around 20 CNG cars Customers confused between LPG and CNG Taxation very favourable for CNG, but No infrastructure	Commercial vehicles >32tonne, motorway haulage - use lots of diesel, great for ‘back to base’ (250 on the road) Light goods vehicles in cities – very clean and quiet (200 in London) New dual fuel vehicles in 2006	Buses great idea for CNG - depot based - quiet - fume free <20 CNG buses in UK none available in UK because buses get cheap diesel

UK totals
26 million cars (80%)
4.2 million light vans (13%)
1.9 million trucks & buses (6%)

NGV's: Fuel /Duty Grants

• Duty:
  – Differential to low sulphur diesel fixed for a rolling 3 years
  – Bio-diesel and bio-ethanol also only has a 3 year duty advantage
  – Cost to Govt is negligible given small
  number of vehicles on natural gas
• Grants:
  – up to 30-40% of cost of fueling infrastructure
• London
  – No congestion charge for CNG vehicles

CNG beats diesel over NOX and particulates. Low noise
also important for the likes of Tesco and Sainsburys. No
congestion charge

 

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