As the wires go up the costs of electrification come down

With a new government, how can the case for electrification be made afresh? Money is tight but, unlike most infrastructure investment, there are quick wins.

In this article:

• One-third of the rail network requires electrification, with battery trains offering a significant decarbonization option.
• Small, low-cost electrification projects could yield high returns, saving millions in diesel train miles.
• Industry leaders urge government to commit to decarbonization through long-term investments, supported by third-party funding.

“All that is needed is for the government to make some decisions. They don’t need to find masses of new money.”

David Clarke is senior technical adviser at the Railway Industry Association (RIA).

He explains: “I’m emphasising this as decarbonisation, not electrification.

“About a third of the network does not need full electrification, because you can deploy battery passenger trains. That is a massive change since the last strategy work.

“Four years ago, battery trains were vapour-ware. Now you can go out and buy one. The level of confidence around battery trains, rapid charging and discontinuous electrification is much greater than it was.

“One-third does not need to be electrified. One-third is already electrified. That leaves one-third.

“But then look at what previous governments have already committed to do: Midland Main Line, Cardiff Valleys, the Scottish programme, and the wild card of ‘Network North’ which includes Hull and the North Wales coast.

“That all amounts to another 15% of the network, which only leaves the remaining 15% to get to a railway that meets net zero.”

RIA calculates that very little change in the current rate of wiring delivery for ten years, after what has already been committed, is required to deliver the necessary change.

“So, crack on please with decarbonisation by battery trains,” says Clarke.

Discontinuous wiring may be fine for passenger services, but it’s not much use for heavy freight. But that sector agrees that the steps needed to deliver improvement are not large.

“There are elements within the Department for Transport that find it very hard to get their heads around small schemes such as electrification infills,” cautions Julian Worth, chair of the freight forum at the Chartered Institute of Logistics and Transport (CILT).

“They are geared much more towards the grands projets. They seem to have lost the ability to deal with small, low-cost schemes which deliver really substantial strategic benefit. That’s what I am looking for the new team in government to do.”

Worth points out that business leaders in the private sector invest in projects that have the highest rate of return. With the current state of public finances, exactly the same should apply to taxpayers’ money, he says.

“On that basis, freight electrification and capacity schemes score very highly. They almost always have a Benefit:Cost Ratio (BCR) above three.” Which means that for every £1 invested, they generate at least £3.

Worth continues: “A figure of 4 or 5 is not uncommon. And we worked out the BCR for the London Gateway project was in double figures - phenomenally remunerative for the state.”

Worth says his top request of government is to look at these small schemes, some of which cost less than £10 million. London Gateway should be first, he says, describing it as “an utter no-brainer.”

He explains: “Although London Gateway is in the South East, the trains from there are going to the Midlands, Wales and the North. That all seems to chime pretty well with the broader government agenda.

“Let’s assume a five-year Parliament. My ask is to deliver the package of infills identified by CILT in a study last year - between 50 and 60 miles in total, costing around £50m.

“Surely the country can find £10m a year for each of the next five years and get them all done and operational by the end of this Parliament? Thereby saving two million diesel train miles a year, which translates as 100 million lorry miles a year, based on 50 containers per train. By any measure of government spending, £10m is utterly trivial.”

At Siemens, Rail Infrastructure Managing Director Rob Morris largely agrees - although he’s thinking on a bigger scale.

“As a nation, we need firm commitments around decarbonisation,” he argues.

“As a supplier, we want the same thing. No new diesel or bi-mode trains from now on.

“The procurement system we have now is often based on outdated assumptions. And in dealing with short-term cost pressures, we seem to have lost sight of the big picture of what brings best value, by making the right investment.

“The new government should be thinking about its longer-term aspirations now - and working out how to overcome today’s limitations.

“The priorities are capacity, punctuality and cost-effectiveness on a low-energy, decarbonised railway that delivers for the passenger and the freight user, as well as the taxpayer. And the planet!

“That requires not just whole-system thinking, but ‘system of systems’ thinking. It’s pointless having the train paths if a sudden power demand on the infrastructure means trains cannot move.

“If you have your rail infrastructure and train procurement under one roof at Great British Railways, and you have Great British Energy set alongside it, you can optimise quickly.

“I think we are able to rule out any more diesel right now. We move to electrified and battery bi-mode. We should not be perpetuating a problem.”

At RIA, David Clarke underlines this emerging consensus: “The wisdom is that buying or leasing a battery train will be less expensive than buying or leasing a diesel train, which is the only alternative. Nobody really wants to buy new diesels, and that makes them expensive.

“Network Rail has picked up what we are saying. It is reviewing and testing our work, with a view to it being adopted as industry strategy.”

But let’s return to the immediate problem: there is no money. The still-fresh Chancellor of the Exchequer has squashed rail reopenings, and has not overturned her predecessor’s truncating of HS2.

How, then, should all these new overhead wires be paid for, when the argument has to be balanced against pay rises for doctors or train drivers, for more hospitals or extra funding for the armed forces facing a more dangerous world?

“Today’s problems are driven by lack of money,” asserts Rob Morris.

“Organisations such as ourselves, and pension funds, like to invest in infrastructure that brings long-term socio-economic value. So, we have to change the treatment of the country’s finances to let third-party funding in.

“We are up for that, if the risk is in the right areas. Siemens will take 100% risk associated with our own technology. What we won’t do is take on risk for things over which we have no control, so we need to understand how the government will want to apportion risk.”

Siemens’ electrification and rolling stock engineers have conducted eight route analyses around the country, looking at what they call “the right thing to do from a whole-system perspective,” combining performance, cost and decarbonisation.

“On none of those do we have diesel,” explains Morris.

The studies looked at battery bi-mode and discontinuous electrification for routes where new trains are likely to be needed within a few years. In some cases, this could mean retro-fitting batteries to existing trains.

Morris says the financing could be packaged with the costs of electrification. It might come from rolling stock leasing companies where a longer lease of train life follows. It could be based on an extended maintenance contract or a fee based on availability of infrastructure.

“For example, we identified around 30 rural routes where we could deliver modular signalling with our own financing.

“We looked at the operational cost savings Network Rail could make and the extra revenue that might be available from more train paths. We’ve looked at the option of payment for availability - we’ll promise X number of train paths available for Y% of the time, and get paid to deliver them, with penalties if we don’t.

“Whoever is financing these schemes - us, a pension fund or infrastructure investor - the result means a long-term revenue stream that justifies the up-front cost, tied to our performance and to reduced costs or increased revenue. It’s a win-win.”

It is a different method to private financing of the past.

Siemens warns that procurement has too often focused on little hotspots, which lead to extra costs at a later date. As an example, it points to the Ordsall Chord, a short line which links Manchester Piccadilly and Oxford Road to Manchester Victoria. It was designed to increase capacity and reduce journey times.

Says Morris: “The chord was a really good idea, but all the stuff that should have been done around it was not done. It created a bottleneck instead of a solution.

“It’s the same with electrification. If you have a steady pipeline, even if it is discontinuous, the supply chain can resource a steady state of cost and risk.”

Freightliner argues that instead of funding more overhead wires, investment should be channelled into reducing track access charges to promote use of freight bi-mode locomotives (see our exclusive interview with managing director Tim Shoveller in the next RailReview).

“It’s not an either-or question - it requires both,” counters Julian Worth.

“The best bi-mode on the market at the moment is a Class 99. But in diesel mode, it barely performs as well as a much older Class 47. Yes, it is capable of line haul on diesel, but it isn’t going to pull a big train very fast.

“It could trundle along the Joint Line between Peterborough and Doncaster, but on a busy stretch of main line it would hold up other traffic.

“A Class 99 costs upwards of £6m. That is one heck of an outlay for a whole fleet, whereas the infill electrification schemes can all be used by existing locomotives.”

In early September, Network Rail and the Department for Transport waived track access charges for new freight flows for six months, in a move to encourage modal shift from road to rail.

The charges are unlikely to be removed completely, but Worth argues: “Tim’s broader point on track access charges is about attracting investment to the railway. The charges keep going up, and there is no guarantee of access once you’ve made an investment.

“There’s a definite policy disconnect there. So, an early action for the new government: re-base freight track access charges and link them to road lorry fuel duty, which has been frozen for many years and in real terms has gone down.”

What about the advocacy for discontinuous wiring by the supply chain and the passenger railway? That’s no good for heavy freight.

“If you look at the routes we propose for electrification, the vast majority are already gauge-cleared. Therefore, all the tricky bridges have already been tackled to get 9’ 6” containers on standard wagons. There would be very little, if any, structural work to get the wires up. So, for most, there would be no case for discontinuous electrification.

“The routes where it is an issue are for aggregates rather than intermodal traffic. The Berks & Hants, for example, with Mendip stone trains. And, to a degree, the Hope Valley.

“What isn’t viable is a ten- or 15-mile gap in the wires. It would only be a problem on some of the remote routes that will never be electrified, such as the Far North and West Highland lines in Scotland. For that, HVO (hydrotreated vegetable oil) fuel could offer a long-term option.

“What I don’t want is all-singing, all-dancing electrification - I want low-cost options up to 80mph. We can get the cost down to £600,000 per single track kilometre, compared with £2.5m on the Great Western, and I’m hearing £3m on the Midland Main Line. That £600,000 is for the masts and wiring, because very few structures will need altering on our gauge-cleared schemes.

“Put it this way,” Worth concludes: “For all the electrification schemes we could possibly ask for, the cost is no more than the cancelled Stonehenge tunnel road scheme.”