Vehicle manufacturers lack incentive to promote efficiency, says Riversimple

Speaking to delegates during a ‘Dragons Den-style’ event held by Policy Exchange in London on Friday (27 January), Riversimple’s founder Hugo Spowers pitched an idea to transition to a completely low-carbon transport sector which leans on a “portfolio of solutions”, including hydrogen and battery-electric vehicles (BEVs).

Pitching to the ‘dragons’ including Committee on Climate Change (CCC) chair Lord Deben and Bloomberg New Energy Finance (BNEF) head of strategy Michael Wilshire, Spowers claimed that hydrogen vehicles are a “critical element of the puzzle”, but that the technology has yet to be embedded within the sector’s low-carbon transition.

“The principle barriers aren’t technical,” Spowers said. “They’re to do with people, politics and business inertia. The technology is available to transform the carbon performance of our vehicles, but only if we make efficiency profitable.

“Unfortunately, if you sell cars, there is little incentive to improve efficiency other than regulation which is proving a very blunt instrument. We can’t have a sustainable industrial society if we continue to reward manufacturers for doing the opposite of what we are trying to achieve.”

Spowers suggested that customers usually discount future costs associated with purchasing vehicles. He told the ‘dragons’ that engagement with low-carbon vehicles would be improved by switching to “performance contracts” that see consumers and manufacturers create contracts on all aspects of the car. Insurance and fuel were two specifics to the contracts that, Spowers believed, would create a demand for efficiency from consumers while changing financial drivers in manufacturing from “obsolescence to longevity”.

Brown versus green

Spowers founded Riversimple in 2007 with the aim of bringing hydrogen fuel cell cars to the market, while simultaneously promoting sustainability within the transport sector. The company has since introduced the Rasa, a two seater ‘network electric’ car powered by hydrogen. The prototype was created with the help of a former chief designer for the Fiat 500 and, further funding permitted, will have 20 cars ready for Beta testing later this year.

On Friday, Spowers reiterated that hydrogen remains an underdeveloped area in the low-emission transport sphere, but that it could create significant opportunities for policymakers. He warned that placing transport demand onto the grid through BEVs wouldn’t be as beneficial for the UK’s carbon emissions as integrating “brown” hydrogen vehicles into the mix. Brown hydrogen alludes to hydrogen generated from natural gas, and Spowers claimed that this would act as a valuable bridge until “green” hydrogen – generated from renewables – became widely available.

Currently, around 85% of produced hydrogen is “brown”, but using this as a fuel source can still create vehicles, such as Riversimple’s Rasa, with a CO2 efficiency rating of 40g/km. In comparison, incumbent manufacturers are currently creating BEVs with ratings of around 90g/km.

Fuel-cell vehicles can run up to five times longer than their all-EV counterparts, but the technology has so far struggled to leave an impression amongst consumers. High upfront capital costs continue to act as a deterrent for both the energy and transport sectors.

But this hasn’t stopped the industry from developing. Late last year, business management consultant E4tech published the Fuel Cell Industry Review report for 2016. The report noted that fuel cell industry shipments grew by two-thirds compared to 2015 levels – with transport-related fuel-cell capacity doubling to 280MW.

However, at the Policy Exchange event, Lord Deben questioned the use of hydrogen from naturally-sourced gas due to the UK’s efforts to move away from fossil fuels. He argued that the current grid and infrastructure was being replaced to facilitate BEVs and that hydrogen may not have a place in the transport sector.

In response, Spowers noted that, with a 300-mile driving range, the Raza could be ideal for long distance travel, although he acknowledged that BEVs would serve a purpose in urban areas for low-mileage transport. Spowers said hydrogen is similar to electricity in that it can be generated from any source – while the UK moves to decarbonise the grid with renewable energy, regionally-sourced hydrogen could be used to lower emissions in the transport sector until supply chains and policies are in place to enable a green hydrogen rollout.

Cost-competitive

Spowers also had to field tough questions from BNEF’s Wilshire, who claimed that a successful increase in market share for fuel-cell vehicles would hinge on them matching the rapid fall in battery costs, which are expected to fall by a factor of three in the coming years – BNEF has previously estimated that battery costs had dropped to $350kwh in 2015 from $1,000 in 2010.

Yet, the rise in battery costs and performance was actually a chief concern for Spowers. With companies such as Tesla trying to increase driving range by installing bigger batteries, Spowers suggested that vehicles would become less-efficient as a result.

“Bigger batteries make the vehicle less efficient,” Spowers added. “Tesla Model batteries weigh the same as our entire car. Vehicle efficiency is dependent on weight. If you are focusing on a renewables system, energy efficiency becomes the primary constraint.

“Hydrogen and electricity should act as our two primary energy vectors and will deliver far greater economic benefits than either of them can on their own. But Hydrogen has a similar behavioural pattern in both range and refuelling to traditional petrol cars. As we scale the volume, it becomes progressively harder to support BEVS and much easier and economical to support hydrogen cars.”

edie’s innovation month

The month of January has seen edie shift the editorial spotlight to green innovation, with a series of exclusive interviews, features and podcasts running throughout the month to celebrate the very best of emerging clean technologies and low-carbon systems.

Change will not happen without genuine innovation and so this month will explore the bleeding edge where change is really happening. From emerging tech to new business models; breakthrough approaches and creative leaders, this editorial focus has sought to investigate the real game-changers and sort the facts from the fads.

Read all of edie’s innovation content here.

Matt Mace