Key information
Executive summary
The Mayor has made improving London’s air quality one of his top priorities as it is one of the most significant health challenges facing Londoners. He has also committed to reduce congestion including working with freight companies to reduce the number of large lorries on the city’s roads, particularly at the busiest times. Through the Mayor’s Environment and Transport strategies (due to be published later this year) and the London Plan he will promote actions to ensure London’s air quality is improved and congestion is reduced.
The GLA and Gnewt Cargo (a leading SME with a proven logistics operator who specialises in electric vehicles), have secured circa £1.1M from Innovate UK to run a low emission freight and logistics trial from April 2017 – 2019. This will help meet these manifesto commitments and mayoral strategy ambitions through the trialling of freight collections using zero emission vehicles. This demonstrator will build on a recently completed Innovate UK funded demonstrator the GLA undertook with Gnewt Cargo which demonstrated the benefits that could be achieved through consolidating commercial parcel delivery with small electric freight vehicles, Just over 13,000 freight deliveries were undertaken by electric vans, covering 149,000 miles, delivering circa 2 million parcels each year. The demonstrator achieved a range of benefits including reduction in NOx by 71%, PM10’s by 87% and CO2 by 67% relative to conventional diesel vehicles. The demonstrator also achieved a 57% reduction in vehicle trips.
This new demonstrator will help prove the commercial viability of this technology for this size of vehicle, encouraging widespread introduction of low and zero emission vehicles to other commercial fleets operating in London and other urban areas across the UK.
Decision
That the Mayor approves:
• The receipt from Innovate UK of up to £292,093 in grant funding to manage and deliver the low emission freight and logistics trial; and
• Entry into £100,000 sub-contract with ARUP to provide data collation and data analysis support.
Part 1: Non-confidential facts and advice
1.1 The Mayor has made improving London’s air quality one of his top priorities as it is one of the most significant health challenges facing Londoners. He has also committed to reducing congestion through a number of transport initiatives including working with freight companies to reduce the number of large lorries on the city’s roads, particularly at the busiest times.
1.2 Through the Mayor’s Environment and Transport strategies (due to be published later this year) and the London Plan he will promote actions to ensure London’s air quality is improved and congestion is reduced.
1.3 The GLA and Gnewt Cargo (a leading SME with a proven logistics operator who specialises in electric vehicles), have successfully secured circa £1.1M from Innovate UK (a non-departmental body tasked with accelerating economic growth by supporting UK innovation) from their £20 million funding call for Low Emission Freight and Logistics Trials that demonstrate innovative new technologies for larger commercial N1, N2 and HGV vehicle categories. The funds secured will support a low emission freight and logistics trial from April 2017 – 2019.
1.4 The aim of the Innovate UK funding competition is to prove the commercial viability of this, demonstrating innovative new technologies for this size of vehicle category and to, encouraging the widespread introduction of low and zero emission vehicles to other commercial fleets operating in London and other urban areas across the UK.
1.5 Following a competitive grant funding application, Gnewt Cargo (lead partner) in partnership with the GLA has been awarded circa £1.1M (£813,085 and £292,093 respectively) from Innovate UK to deliver a low emission freight and logistics trial from April 2017 - 2019.
1.6 The aim of the trial is to test a range of state of the art N1 & N2 electric freight vehicle types and sizes in urban and inter-urban environments for a range of parcel sizes. The project will also install and test on-site charging infrastructure to support the 25 vehicles being tested at GNet’s central London depots. During the trial, Gnewt will carry freight for Hermes, DX, TNT and IKEA.
Background
2.1 Transport for London estimates more than 281,000 daily journeys are commercial freight. Of this total, 30% of all central London traffic and 10% of all Greater London traffic are HGV and vans, the majority of which are diesel-powered (Circa 97%). By 2030 HGV traffic is projected to grow by 43% due to the unparalleled growth in e-commerce and personal deliveries. Transport currently accounts for 63% of NOx & 52% of PM10. (Source: LoCity website, last updated November 2016).
2.2 Tackling emissions from freight vehicles is therefore crucial to improving air quality in London which is a top priority for the Mayor of London. To address this, the Mayor has run a number of smart freight trials using smaller electric vehicles. The Mayor through TfL’s LoCity initiative also provides support to businesses with fleets transitioning to cleaner vehicles and alternative fuels.
2.3 This demonstrator will build on a recently completed Innovate UK funded demonstrator the GLA undertook with Gnewt Cargo which demonstrated the benefits that could be achieved through consolidating commercial parcel delivery with small electric freight vehicles, Just over 13,000 freight deliveries were undertaken by electric vans, covering 149,000 miles, delivering circa 2 million parcels each year. The demonstrator achieved a range of benefits including reduction in NOx by 71%, PM10’s by 87% and CO2 by 67% relative to conventional diesel vehicles. The demonstrator also achieved a 57% reduction in vehicle trips.
2.4 This project provides a good opportunity to test and evaluate the viability to replace diesel equivalent vehicles with state of the art electric N1 and N2 vehicles for day to day freight transport needs. Whilst in-roads have been made in commercialising smaller electric freight vehicles, electric equivalent vehicles for larger N1 (up to 3.5 tonnes) and N2 (between 3.5 to 12 tonnes) vehicles which are the most popular sized diesel freight vehicle are largely untested and not currently commercially available. Subject to vehicle performance, the use of these electric vehicles could significantly contribute to reducing the negative impact on London’s air quality caused by existing diesel equivalent freight vehicles.
2.5 Although the Mayor’s Direct Vision Standards do not apply to these trial vehicles as they are not traditional HGV’s (which are 12 tonnes and over) pedestrian and cyclist safety is at the core of the trial. All vehicles will be fitted with on-board vehicle telematics that monitor driver behaviour and vehicle performance which helps in reducing the risks of collision with bicycles and pedestrians.
2.6 The vehicles to be trialled will be subject to the relevant TfL work related road risk requirements. Gnewt has been a bronze credited member of Fleet Operator Recognition Scheme (FORS) since circa 2014. All Gnewt drivers are trained in vulnerable road user safety and Gnewt does routine driver license checks as well as ensuring any collisions are properly recorded. Routine DBS criminal and driving license checks are also done.
2.7 The project will be delivered by Gnewt Cargo Limited in partnership with the GLA with support from ARUP. Gnewt Cargo will be responsible for operational day to day freight deliveries for a range of clients as well as management of the electric vehicle fleet and charging infrastructure. The GLA will not provide services to Gnewt Cargo. The GLA will provide project management expertise, stakeholder engagement management, contract & budget management, data analysis & reporting as well as data dissemination and exploitation for the project in line with the Innovate UK funding award. As an SME specialising in last-mile logistics in central urban areas, the majority of Gnewt deliveries during the trial will operate in the London Congestion Charge zone, LEZ and ULEZ when it launches. The density of urban areas in these zones necessitates a flexible fleet that allows parking for on-foot deliveries and one that is capable of negotiating small congested Central London roads.
2.8 As per Innovate UK request, the GLA will sub-contract ARUP to provide data collation and analysis, services for the project. ARUP were not procured competitively by the GLA for the services to be funded by Innovate in this instance, so approval of an exemption from the requirement of the GLA’s Contracts and Funding Code (the “Code”) has been secured. A single source justification form has also been considered and approved by TfL procurement.
2.9 Such an exemption may only be approved on certain grounds set out in the Code. ARUP were procured competitively under TfL’s project management framework for an earlier piece of work (the ”Agile Logistics” Project”) related to the Project and also funded by Innovate UK; and Innovate UK has insisted, as a condition of this funding, that ARUP are retained in this instance because of ARUP’s extensive experience and involvement in the Agile Logistics Project.
The main objectives of this project are to assess:
• viability to replace diesel equivalent for day to day freight transport needs;
• electric vehicle charging infrastructure viability – i.e. speed, cost and charging capacity;
• vehicle lead times, leasing terms and charging costs;
• day to day suitability for delivering in dense London urban areas;
• environmental performance - NOx, PM10, PM 2.5 ,CO2 and SO2 emissions; and
• cost, value for money and return on investment – e.g. miles per gallon vs kWh per mile etc.
Expected Outcomes
The project is expected to deliver the following lasting changes compared to diesel equivalent deliveries:
• 60% reduction in the number of vehicle trips;
• 70% less kilometres travelled;
• reduction in NOx (80%);
• reduction in PM (80%);
• reduction in CO2 (60%) emissions;
• Increased market share for electric freight vehicles due to increased demand and consumer acceptance;
• reduction in congestion as a result of reduce vehicle trips due to larger vehicle capacity;
• Improved electric vehicle charging infrastructure in London; and
• greater percentage of green deliveries for the e-commerce sector.
5.1 The GLA and TfL are subject to public sector equality duties and any collaboration agreement, third party contracts and grant funding agreement entered into by the GLA, will be consistent with these duties, and with the Mayor’s strategies and plans, including those identified in section 4 below with associated equality impact assessments.
5.2 No adverse impacts are identified for the proposed programme described in this document. Meeting the objectives of this proposal is expected to bring positive contributions to equality arising through improving air quality and reducing congestion for diverse groups of Londoners across the city.
a) Key risks
b) links to Mayoral strategies and priorities
The Mayor has made improving London’s air quality one of his top priorities as it is one of the most significant health challenges facing Londoners. He has also committed to reducing congestion including working with freight companies to reduce the number of large lorries on the city’s roads, particularly at the busiest times.
The relevant existing Mayoral strategies against which this project aims to deliver are:
• Mayor’s Environment strategy which aims to reduce London’s CO2 emissions and air pollutants (NOX, PM10 and PM2.5);
• Mayor’s Transport strategy which aims to
• reduce London’s CO2 emissions by 60% by 2025;
• Speed up the introduction of low carbon road vehicles, including electric vehicles to improve air quality.
c) impact assessments and consultations.
Consultations
• Impact assessments and evaluation of the project will be carried out to determine the effectiveness of the project in meeting the required outcomes.
• The project team will continue to consult and engage with key stakeholders including Transport for London Freight Team and GLA Transport team.
7.1 There will be no GLA net cash contribution to this project. The GLA will receive £292,093 grant funding from Innovate UK for the low emissions freight and logistics trial project.
7.2 The funding comprises £134,000 to fund a GLA grade 10 post for two years and £158,093 for project management.
8.1 Section 4.1 of the Code requires the GLA to seek a call-off from a suitable framework, where possible, or if not, undertake a formal tender process which will be managed by TfL in respect of the services. However, paragraphs 2.6 above indicate that the GLA’s third party contractor for the project, ARUP, was not competitively procured. In this regard, the Mayor may approve an exemption from this requirement under section 5 of the Code upon certain specified grounds. One of those grounds to approve an exemption is where there has been previous involvement in a specific current project or continuation of existing work which cannot be separated from the new project. Officers have indicated at paragraph 2.7 of this report that this ground applies and that the proposed contracts affords value for money. On this basis, the Mayor may approve the proposed exemptions if satisfied with the content of this report.
8.2 Innovate UK’s funding contract restricts the GLA and Gnewt from receiving funds for the project in excess of Innovate UK’s funding limits under (TSB2/2014) and the General Block Exemption Regulation (Commission Regulation (EU) No 651/2014) (“State Aid Regulations”). Innovate UK will have the right to demand repayment of the grant funding (or any part thereof) from the GLA and Gnewt if the State Aid Regulations are breached; provided that any repayment for the GLA does not exceed the actual grant amount it receives.
8.3 The foregoing sections of this report indicate that:
8.3.1 the decisions requested of the mayor (in accordance with the GLA’s Contracts and Funding Code) concern the exercise of the GLA’s general powers, falling within the GLA’s statutory powers to do such things considered to further or which are facilitative of, conducive or incidental to the promotion of economic development and wealth creation, social development or the promotion of the improvement of the environment in Greater London; and in formulating the proposals in respect of which a decision is sought officers have complied with the GLA’s related statutory duties to:
• pay due regard to the principle that there should be equality of opportunity for all people;
• consider how the proposals will promote the improvement of health of persons, health inequalities between persons and to contribute towards the achievement of sustainable development in the United Kingdom; and
• consult with appropriate bodies.
8.4 Officers must ensure that appropriate agreements are put in place between and executed by the GLA, Innovate UK, Gnewt and ARUP in connection with the grant funding, collaboration and third party data collation and data analysis support for the project.
• Innovate UK Grant Offer Letter
• Draft Collaboration Agreement
• Acceptance of conditional Offer Form for signature
Signed decision document
MD2084 Commerical Electric Vehicle Demonstrator
Supporting documents
MD2084 Innovate UK Grant Offer Letter
MD2084 Draft Collaboration Agreement