Buses will have to fight for green funding

Are green buses being neglected? A recent announcement about future green transport appears to suggest that buses may have to fight their corner very hard against other competing modes, just as huge headways have been made.


There is not going to be a fifth round of the English Green Bus Fund (GBF).

The four previous GBF rounds incentivised local authorities and operators to buy hybrid buses. Encouraging this investment aimed to speed up technological development and support the industry in moving towards full electric buses.

In 2010, 2011 and 2012, the subsidy was set at 100%, 90% and 80% respectively. In 2013 a tiering system was introduced, with subsidy for hybrids dropping to 50% and full electric remaining at 80%. The same year saw a low take-up of the funding – anecdotal feedback from operators suggests this was because the subsidy dropped too low to be enough of an incentive.

In total, over the four rounds of English GBF, 87.13m was used to support 1,165 green buses. Meanwhile four rounds of Scottish GBF supported 126 green buses with 10.1m.

And, if anyone is in any doubt about the effectiveness of government support, it is telling that the devolved governments in Northern Ireland and Wales have not provided any GBF; the result is not a single green bus.

Hello OLEV

Now the Government is shifting focus, creating the Office for Low Emission Vehicles (OLEV) based in the Department for Transport (DfT) with the intention of having a UK-wide policy covering all modes.

In November 2013 OLEV made a call for evidence to “inform the design of the 2015 to 2020 phase of Government measures to support the early market for ultra low emission vehicles (ULEV).”

The result, published in mid-Maysets out key elements of the proposed ULEV support for 2015-20. Detail of the measures will be made by the autumn. The package includes 30m for buses – significantly less than previously made available – plus 100m for research and development across all sectors.

As different technologies fight for a share of this fund (which gets increasingly small when spilt by year and sector), it is essential for the green bus industry that its voice is heard.

After a long period of uncertainty about the future of the GBF – uncertainty that has impacted on business planning and R&D – clarity from government about the future of green bus funding is welcome. It is good to see the government listening to and responding to industry.

However, the initial 30m pot is low in relation to the total committed so far through GBF. Likewise, the 100m R&D investment, when broken down by sector and by year, risks being less lucrative than it first sounds. Some are concerned that buses could be neglected in favour of other types of transport during any bidding process.

Finally, at this stage, the devil is in the detail. There are critical questions for industry – with real business impact – that still need to be answered. Will this new funding provide the long-term certainty that GBF didn’t? How will the R&D funding work and who will be able to bid for it?

Until we have answers to these questions, it is essential for the green bus industry to keep campaigning for its fair share.


One of those voicing concern is BAE Systems HybriDrive Solutions, which says: “The GBF helped us transform our business into a global leader, exporting to four continents and getting nearly 700 buses on the roads in the UK.

“The absence of a fifth round of GBF has been a real issue outside of London, though the recent announcement of the ULEV support consultation outcome is a positive development. Clearly effective implementation of this will be key if the industry as a whole is to continue to flourish here and abroad.”

It’s a concern partially shared by Frank Thorpe, GKN Hybrid Power, Head of Bus Systems. “Generally the ULEV report is welcome,” he says, “because it keeps low carbon technology at the top of the agenda and it mentions buses as a very visible way of promoting this technology.

“My concerns are that for this funding to be effective it should assist in the transition from subsidised technology to commercially-viable technology.

“We are UK-based and creating jobs through these initiatives; that is good news. However, more importantly, we are establishing the knowledge and skills base in this country, which will develop jobs for the future as our technology is applied globally.

“The ultimate goal of zero emissions is very attractive but we need a commercial plan that deals with the transition away from standard diesel buses. Obviously you cannot just dump the existing vehicle parc overnight and the timing and funding of any transition roadmap is crucially important.”


Transport for London (TfL) has 185 GBF-supported buses in service, with 46 on order. Also, there are 343 TfL-funded hybrids in service, with another 192 on order. There are currently more than 170 New Routemasters in service, with another 96 to be delivered by the end of June. These are also TfL funded and it is on course to have 1,700 hybrid buses in service by 2016, including 600 New Routemasters.

Says TfL Director of Buses Mike Weston: “TfL welcomes OLEV’s proposed funding and believes the structure of the funding will encourage manufacturers to ensure their products become more competitive, to allow operators to build strong business cases for their deployment and take advantage of the funding available.

Transport for London's Mike Weston
Transport for London’s Mike Weston

“TfL has clear plans for the continued deployment of green buses and while 2020 is a reasonable horizon for existing technology, our trials of alternative technology such as hydrogen, pure electric and induction charging will help inform policy beyond 2020.

“We are clearly seeing the electrification of buses, with the series hybrid being the first step in that journey. The challenge is how the electricity required to drive the vehicle is delivered to the bus. Existing hydrogen and diesel hybrid both allow on-board generation giving ultimate flexibility, and new technology, such as induction charging, gives other opportunities.”


The ULEV announcement is welcomed by CEO Mike Hawes, CEO of the Society of Motor Manufacturers and Traders (SMMT): “We called for a balanced approach to the funding, allocated to cover all areas of the UK automotive industry. SMMT’s submission to OLEV suggested that government direct funding to three key areas (incentives, infrastructure and R&D).

“We also called for OLEV to consider where else government could provide funding for other vehicle segments – i.e. longer-term funding for low carbon buses and incentivisation of low carbon trucks.

“We welcome the view to 2020; this is needed to maintain confidence within the ultra-low emission vehicle market and is a clear signal for investors. There will be a need to review what is required after 2020 but we are happy with the strategy as set out to 2020 for the time being.”

Alexander Dennis

Alexander Dennis Limited (ADL) has a wide range of green buses in its line-up, either available now or coming in the next few months.

In addition to its single and double-decker hybrids, using BAE Systems HybriDrive, which it offers in right and left-hand drive, is its Gyrodrive, an 18m joint venture underway with GKN Williams, and which has already completed successful first-stage trials at Millbrook. There is also its Virtual Electric single-decker, which will go into operation in Glasgow shortly.

ADL CEO Colin Robertson tells routeone: “We have now delivered over 700 hybrid buses in the UK and it is clear that they have a vital role to play in the progressive development of greener, cleaner transport fleets.

“However, the investment needed to sustain this activity is multi-million and we need the continued support of government, through research and development initiatives and gap-funding that can stimulate purchases.

“The UK is at the forefront of green technology and it is imperative that we continue to invest in the future, backed by like-minded government teams. We should never lose sight of the fact that green technology is supporting thousands of jobs across the country, as well as contributing significantly to major clean air initiatives.”


The firm has supplied 193 GBF supported buses, and is the UK market-leader supplying hybrid single deckers (Solo, Versa and MetroCity) with super-capacitor technology.

It also leads the way in full electric buses, 53 to date with a further 20 on order and is forecasting 100 electric buses in service by the year end.

Says Optare Deputy CEO Glenn Saint: “The changes to funding and the announcement of ULEV are welcomed. It is our view that the proposals offer support in a graduated way that will support the future roll-out of electric bus operation throughout the UK.

“Optare sees that the capacity and range of EV buses is practical today and will become increasingly prevalent in the coming years, as we increase energy densities and charging options. The funding proposed gives opportunities for both buses and infrastructure and we look forward to helping our customers access this technology. The timeline to 2020 is sensible, given the pace of change of technologies and the current maturity of products.”


Volvo’s low-carbon buses are the 7900H single-deck hybrid and B5LH double-deck hybrid, both now being delivered at Euro 6. The B5LH has been supplied with Wrightbus bodies, although a recent order for Stagecoach in Scotland will have ADL bodies.

It has supplied 490 hybrids to date (UK registered) and has 100 on order. The 490 comprise 44 single-deckers and 446 double-deckers. These statistics make the UK the biggest market globally for the Volvo hybrid buses, which use the parallel system. The Volvo electric hybrid is already in test service and it will see more projects in operation over the next two years.

Says Volvo Bus UK & Ireland MD Nick Page: “A limited number of hybrids have been supplied without GBF support, but the GBF has been critical to the success so far and the kickstart needed.

“The announcement from OLEV is very positive news as buses now take their place in the OLEV scheme (previously not included) and it reinforces the role of low carbon developments.

“It is a pity that the GBF in England has lapsed while we await the details of the OLEV scheme but ultimately the low carbon bus must become a 100% commercial decision for the operator.”


Wrightbus offers six green products: StreetLite Micro Hybrid, StreetLite EV (Electric Vehicle), StreetLite EV with Induction Power Transfer, StreetLite Flywheel Hybrid (available from Q1 2015), New Routemaster, and Gemini 3 in partnership with Volvo.

In partnership with Volvo it has delivered 300 hybrid double-deckers. It has supplied eight StreetLite EVs for Milton Keynes Council.

Says Wrights Group MD Mark Nodder: “Inevitably the government has a role to play in stimulating market requirements and motivating manufacturers and operators.

“The GBF has been a successful example of government intervention and led to environmental benefits and economic benefits by providing work for British manufacturers.”


Stagecoach has 380 hybrids, 72 buses on 100% biofuel, 1,250 on a B30 blend of 30% biofuel, 51 gas buses and six hydrogen buses.

Says Corporate Communications Manager Lindsay Reid: “For many years we have been the UK’s biggest investor in hybrid buses. The GBF is an important resource to support operators investing in state-of-the-art eco-buses, costing more than standard vehicles.

Stagecoach has 380 hybrids and for many years has been the UK's biggest investor in hybrid buses
Stagecoach has 380 hybrids and for many years has been the UK’s biggest investor in hybrid buses

“Simply switching existing cars from petrol/diesel to electric does not solve congestion issues that drain money from our economy. However, investing in greener buses that encourage people to switch some journeys from car to bus does make a positive impact.”

Go-Ahead has 200 green buses in total – 76 bought with GBF support. Says Communications Director Sarah Boundy: “We continue to look at alternative and innovative means. With Williams Hybrid Power we’ve introduced a flywheel energy storage application.

“We recognise the potential for mass market hybridisation to become a tangible reality and we’re keen to ensure Go-Ahead plays a lead role.”

First operates 151 hybrids with GBF support, and new orders mean that by the end of the financial year it will operate 425 low carbon buses.

Says Business Efficiency and Engineering Director, David Liston: “I think the uptake of low carbon-certified buses will increase dramatically over the next few years, especially if the enhanced BSOG entitlement remains in place.

“While we welcome the Government’s commitment and investment in ULEV, it is somewhat disappointing that a greater proportion of the funding has not been earmarked for the bus industry.

“Investment in buses stimulates local economies, reduces congestion and helps air quality. Investment in cars does not reap the same rewards.”

National Express runs 48 hybrid ‘deckers, which it says it would not have bought without GBF support. Development Director of National Express Bus, Martin Hancock, says OLEV planning to 2020 is not sufficiently far ahead: “Inevitably there will have to be a mix of vehicle propulsion systems.

“There may be a desire for pure electric vehicles, but in reality the country does not have the generating capacity to meet potential power needs, hence current discussions about paying users to ‘suffer’ an interruption to their supplies.

“We should be planning for a rolling 10-year period. While this is less than the usual 15 years for a bus, it is still a reasonable period for investment purposes.”

The nub of it

Arriva has 204 hybrid ‘deckers, 21 gas buses and eight Milton Keynes StreetLite EVs in service.

Operations and Commercial Director Mark Yexley neatly sums up the requirement for support and where green buses could be heading: “Looking at these buses from a narrow financial point of view, we would not have been able to justify the investment without GBF, the 6p per km support and the real fuel savings being achieved.

Mark Yexley: “Environmental issues will quickly reassert themselves as the economy picks up”
Mark Yexley: “Environmental issues will quickly reassert themselves as the economy picks up”

“Taking away one of these features would make it very difficult to justify the extra investment over and above a standard diesel.

“In this context the announcement of a 500m fund for 2015-2020 is really helpful. Although the amount definitely allocated to buses is relatively small, 50% of the 500m is unallocated and that must offer an incentive for the industry to compete for this.

“It is also reasonable to assume that buses would feature in the 35m allocated to a city project. Some certainty on funding would be welcome from a planning point of view, and a five-year window is a pretty long time in political terms.

“From a broader perspective we believe that, having taken a slightly lower profile during the recession, environmental issues will quickly reassert themselves as the economy picks up again.

“While it is in its relative infancy, we suspect that all-electric buses – certainly for city fleets – will form a major role in this future, although hybrids also have an important part to play, both in giving us access to practical and reliable low emission vehicles now, and also for keeping the activity at a high level to develop lightweight, but high-capacity batteries.”

Critical stage

We are now at a critical stage.

Without government support the low carbon bus industry will default to low cost-low benefit solutions for which there is a simple economic case today; in other words operators will adopt them regardless of any government support. However, this would leave the industry well-short of achieving the government’s aim of zero-emission vehicles in city centres.

The implementation – what the rules will be – for determining how the OLEV funding is actually allocated will be critical. It is vital that the government focuses its funding on only those technologies that align with its stated long term objectives, i.e. significant clean air benefits and reductions in carbon emissions.