XII.b Domestic freight Costs

Costs Summary

Technology Costs

Costs Methodology

Methodology Used

The user decides which trajectory is used which defines the uptake levels of different technologies. The model applies the levels/quantities of these technologies to the input costs to provide an annual and total cost to 2050. The model covers both capital and operating costs. Operating costs include costs of maintenance, but fuel costs are not included in the transport costs (they are included in the fossil fuel costs).

For all car, bus and rail technologies, MARKAL and other confidential input assumptions have been used. These are the latest available assumptions with updates from DfT applied where available.

In order to derive a range for the cost figures, 2010 figures are used for the high estimate of costs throughout the period. Low estimates are based on the lowest credible costs of the technology in 2050.

MARKAL costs in £ per billion vehicle kilometres (km) per annum are converted into numbers of vehicles required using MARKAL estimates of average annual km per vehicle type. Costs are then spread over assumed life-time per vehicle type using MARKAL estimates of vehicle life. Each trajectory in the 2050 Calculator indicates distances travelled by technology. These are converted into vehicles required using the MARKAL assumption of average annual km by technology and the resultant number of required vehicles is costed with the per unit cost.

Caveats

The transport costs shown in the calculator do not take account of fuel costs and therefore the fuel savings associated with more efficient vehicle technologies. Savings due to reduced fossil fuel use are captured under the fossil fuel costs of each pathway. In reality, the additional upfront cost of low carbon technologies such as electric or hydrogen fuel cell vehicles may be partly or totally offset by fuel savings over time.

Technical Assumptions

Vehicle Technical Lifetime:

Rail freight 30yrs
Road freight 7yrs

Questions to Stakeholders

1) Are today’s vehicle technology costs accurately reflected in the estimates?

2) Are any of the technology costs out of date? Do you have any new estimates to add?

3) What technological progress are we likely to see between now and 2050? What will technology costs look like in 2050?

4) The model uses high and low technology cost assumptions. What is the evidence that these remain constant, rise or fall over time for the domestic freight sector?

Contacts

Lead and sign-off 2050 Costs team lead - Sophie Hartfield

Working-level analyst - Nazmiye Ozkan.