Gearing up for the next phase of transport decarbonisation

And you've invested an order of magnitude of about 500 million over four years in decarbonization already.

Can you talk a little bit more about that infrastructure piece and how important that is in addition to the vehicles?

We've got about 70 depots in our portfolio, but there's a good sort of about 20% of those that are based on what the current grid system looks like.

It's going to be very, very difficult for us to electrify at a sensible price point because you just simply don't have access to a network that's going to provide sufficient amount of power.

Our average depot is about 100 buses, broadly speaking.

The battery capacity is anywhere between 400 to 500 kilowatts, and those buses come back in the evening, the majority of them being required to be charged in a very short period of time overnight.

So you can just imagine the size of the energy capacity that's got to be able to go into these depots in that very short period of time, and that's the limiting factor for us.

And so what we're doing at the moment, we're trialing some clever ideas with Palmer Energy.

They've got a battery energy storage process, which seems to be completely agnostic as to the battery type.

And we are starting to install some of that capacity in depots to trial as to can we mitigate some of the size of the pipe we need in order to be able to get sufficient energy onto the depot at the time that we need it? And can we use that as a bit of an opportunity for energy arbitrage as well in terms of time of day charging, etc.? ?

UK government funding for decarbonisation is tightly constrained.

There's a lot of uncertainty.

What are your views around how to navigate that and planning discipline when public funding is unpredictable?

I think government funding has been incredibly important on the basis that the total cost of ownership of these vehicles and the infrastructure is just so much greater than the diesel equivalent.

at the time when we kind of embarked on this journey.

Now we're sort of moving to a point where the bus pricing stayed broadly the same as it was in 21, 22, despite relatively high levels of inflation.

But what we're getting is a bit more certainty on the battery life.

You know, the broad maths is a bus lasts 16 years, battery 14 years.

That means I've got a two year gap.

How am I going to fill that two year gap? We're trying to figure out clever ways to be able to cross that last little bit, but there's absolutely no doubt that the government funding has been incredibly important.

It doesn't only go into the bus price delta.

It's about 350,000 pounds for a diesel bus, 450,000 pounds for an electric equivalent, but it actually goes into the infrastructure as well, which is quite a large barrier.

You enter the millions of pounds to be able to electrify some of these depots.