Pike Research forecasts accelerating hybrid locomotive sales from 2015-2020

Hybrid electric locomotive sales will have an increasing presence in global rail markets between 2015 and 2020, according to a new report from Pike Research. During that period, hybrid locomotive sales will increase at a compound annual growth rate (CAGR) of 19.4% under a baseline forecast scenario, with annual unit sales of 109 locomotives by 2020. Pike Research’s aggressive forecast scenario anticipates that the market could achieve a CAGR of 25.4% during the same period, with annual unit sales of up to 174 vehicles by 2020. This would translate into a need for storage of 116.4 MWh of energy in 2020.

However, says Pike senior analyst Dave Hurst Hurst, growth in hybrid locomotives faces several key challenges. In Europe, track electrification will eliminate the need for either diesel or battery storage in many areas. In North America, a high-profile hybrid locomotive product (Railpower’s Green Goat, earlier post) faced a serious setback in the mid-2000s that still haunts the industry today.

In 2001, Railpower launched the first hybrid electric switching locomotive in North America, using battery energy storage, called the Green Goat. The Green Goat was designed for only one shift, but was being used for longer service, and had resulting quality issues; furthermore, the battery management system that failed to prevent battery shorts. Several Green Goats caught fire and were destroyed. Railpower sold about 55 Green Goats before the company filed for bankruptcy. Several Green Goats are still being used for light duty service, Pike notes, but the vehicles have not been available since 2007. Toshiba is the only manufacturer to currently have a hybrid locomotive available (a passenger locomotive for the Japanese market), according to Pike.

Hurst also notes that the market for hybrid locomotives faces stiff competition from newer fuel-efficient locomotives such as diesel gensets, and in many world regions, the locomotive engine does not have to meet strict emissions rules.

However, Pike expects hybrid locomotives to have a strong return on investment (ROI), as a result of the ability to use low-cost batteries. Weight on locomotives is often helpful (particularly for switching locomotives) because the vehicles need weight to help increase the friction between the wheel and the track (adhesion) during acceleration. Lead acid batteries cost less, weigh more, and will be used in many of the first hybrid locomotive applications. The passenger locomotives that have less space available than a traditional switcher or road locomotive are more likely to take advantage of lithium ion (Li-ion) batteries’ size and storage capacity. Advanced lead acid batteries will make inroads as well.

General Electric (GE) has built a plant to manufacture sodium metal halide batteries (earlier post), and is showing a prototype road locomotive using those batteries that it intends to bring to market. Nickel metal hydride (NiMH), a favorite for current hybrid automobiles, is unlikely to move into the locomotive space due to cost and competitiveness from other chemistries, Pike suggests.

The market for hybrid locomotives will likely get a boost from two important forces, according to the report. First, in the middle of the decade, new rules regarding diesel locomotive emissions will come into effect in North America and the European Union. By 2014 in the European Union and 2015 in North America, the current diesel locomotive will require substantial changes or exhaust treatments to meet emission rules. This will help drive interest in having hybrids meet these strict new regulations.

In addition, the market will receive a boost from new diesel locomotive emissions regulations scheduled to go into effect in the European Union in 2014 and in North America in 2015, which will require diesel locomotives to receive substantial changes or exhaust treatments. In addition, railroad infrastructure is growing rapidly in India and China, and emissions concerns will drive hybrid demand in those markets as well.

—Dave Hurst

Pike suggests that hybrid locomotives will be seen over the next 3 to 5 years mostly in demonstration and prototype projects. The sales of these vehicles will likely begin mid-decade in Western Europe and North America, coinciding with the tighter diesel regulations (conservatively, their respective compound annual growth rate (CAGR) is 17.2% and 13.5% between 2015 and 2020).

Pike estimates sales growth in China will be strong (a CAGR of 22.2% between 2015 and 2020) as its locomotive demand grows and urban areas look to reduce emissions.

Pike Research’s study, “Hybrid Locomotives”, examines opportunities and challenges in the global locomotive market. The report provides an analysis of locomotives and battery technologies, regenerative braking, government emissions regulations, emerging markets, and key drivers of market growth. The report includes detailed forecasts through 2020, segmented by key countries and world regions, for diesel and all-electric locomotives, genset locomotives, hybrid locomotives, and battery storage capacity needs. Key market players are also profiled.

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