homedecarbonisation in the rail sector

Decarbonisation in the Rail Sector

By Neil Kirkby
16 May 2023

MD - SSE Energy Solutions

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The UK rail sector is not only a critical component of the country's transportation infrastructure but also one of its largest energy consumers: the rail industry was responsible for 0.5% of the entirety of UK emissions in 2020 and Network Rail’s energy costs are expected to cross the unprecedented £1bn threshold in 2023-2024. The rising cost of electricity and mounting pressure to meet sustainability and net-zero targets have brought the sector's energy consumption under increasing scrutiny and hastened the need for action. This is also compounded by the UK’s ambitious goal of net zero carbon emissions within the rail industry by 2050. Given the sheer size of the sector, and rail's already strong green credentials, it is perfectly positioned to lead the race to net zero, creating more sustainable supply chains, sourcing more energy from renewable sources, and speeding the adoption of new technologies along the way.



The decarbonisation of any transport industry is inevitably complex, with an evolving regulatory landscape, high investment requirements, and disparate assets to be considered. Critically, however, these challenges are not unique to the rail industry and have not prevented other transport industries from taking significant steps towards decarbonisation. Therefore, whilst these challenges are not small, they are certainly not insurmountable.

Finance is one of the significant hurdles faced by the UK rail sector in its decarbonisation efforts; improving energy efficiency, infrastructure electrification, and sourcing renewables for energy all require new and clean technology upgrades that require substantial investment. For the sector to attract necessary investment, a base level of policy and regulatory stability is required to allow private finance to take considered view of returns on long term assets.

Fortunately, this challenge has been met by a growing trend of investment—from private and public institutions—into green energy infrastructure which can be leveraged by the rail sector. SSE, for example, is investing £25bn into this, which the UK rail sector could certainly benefit from.

In conjunction with infrastructure investment, a large and country-wide up-skilling initiative is required to deliver these installations across the network. Currently, a lack of expertise and a London-centric workforce creates a production bottleneck in delivering the necessary infrastructure. To meet this challenge, we must take this opportunity to train and bring people into the workforce which will ultimately provide them with a valuable and highly translatable set of skills. Investing in communities can help tackle this problem. SSE will soon be announcing a new regionally focused strategy designed to better connect us with communities and believe it is essential to upskill a new generation and take everyone with us as part of a fair transition to renewable energy.

This, importantly, includes some of the UK’s industrial heartlands which traditionally served as the production backbone of the rail industry. SSE’s plans for new business hubs in cities such as Liverpool, Manchester, Birmingham and Leeds have already been met with considerable enthusiasm from prospective trainees and are part of their wider Net Zero Acceleration Programme, expected to create over 1,000 jobs in 2025, alone.



Despite the challenges, the race to net zero also creates a set of unique opportunities for innovation, growth, and sustainability. With a clear commitment to reducing emissions and increasing energy efficiency, the rail sector can position itself as a leader in the transition to a low-carbon economy.

One of the most promising opportunities lies with scaling up and implementing innovative and exciting technologies that have demonstrated their technological proof-of-concept. The UK with a rich history and fondness for trains coupled with its globally recognised expertise in driving innovation, is well-positioned to scale up new rail technology. For example, hydrogen-powered trains have already been showcased to deliver significant environmental benefits in the form of reduced emissions but are yet to see a substantial scaling-up agenda.

A further opportunity in the UK rail industry addresses the energy intensity of the sector. There are existing mechanisms to help the sector buy greener energy. For example, PA Consulting see power purchase agreements (PPAs) of which there are now examples in the sector, as an important lever that can be pulled by the rail industry to speed its decarbonisation efforts.

In addition, the sector should consider diversifying its energy asset portfolio (e.g. solar panels or heat pumps). By investing in self-generation, the industry can reduce its dependence on the grid and reduce its exposure to risk and price volatility; together, these can improve cost-efficiencies as well as overall risk management. There are promising pilot projects, already, involving the utilisation of the rail network’s large land coverage to install solar panels. Govia Thameslink Railway, for instance, in partnership with Network Rail, installed 526 solar panels at Denmark Hill Station and Streatham Hill depot producing the energy equivalent of 45,713kg of CO2 – that’s enough to power 9 homes for a year. These solar panels can also be used to match power demand more flexibility and even serve as a new revenue stream through ‘giving back’ to the electric grid during periods of electricity production surplus.

Furthermore, the challenge of decarbonisation also provides an opportunity for the rail industry to establish long-term, productive, and trustworthy partnerships to help deliver the required changes and remain at the forefront of technological advancements. At PA Consulting, we certainly emphasise that establishing trust and productive relationships with private sector organisations will be crucial for establishing a shared vision for the industry, reduce costs and risks, and drive innovation to keep the UK at the forefront.



As the UK rail industry steams ahead with its decarbonisation efforts, the opportunities for innovation, diversification and partnership are abundant. Whether it is scaling up promising technologies like hydrogen-powered trains, diversifying the energy asset portfolio with solar panels, or up-skilling the UK’s workforce and creating 1000s of jobs, the industry is on the right track to deliver sustainable transportation. While financing remains an obstacle, the industry is seeing significant investment from various organisations, paving the way for a cleaner and greener rail network.