Over the last few years, there has been a lot of loose talk about ‘disruptive technology’ in the transport space. For instance, in 2014 researchers down in Wellington started talking about how autonomous vehicles, electric vehicles, and ride-hailing apps would ‘disrupt’ the entire transport sector. From an Idealog article at the time:

In about 15 years, how we move on the roads will be completely disrupted. Yet we continue to build roads assuming it will be business as usual, according to the New Zealand Institute of Economic Research’s researcher Nick Allison.

Allison notes the history of New Zealand’s transport policy has been non proactive. “A period of under-investment in land transport has led to the congestion problems in Auckland. Today we continue to build roads assuming a business-as-usual future,” he says in his paper (Disruption on the road ahead! How auto technology will change much more than just our commute to work)

At the time, I wrote a few blog posts expressing my skepticism. I pointed out that the history of transport technology innovation showed that changes to how people travel occur infrequently and incrementally, that there were likely to be significant lags up uptake of new technology, and that, most of all, the technology spruikers seemed to be ignoring electric bikes, which are revolutionising many people’s bike commutes in real time.

I remain skeptical. But of course, assumptions about what is possible can change quite rapidly – that’s literally what ‘disruption’ means.

So I thought it would be instructive to look at a market where disruption has come hard and fast: the electricity market. Over the last decade, the price of solar power has dropped dramatically, which is rapidly upending the market and leaving forecasts behind:

In the wake of Trump’s decision to pull out of the Paris Agreement to halt climate change, the falling cost of solar power is an important bright spot. As Paul Krugman wrote in the New York Times, it means that economics, not policy, may be enough to forestall catastrophe:

At this point, claims that trying to limit emissions would cause vast economic harm have lost all credibility: The same technological progress in alternative energy that is marginalizing coal would make the transition to a low-emissions economy far cheaper than anyone imagined a few years ago.

But disruption always creates winners and losers. As Krugman points out, falling costs for solar power have boosted that industry – but they have also cut the legs out from under coal mining. That was starkly highlighted in recent news from India: Ian Johnston reported in May that India is cancelling its plans to expand coal-fired power plants as solar electricity is now cheaper than coal:

India has cancelled plans to build nearly 14 gigawatts of coal-fired power stations – about the same as the total amount in the UK – with the price for solar electricity “free falling” to levels once considered impossible.

Analyst Tim Buckley said the shift away from the dirtiest fossil fuel and towards solar in India would have “profound” implications on global energy markets.

According to his article on the Institute for Energy Economics and Financial Analysis’s website, 13.7GW of planned coal power projects have been cancelled so far this month – in a stark indication of the pace of change.

In January last year, Finnish company Fortum agreed to generate electricity in Rajasthan with a record low tariff, or guaranteed price, of 4.34 rupees per kilowatt-hour (about 5p).

Mr Buckley, director of energy finance studies at the IEEFA, said that at the time analysts said this price was so low would never be repeated.

But, 16 months later, an auction for a 500-megawatt solar facility resulted in a tariff of just 2.44 rupees – compared to the wholesale price charged by a major coal-power utility of 3.2 rupees (about 31 per cent higher).

“For the first time solar is cheaper than coal in India and the implications this has for transforming global energy markets is profound,” Mr Buckley said.

“Measures taken by the Indian Government to improve energy efficiency coupled with ambitious renewable energy targets and the plummeting cost of solar has had an impact on existing as well as proposed coal fired power plants, rendering an increasing number as financially unviable.

This is having knock-on effects on the Australian economy, which has been relying on India as a destination for its coal exports. For instance, house prices in Perth are falling as economic and population growth from their mining boom begins to unwind. And it illustrates a broader point: When disruption does happen, it means that companies’ and governments’ investment plans must change in response.

Put simply, when the price of solar panels drops dramatically, you can’t keep building coal-fired generation. Some coal plants you had planned will never be built – and some that you’ve already built will have to close early, at a loss.

If you think there is a significant chance of a major disruption in transport technology, then it should make you more cautious about your about investment plans. That’s because future disruption will raise the risk associated with building things today to meet long-term demands. Some of them may turn out to be unexpectedly bad ideas.

Another approach you could take would be to build things that are more adaptable to future disruption. That means, for instance:

  • Building infrastructure that can easily be re-purposed for alternative uses or adapted to changing needs. The Northern Busway was brilliant on this, as the same space could be used for cars, trucks, bicycles, flying car landing strips, or many other things, if the busway wasn’t a success. (Which it was, in spades.)
  • Not building ‘gold-plated’ infrastructure when there are cheaper, more flexible options that could be built at a lower cost without preventing you from pursuing a higher standard of infrastructure in the future. Looking at you, East-West Link…

A second important consideration is that if there is a substantial risk of disruption, you should absolutely not have rules that are premised upon the idea that existing patterns will continue indefinitely into the future. Transport and urban planning is guilty as sin on this front: it generally looks at the behaviour of today and assumes that it will remain fixed for all of time.

What do you think about the odds of disruption in the transport sector?

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36 comments

  1. I love the concept of EV as a stepping stone, especially as some degree of autonomy comes online (increasing safety, but possibly inducing more travel) – Currently the only viable battery tech is lithium-ion, which has issues. Thermal runaway, environmental damage to produce (same criticism of all batteries and PV cell construction), and lifespan of only 400-1200 cycles.

    What excites me is that once lithium–sulfur battery tech is commercialised (currently bespoke short-run only), over twice the capacity of li-ion and 1500 cycle lifespan becomes a reality – Resulting in massive uptick of EV viability.

    If interested in the environmental impact of lithium batteries: http://www2.epa.gov/sites/production/files/2014-01/documents/lithium_batteries_lca.pdf – The U.S. Environmental Protection Agency’s Design for the Environment program concluded that batteries using nickel and cobalt, like lithium-ion batteries, have the “highest potential for environmental impacts”. It cited negative consequences like mining, global warming, environmental pollution and human health impacts.

    1. Good point. Somebody once pointed out that the critical feature for the success of a mobile phone was its battery not the computer hardware and software.

      I liked Mr Nunn’s point about the Northern busway – it was flexible but maybe that was too prominent in the designers minds because they certainly had no concept of providing suitable parking.

      As a newcomer to this blog I assume somebody has an explanation as to why there is no busway from Kumeu to the CBD?

      1. If you read the BOI summary, it was certainly something that was suggested and considered. They just decided no, not worth it. In their infinite wisdom.

      2. How is the parking unsuitable? There is a lot of it, only at the outer stations. That is completely suitable. Now we just need to charge people to use it.

      1. The blog didn’t like my posting links, so try googling “Environmental Impacts of Solar Power union of concerned scientists”. Also look at info DOT cat DOT org DOT uk/questions/pv/what-environmental-impact-photovoltaic-pv-solar-panels/

        Basically, anything electronic is not green to produce. Also often uses nasty chemicals like boron and arsenic when “doping” the silicon.

        1. “Basically, anything electronic is not green to produce”

          Green is not a binary descriptor. try and get things into perspective. I’m sure that the folks at CAT mean well with their website but they are plain wrong with some of their “information” particularly with their descriptions of the manufacturing processes. I state this because I worked in the PV industry in a technical capacity for 23 years in various countries. I can, for example, assure you that production of monocrystalline silicon does not involve silane and that production of thin-film PV does not involve spraying.

          “Also often uses nasty chemicals like boron and arsenic when “doping” the silicon.”
          How often? What do you mean by “nasty”? In a scientific context it is a meaningless word. A quote from Wikipedia on the subject of boron: It is considered an essential nutrient for humans, and boron deficiency is implicated in osteoporosis.

          As well as born the other dopant commonly used in PV cells is phosphorus. also essential for life. Not sure where you get the arsenic from.

          So…I ask again: what is the environmental damage caused by the production of PV cells? A response expressed in quantitative terms would be good.

          1. With regard to doping, that’s how you make semiconductors.Wiki semiconductor doping, wiki arsenic.

            PV, not my field except in passing as an embedded system design engineer. Doping though, basic electronic courses discuss this…

          2. I would really appreciate a post by one or some of you guys sometime. Co-written would be fantastic. I’ve done a fair bit of reading on the subject, but none of it’s stuck because it was full of contradictions.

  2. While enthusiastic about seeing the transport sector thrown on its head, I’m not so sure how quickly it will change.
    I have a 16-year-old car, purchased 10 years ago and will replace it in five years with another second-hand model. This is the same as many other NZers. So there is an inertia that will limit the disruption.
    However, we may see dumping of old vehicle technology as Japan rids itself of earlier generation vehicles. Whether that has any effect remains to be seen.
    I think the place we’ll see the impact first will be driverless trucks and buses, perhaps Uber, but not private cars and not courier/delivery vans- a courier is still needed to unload and take the goods into the building.
    EV is of course great, but there are also a lot of Kiwis who pull boats, caravans, horse floats and dirt bikes at the weekend. They will be very slow to make the switch.

    1. The economic benefit to driver-less trucks is immense. More to do with reduced wear and tear to a half million dollar investment and the 24 hour, 7 day potential utilisation thereof than savings in manpower. Fairly confident it will happen after a few legal bumps. Note it is the heavy vehicles that cause by far the most wear and tear on roads so getting them to take corners at the recommended speed will end up saving the public taxes for road maintenance.
      Once that is in place others will follow – I once had a temporary job where the technician was driving from job to job and he needed someone to field call to his mobile phone – there are many tradesmen who would enjoy a vehicle that drives itself while they slumber / raise invoices / order parts / etc.
      But driver-less vehicles will not be as disruptive as say the change from stagecoach to canals to railways. Once there are sufficient driver-less vehicles on our roads then they will interact and act similar to a flock of birds – this will use roads more efficiently but still not really an example of a disruptive technology. This will happen in other countries first so NZ will have time to learn from others.
      Farther fetched I can imagine modern youth abandoning travel for virtual reality but so long as we have pensioners some sanity will remain and so will slow, badly driven gas guzzlers.

    2. It’s worth checking the fuel economy (in practice) of your current car and perhaps trading it in. Newer cars are generally much more fuel efficient. It may even be enough of a saving that it pays for itself in a surprisingly short time. I saved over $5200 in fuel in the first year by getting a car that was more recent. After trade in, it only took 4 years for the fuel saving to pay for the car.

      1. Unfortunately, fuel economy is not a consideration for my car- it’s a Caldina 2.0 GTT Turbo AWD 😉
        I bus to work, my wife uses this for the school run, but it comes into its own on holiday weekends.

  3. We know from research that rephasing an intersection to smooth the traffic flow will initially lead to shorter travel times but within just a few years those travel times will be the same as what they were. This is due to the traffic induced by the initially shorter travel times.

    So if we keep our current roading layout and traffic light phasing, and insert into the mix EV’s, won’t this have the same effect? Won’t we have a smoothing of the flow by the more efficient EV’s, leading to an initial decongestion, quickly filled by induced traffic? Since it will be incremental, we won’t even notice it. We’ll just have more vkt.

    1. Sorry, I meant autonomous vehicles, not EV. Other ways they will induce more vkt is because the people who like to use their phones while travelling might switch from PT to AV. And of course, as discussed in a previous post, instead of parking their car at work, people with AV’s will get dropped off by the AV, which returns to a cheap park, then get picked up, essentially doubling the vkt. Have I forgotten any other mechanisms?

      These are all excellent reasons for reducing the road capacity and increasing the space given to PT and active modes. But we’ve had excellent reasons for a long time, and NZTA is still increasing our road capacity.

      1. Heidi: you might be right if Auckland had appropriate roads at present let alone for the next million due to arrive shortly. Assuming AV effectively say doubles road capacity [convoys of cars nose to tail traveling fast] they will not have wasted money building three lanes instead of two because it will be more robust and both easier and cheaper to maintain.
        I can see your point but there still needs to be serious improvements to the roads from CBD to Kaipara and to the north.
        Meanwhile I will just keep using my goldcard and paying my taxes for a transport system for the next generations..

        1. See this trotted out a lot: “if Auckland had appropriate roads at present ” and “still needs to be serious improvements to the roads”. To what? sure there’s some unsafe stretches out there which could be designed better, but what exactly are you proposing? wheres the benefit? where do we stop? and, quite frankly, who is going to pay for it?

          1. I would prefer road users to pay. And they ought to pay for my gold card because without it I’ll get back driving again – don’t think anyone wants that.

            I see your point though – you can interpret my post as being more pro-roads than I intended. And I agree with Heidi’s point about rephasing an intersection – just seems so obvious that it didn’t need a comment but I forget that there are a lot of road warriors out there.

        2. While you were growing up, Bob, Auckland didn’t have such a congested road network. New roadways took 20 years to fill up and so people didn’t see or understand the effect the new roads had on land use and city-wide traffic volumes. Roads have taken an enormous share of the transport budget, and we now have more sprawl and a less accessible city as a result. The new time frame for new roads to fill up is more like 5 years. We need to shift our thinking by learning from this. I recommend you read a book like Happy City, which details the different pathways cities can take to deal with the problem of transport and land use. One of the great benefits of this blog for me have been recommendations on books and websites, so if you have the time, I’d love your feedback on that book.

          If you seriously improve the roads from CBD to Kaipara and the north, you will create exurbs and satellite commuter cities, with all the commuters bringing their cars into the city, and reducing the liveability here.

          Northland needs investment and connection, yes. It has consistently been ignored on many issues. For example, it has missed out on agricultural and horticultural research stations, and the research from colder parts of New Zealand are just not applicable there, with its 12 month (weed and pest) growing season.

          But it needs good, efficient rail connections, not roads. Auckland can’t cope with the traffic from more exurbs.

          1. Thanks for your comments. Sometimes an outsider sees thing with more clarity – the lack of a high speed rail service to the only decent deep water port in the North Island baffles me. It would have baffled Queen Victoria too. Having a port in the middle of a large city is odd – especially with the risks of global warming and the increasing congestion both in the harbour and in the city.
            Unlike you I think an exurb is a good idea. Call it a ‘garden city’ and it sounds better. Given a busway and a faster rail link then put one west of Kumeu. It doesn’t have to be a town that empties to the city if it is planned properly – for example move a university out there and maybe a house factory. The idea that Auckland can increase its expected population only by further subdividing, brown field building and apartment blocks is both wrong and expensive and ugly.
            OK I have to admit sometimes the outsider is just plain ignorant.

          2. You’re not an outsider, and you’re not ignorant. I agree with a lot of what you say. We’ve discussed here (in comments, at least) the concept of exurbs that are car-free, with only indirect, costly, slow road connection, but fantastic PT connection. As an example of allowing the market to show how people want to live, it would be a great experiment.

            And yes, when they were considering where to put Massey, they should have considered somewhere up north. I think they discarded Napier – or maybe it was Gisborne. Just think what a nice research posting that would be, instead of windy cold Palmy. (no offence meant, anyone! But sunshine hours and temperature records do tell a story.) Combining surfing with studying… 🙂

          3. Don’t really need a high speed railway, just one that doesn’t

            1. Require expensive low floor wagons to get through tunnels.
            2. Have tracks not in such bad state has 5km/h speed restrictions in sections
            3. Have max 18t axle load limits
            4. No actual connection to the Port.

          4. @ Heidi – RE: Massey — “considering where to put Massey” Was that at the very beginning, or a relocation concept?

            Hawkes Bay had a polytechnic since at least the 70s, until it became EIT in 1992. I also know that the chancellor was trying to get it classified as a uni at about that time too.

            FWIW, EIT is in Taradale on a rather constrained piece of land that is at risk of severe flooding if the stopbank ever gave way (which it almost did during cyclone Bola). At least there’s a bus stop outside the campus.

          5. Right at the beginning. I believe they narrowed it down to about three towns, and then chose Palmerston North.

  4. Given the rate of technological change, we need to deliver transport and land use policy that can adapt quickly over time.

    Given our legislative framework, and democratic expectations for certainty, we can’t deliver adaptable transport and land use policy.

    Height limits, minimum parking requirements, northwest busway, and light rail, for example.

    Discuss.

    1. Add in there maximum parking requirements, and Phil Goff’s letter of expectation to AT that they make a bold commitment to reallocating road space to public and active transport modes. Oh, and what about community owned social housing, and how about the landed gentry wanting to protect their property values? 🙂

  5. Perhaps government should accelerate the E-Bike sharing scheme.

    Also investigate why those E-Bikes are sold at ridiculous price and margin in NZ?

    1. Yes, I think the E bike sharing scheme is great for when you’ve arrived in the city. At the other end of the PT journey, there also needs to be good covered bike parks for your own bike. This means at bus stops as well train stations.

  6. “Building infrastructure that can easily be re-purposed for alternative uses…Not building ‘gold-plated’ infrastructure when there are cheaper, more flexible options”

    Basically, permaculture 101. Some of Holmgren’s 12 permaculture principles are:

    Use Small and Slow Solutions, Creatively Use and Respond to Change, Observe and Interact, Design From Patterns to Details, Use and Value Diversity

    1. Only half joking here, perhaps they’ve been enticed by the often inappropriately deployed (and usually poorly understood outside of IT) IT concept of Agile development – Just like too many corporate managers outside of IT are increasingly doing.

      Agile advocates adaptive planning, evolutionary development and early delivery. However, contrary to our Government it also advocates continuous improvement, and encourages rapid and flexible response to change. Of well, when it comes to roads they’re half-right 😉

  7. “Not building ‘gold-plated’ infrastructure when there are cheaper, more flexible options that could be built at a lower cost”

    Like rail to Huapai for $2m within 6 months vs busway to Huapai for $1b within 20 years?

    1. More like $20 million and 3 years for a limited frequency diesel shuutle service to Huapai. That would pay for a very good bus service from Huapai to Swanson to connect to rail services to Britomart

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