NGV Sales Growth Set to Rebound in UK

NGV Sales Growth Set to Rebound in UK
A recent surge in demand for natural gas-powered commercial vehicles in the U.K. should resume once pandemic-related restrictions ease.

Although COVID-19 has prevented new vehicles from entering the market, a recent surge in demand for natural gas-powered commercial vehicles in the U.K. should resume once pandemic-related restrictions ease.

That is a key conclusion from Gasrec, which operates a commercial natural gas vehicle refueling network throughout the U.K.

Gasrec last week reported a five-fold increase in gas sales across its network for the first quarter 2020, compared to the corresponding period last year. The company attributes the uptick in demand to a recent influx in new compressed natural gas (CNG)- and liquefied natural gas (LNG)-powered commercial vehicles in the U.K. market.

“The growth we have seen has been phenomenal, with volumes more than doubling between the final quarter of 2019 and the first quarter of 2020,” Gasrec Chief Commercial Officer James Westcott remarked in a written statement, adding that new registrations of large commercial trucks has contributed to the surge. “Registrations of gas-powered 44-tonners has played a big role, together with the general realization from the industry that gas represents the best opportunity right now to significantly reduce emissions and running costs.”

To be sure, Gasrec stated that its CNG and LNG sales volumes should flatten temporarily given the broad market interruption from COVID-19. It pointed out that European truck production has largely halted, curbing the opportunity to introduce new gas-powered vehicles to enter the market. However, the company expresses optimism once a more recognizable demand pattern resumes.

“We work closely with customers to ensure we have the refueling infrastructure they need in place before new trucks arrive, so we know the forward order bank is strong,” noted Westcott. “Once production resumes, we fully expect the steep growth trajectory we’re on to return – it’s just been shunted back from one quarter to another.”

Gasrec also stated that it has seen demand spike during COVID-19 within one key market segment. The firm pointed out that three of its major customers are supermarket chains, which recorded heavy trucking fleet utilization in March to keep store shelves and regional distribution centers supplied with goods.

“One supermarket we supply doubled its demand for gas inside a week,” Westcott stated. “But that’s been largely balanced, as in other areas we’ve seen a small volume of customer vehicles – those not carrying essential goods – being temporarily parked up.”

According to Gasrec, LNG has represented about 70 percent of its gas demand so far this year – with CNG accounting for the remainder. LNG tends to be more popular for vehicles requiring maximum range, the firm explained.

As Rigzone reported in early March, natural gas-powered vehicles have become more popular across the English Channel as well.

To contact the author, email mveazey@rigzone.com.



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