Airbus and Siemens aim to make electric planes a reality. Courtesy of Airbus
Airbus and Siemens aim to make electric planes a reality. Courtesy of Airbus

Electric passenger jets could be in service by 2030



The German technology company Siemens and its partner Airbus expect airlines to start using aircraft driven by hybrid electric technology by 2030. This development could then raise questions about the viability of thousands of conventional commercial jets currently in service.

Electric propulsion is expected to become a norm by 2050, although other technologies such as hydrogen-powered aircraft are also being considered, and carriers will be forced to fly new, more cost effective planes to maintain growth, said Johannes Wollenberg, who is part of Siemens' eAircraft team developing hybrid electric propulsion system.

"If they want to grow, they need an alternative to current technology. The only question is doing it with electric or by burning hydrogen,"  he said.

"Otherwise, we will have stagnation. They [the airlines] want to think about future, they want to think about growth and the growth scenario is only possible if you have disruptive technology."

Siemens and Airbus aim to introduce to the market lower- and middle-power class of "regional aircraft" by 2028, carrying about 100 passengers and driven by hybrid electric propulsion systems, with a power range of up to 8 megawatts. That is enough to power about 5,000 American homes, according to Idaho Public Utilities Commission.

Beyond 2035, the partners plan to have a short-range aircraft such as the A320 operating with a power range of 20MW, Mr Wollenberg said.

The development of a successful hybrid electric propulsion system for commercial use would affect the broader global aviation industry. Carriers around the world will have to consider major investment choices in the future when new hybrid systems come into play. Airlines may have to phase out conventional planes, which cannot be viably altered or retro fitted to accommodate new technologies.

International carriers, including the UAE airlines Emirates, Etihad Airways, flydubai and Air Arabia, have aircraft orders worth hundreds of billions of dollars.

"If we talk about commercial aircraft, this will be a new airplane, retro fitting doesn't make sense," Mr Wollenberg said. "Retro-fitting is really a solution for the general aviation [smaller aircraft] but for commercial aircraft it is not really possible."

Fuel accounts for about half of the total cost of operating an aircraft and Mr Wollenberg said that replacing the conventional combustion engine aircraft with hybrid or electric propulsion would be cost effective.

_______________

Read more:

Norway set to plug in electric passenger planes

Aircraft makers look to spark power revolution for flight

_______________

The A320 accounts for around 70 per cent of the global total passenger kilometres flown -  it is the unit of measurement travelled by one passenger by air over a kilometre. "So if we are able to replace the A320 engines with such systems, it's really a huge lever, the biggest lever is in the regional and short-range aircraft," he said.

Air transport currently accounts for 2 per cent of man generated carbon emissions, and aircraft manufacturers are constantly trying to develop more fuel efficient jets to reduce their carbon footprint. Each new generation of plane is on average 20 per cent more fuel efficient than the model it replaces, and over the next decade, airlines will invest $1.3 trillion in new aircraft, according to global industry body International Air Transport Association.

Civil aviation as a whole in 2017 emitted around 859 million tonnes of carbon dioxide. The International Civil Aviation Organisation, a UN agency, in 2016 adopted Corsia, a global carbon offsetting scheme to address CO2 emissions from international aviation. It is expected to help aviation sector offset 2.6 billion tonnes of CO2 between 2021 and 2035. The industry is targeting a 50 per cent reduction in net CO2 emissions by 2050, relative to 2005 levels, according to Iata.

Hybrid aircraft fly on a combination of jet fuel and electric power. At present, battery technology cannot produce a unit light enough or powerful enough to operate an aircraft's electric engines, plus all the other mission-critical systems it requires.

However, with hybrid technology, it is possible to reduce the size of the engine, reduce the fuel burn and enable the aircraft to take off with the combination of jet fuel and electricity. Once the aircraft reaches cruising altitude, the battery will be drained and the aircraft can be flown with a smaller fuel-powered engine.

“This is another level of technology to reduce fuel burn and reduce emission,” Mr Wollenberg said.

Siemens has a "flying testbed" - the German aircraft manufacturer Extra's 330LE aerobatic plane with 1/4MW electric propulsion system, which is a battery-powered aircraft. Together, Airbus and Siemens will produce feasibility studies of various propulsion solutions by 2020. "We have a contract of collaboration, which ends then. There will be a decision on whether Airbus and Siemens work together in the future – may be develop a programme on an aircraft," Mr Wollenberg said.

Electric driving systems are the main domain of Siemens. It is already a big business for the company, and Mr Wollenberg said, the company is fully committed to the development of hybrid electric aircraft propulsion systems.

“Our vision is that by 2050 we will have a real mature technology with which we can replace all [conventional] systems ... in order to reach environmental goals.”

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”