LONDON (Reuters) - Rolls-Royce (LON:RR) has signed a deal to conduct a trial conversion of diesel trains to hybrid-electric engines in Britain, in a deal which could be rolled out to hundreds of trains across the country from the 2020s.
The British company, which is best known for making aircraft engines, said on Wednesday that its German Power Systems business had signed an agreement with Porterbrook, the UK's largest owner of passenger rolling stock.
Rolls-Royce's Power Systems unit, which sells engines used on ships, yachts, trains, trucks, mining and nuclear power stations, is one of the fastest growing parts of the company, and its boss said hybrid technology is behind that.
"We expect hybrid technology to grow at above the current growth rates of diesel," the CEO of Rolls-Royce Power Systems, Andreas Schell, told Reuters.
The Power Systems business is expected to post low double-digit revenue growth this year and is a bright spot in a company grappling with the negative headlines and cost of fixing a problem with its Trent 1000 aero-engines.
Diesel trains can be fitted with Rolls-Royce Hybrid PowerPacks to turn them into hybrid trains that can also run on battery power, reducing carbon emissions and making them cheaper to run for operators while also making them much quieter when, for example, they approach stations.
The hybrid initiative comes as Britain seeks to phase out diesel-only trains by 2040. Adding the powerpacks to trains allows railway networks to be partially electrified without the need for expensive overhead infrastructure.
The Institution of Mechanical Engineers says that 42 percent of Britain's rail network is currently electrified, which means that the country lags behind electrification rates in other European nations.
Last year the British government scrapped electrification projects in some parts of the country, saying it would look to hybrid technology trains instead.
Rolls-Royce also said it has signed a test deal with Ireland's Iarnrod Eireann, which could see up to 234 of its powerpacks fitted across the Irish rail network.
"We're going into serious production now. No more R&D projects, no more demonstrators. Serious production," Schell said.
Rolls-Royce and Porterbrook said in a statement that after initial trials on two trains in 2020, Porterbrook aims to offer the hybrid conversion to a range of its rail company customers who operate Turbostar trains, of which it has 182 on lease across the country.