Electric buses are one answer to a little-discussed problem in public transportation: traditional buses have terrible fuel economy. Caught in stop-and-go traffic, regular old diesel buses average only to 2-3 miles per gallon, leading to high fuel costs and increased rates of asthma and other respiratory illnesses. These problems are particularly acute in low-income communities and communities of color, where a disproportionate number of bus garages are located.
Despite their benefits, the challenges to integrating electric buses in public transportation are significant, ranging from technological unknowns (will bus batteries hold up in cold weather?) to operational hurdles (how will increased charging times affect transit service?).
I wanted to focus today on one piece of the equation: the financial pros and cons of electric buses. A regular transit bus typically costs between $450,000 and $700,000, and purchasing an electric bus adds an additional $300,000 premium. The sticker shock can be alleviated by operational savings over the lifetime of a bus, but exactly how large those operational savings are depends on a host of factors.
This year at TRB, the annual nerdfest for transportation planners and engineers, a panel of speakers delved into the financial side of electric buses. I wanted to highlight five points I took away from the panel, many of which come from Kelly Blynn's excellent research on the topic.
1. The cost savings from electric buses are real
While there's variation depending on the location and how a bus is used, electric buses can already be cheaper than diesel or hybrid buses when the total cost of operation is taken into account. Electricity is often cheaper than diesel, and electric buses have lower maintenance costs than diesel buses, primarily due to the simplicity of electric engines and the benefits of regenerative braking, which puts less wear and tear on brake pads. As a result, the California Air Resources Board estimates that a battery electric bus purchased in California today is already cheaper than a diesel bus, at least in locations where utilities offer bus-friendly tariffs.
2. Utility tariffs are a big deal
In many of the scenarios that Blynn modeled, the financial viability of electric buses depends heavily on how the local utility structures its electricity rates. This is a topic that deserves a post of its own (and Miles Muller over at NRDC already has an excellent post on the subject), but the main takeaway is that transit agencies can often be hit hard by a fee known as demand charges when they plug in their electric buses.
Demand charges are a part of your utility bill that depend not on the total amount of energy you used that month, but the maximum amount of electricity you used during your peak hour of consumption. Demand charges are meant to reflect the fact that there is a difference, from a grid management perspective, between using one lightbulb for ten hours and turning ten lightbulbs on all at once. The latter can require a utility to upgrade the local distribution grid to handle the larger flows of electricity that are needed all at once.
As you might expect, plugging in an electric bus (or a whole fleet of them) can draw a significant amount of power, and the resulting demand charges are extremely expensive for many transit agencies.
However, a recent suite of innovative rate designs shows how utilities can support transit electrification while maintaining grid health. SoCal Edison, one of California's big three utilities, recently introduced a new Commercial Electric Vehicle rate that eliminates demand charges for a five-year phase-in period while the use of electric buses ramps up. After the first five years, SoCal Edison will offer substantially lower charging rates for customers who charge their vehicles during off-peak hours.
Off-peak charging rates can be a significant boon to transit agencies, whose buses are often on the road (and not charging) during the hours of peak electricity use anyways. Building momentum for heavy-vehicle charging rates is a key next step for many states.
3. Climate policies can help defray the cost of running an electric bus fleet
In a deeper dive into three states -- California, Kentucky, and Massachusetts -- Blynn looked at the presence or absence of climate-supportive policies, such as California's Cap and Trade program and the state's Low Carbon Fuel Standard (LCFS). Transit agencies which run vehicles on electricity can receive a share of the revenues from those programs (as much as $9,000 per year for each electric bus), which mitigates the cost of operating an electric fleet.
While carbon pricing policies, such as California's Low Carbon Fuel Standard, can make the math pencil out, one of the major takeaways for me was that the design of electricity tariffs is more important in Blynn's model than the presence or absence of a cap and trade program (at least at the levels they're currently set). It speaks to the importance of designing EV-friendly electricity tariffs if we're going to reverse the growth in emissions from transportation.
4. We need to start rewiring our bus depots
To charge electric buses, bus depots need to be retrofitted with high-capacity chargers, which often requires upgrading the depot's connection to the grid. All told, the bill can exceed $100,000 per charger (and various agencies are purchasing either a charger per bus or one for every two buses, which costs more upfront but allows the agency to charge their buses slowly and more cheaply overnight).
Upgrading bus depots requires coordination between transit agencies and thinking through how bus garages -- which are often already constrained in space -- will handle the new buses. California has taken on one piece of the equation by drawing electric utilities into the game. SB 350, passed in 2015, directs utilities to "increase access to the use of electricity as a transportation fuel." As part of the program, utilities have proposed shouldering a portion of the up-front costs of installing chargers in order to attract new clients and make it easier for heavy-duty vehicles to go electric.
5. There are still some kinks to work out
While the potential of electric buses is great, a number of technological hiccups are still giving transit agencies reason to pause. While some of the agencies piloting electric buses report complete happiness with their new vehicles, others have had to return buses to manufacturers, often because the batteries didn't perform as well as promised or unanticipated maintenance issues cropped up when the vehicles were placed into service.
Ironing out the kinks in electric bus technologies is critical, but this shouldn't cause transit agencies to hit the brake on bus electrification. The number of issues that need to be worked out -- from installing infrastructure to figuring out how to optimally charge buses -- means that agencies need to get moving. Learning by doing is ultimately the only way to ensure that we clean up city air and get on track to meeting our climate goals.
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