At the September 12 school board work session, the administration brought forward a proposal to lease two electric school buses. The presentation left me with a number of questions, so I took to the internet, and did some homework. Here is what I learned:
- There is a compelling future state where electric school buses are a cleaner, quieter, and more economical form of transportation for our students
- Today, electrics buses are more expensive on a one-time basis and on a total cost of ownership basis than clean diesel buses
- Government incentives, currently targeted at disadvantaged districts, can tip the economic scales in favor of electric buses if the subsidies are large enough
The future state vision for electric buses seems compelling. Electric drive trains are more efficient to operate than diesel. This is especially true if the vehicle will operate at lower speeds, with frequent starts and stops, and with significant time spent idling. All three factors describe school bus routes, which have many stops, and which remain stopped for 20-30 seconds while kids board or disembark the vehicle.
In addition, school bus duty cycles are especially well-suited to electric. Bus routes are under the 100-130 mile range of current battery packs. Buses are parked and unused 15-20 hours a day (24 hours per day on weekends and in the summer) and so there is ample opportunity for recharging. And usage is predictable: buses run the same routes, at the same time every day. Compared to a personal vehicle, electric is much better suited for bus utilization patterns.
The costs of electric vehicle battery packs have been on a steady decline, and the efficiency of battery technology continues to improve. There are massive investments being made to scale up battery production, explore new materials, and drive battery efficiency in passenger vehicles. Many analysts predict that the cost per unit of power delivered will continue to drop, and eventually tip the scales in favor of electric powertrains vs. diesel. The optimists see this tipping point being reached in the next 3 to 5 years for buses. (We may already be at that point in passenger cars).
There is also a interesting revenue opportunity that is coming into play. Electric vehicle batteries, if properly equipped and configured, can serve as electric storage for the broader electric grid. By charging bus batteries during off-peak hours, buses could provide energy back into the grid during peak periods (6pm-10pm) and be paid by the electric utility for this vehicle-to-grid “V2G” service. This counter-cyclical charge and discharge function is particularly valuable to grid operators with substantial wind and solar assets to counter the ‘duck curve‘. There are school districts just starting to operate under “V2G” agreements and who get paid for it.
It remains to be seen how these trends and innovations play out, but it is possible to envision a scenario where electric buses are economical, without subsidies, within the next 3-5 years.
Today, however, the economics don’t yet work. Total cost of ownership for electric buses are presently 1.5 – 2.0X the cost of diesel, without subsidies. This difference comes from the 3X cost differential in the purchase price of the bus, offset by 30%-50% lower costs to operate the electric vehicle each year. A new electric bus presently costs around $350,000, vs. $125,000 for a diesel bus. The price difference is largely due to the cost of the Lithium Ion battery pack. For operating costs, there is a 2-3X advantage for electric vs diesel to power the vehicle for each mile. The size of this advantage depends on the local cost of electricity, which varies widely across the country. Maintenance costs for electric are also lower than diesel. For example, there is less wear on the electric vehicle’s brakes due to regenerative braking, and there is no engine or exhaust system to maintain and repair.
Some school districts are already going down the path of electrifying their school bus fleets. Examples include Montgomery County Maryland, Troy Illinois, and my hometown of Concord Massachusetts. These districts usually have secured generous local subsidies from government entities or local utilities, and/or have the support of tax payers to prioritize ‘green’ objectives such as reducing carbon emissions, lowering pollution, and contributing to the build-out of the electric bus infrastructure. Unfortunately for UCF, federal government EPA subsidies are presently targeted to tribal, rural, and low-income school districts. And I am not aware of any funds available through our local electric utility, PECO, under their Path-to-Clean program. (I know we have residents in our community who hold influential roles at PECO/Excelon. Please correct me if I am wrong!)
So what should we do? I see three options:
- Commit and lead by embarking on a fleet conversion, starting with two buses and putting in place the infrastructure and budget capacity to expand. Invest in V2G and other options to maximize our investment. Prioritize achieving our sustainability goals. Accept the additional costs in the short- and medium-term.
- Test and learn by approving the current proposal to lease two electric buses. This is a low-risk way to begin our journey, try out the technology, and get ahead of the curve. This comes at an estimated additional cost of $30k-$50k per bus, over the 12 year lease vs. staying exclusively with our clean diesel buses. There is no commitment to do more, and we evaluate progress annually for each subsequent bus purchase decision.
- Watch and wait until the economics improve. If battery costs decline, V2G becomes more mature, and if local subsidies (or a PECO partnership!) emerge, then we make the move when it becomes our best financial option. Let the economics tell us when to start the conversion to electric.