Bus electrification: moving towards Net Zero amid budget constraints

By Simon Cubitt, Strategic Partnerships Director E-Mobility, VEV

VEV has just announced our work with Tootbus, the sight-seeing bus company that has put sustainability at the heart of its business strategy. The plan that we have developed for Tootbus London is forecast to achieve carbon-emissions savings of ~16K kg CO2 per year – just from the proposed solar development.

We are also developing smart charging and power management strategies to help them maximise the benefits and minimise the costs of their EV transition. This type of approach is essential for helping businesses navigate the complexities and costs of fleet electrification …. but what are the main challenges for bus fleets and how can they be overcome?

Reduced carbon footprint, lower operating costs

Unlike their diesel counterparts, electric buses produce zero tailpipe emissions. Not only does this help bus operators and councils reduce their carbon footprint, it also leads to improved air quality, which is a pressing concern in many urban areas.

To appreciate the cost-savings that can come with EVs, consider the total cost of ownership (TCO) of the vehicles. TCO takes account of the ongoing costs of operating a fleet, such as maintenance, insurance, tax, and fuel. With fewer moving parts than ICE vehicles, EVs require less maintenance, resulting in a significant reduction in costs.

In VEV’s sister company VG Mobility, we have seen electric bus maintenance costs fall by almost 50% vs a diesel bus. The reduction in maintenance also means that EVs can spend more time on the road, reducing vehicle downtime and improving productivity.

Another major TCO saving can be realised through fuel, with an energy cost per mile for an EV around ~60% cheaper than diesel¹. Of course, there are many factors that will influence this such as temperature, topography and driving style as well as the need for an effective power strategy.

Leveraging government grants and subsidies

Despite the clear operating cost benefits, the upfront costs of electric buses are significantly higher than diesel vehicles. A new electric bus will cost around £400,000 compared to diesel at around £150,000. Coupled with the need for charging infrastructure and potential grid upgrades, the electric transition will be a major financial investment for many operators.

There are a range of grants and subsidies available to accelerate the adoption of e-buses and these financial incentives can significantly offset the upfront costs. Many of the electric buses on UK roads today have been supported by these subsidies.

Since March 2021, an estimated 4,200 zero-emission buses have been funded across the UK through the government’s Zero Emission Bus Regional Areas scheme (ZEBRA1). And the results of a second scheme (ZEBRA2) is due in March 2024 with around 600 new electric buses expected to receive funding (according to Zemo).

New partnership models to finance EV bus fleet operations

To reduce the upfront capex burden, organisations can explore partnership models for bus operations. These long-term arrangements can help spread the costs and risks associated with the transition to electric buses.

For example, VG Mobility were engaged by Transmilenio in Bogotá, Colombia to replace part of their aging diesel bus fleet. Transmilenio faced large challenges in terms of capex requirements, power availability and operational risk.

The VGM solution was a 15- year financed agreement for over 400 fully electric 12- and 9-metre buses and high-power charging infrastructure, including the design & build of a new state-of-the-art depot.

Spreading the cost over a long period in this way has allowed Transmilenio to meet their GHG emission reduction goals and realise TCO savings without the heavy up front capex burden. Read the details in the case study.

Another partnership was announced by VGM with Consorcio Express, the largest provider of public transport services in Bogotá. This is a project is to electrify 1,056 buses by 2030 – that’s one every 2 days for the next 6 years!

The importance of smart energy management

Just one electric bus can use as much power annually as 28 typical UK homes², so a large bus fleet may need as much as a small town!

Therefore, power is critical for a successful bus fleet transition, but it’s not just the cost of power that’s important, there are four aspects to consider: Supply, Strategy, Management and Generation.

We take a holistic approach to create a bespoke, end-to-end energy solution for each fleet. We access competitive supply rates, install onsite solar generation and storage assets, and optimise energy usage. Tootbus is a good example of an end-to-end energy solution including solar, smart charging and energy management at their Wandsworth depot.

Use data to drive the economics of your EV transition

With careful planning, innovative financing, and a holistic approach to energy, bus operators and councils can transition in a cost-effective way. The glue that holds all of this together and the key to unlocking the full benefits of going electric is data. Vehicle telematics, operational and power usage data should be analysed and dynamically monitored for an effective transition.

For example, smart charging ensures your buses are charged at the optimum time based on your grid connection, power cost and operational requirements while adhering to battery health requirements.

Our data management platform is the control centre for the assessment of fleet electrification readiness as well as real-time fleet operations management. You can see what it looks like in this short video: VEV-IQ

In summary

Electrifying a bus fleet can deliver upside in operating costs and environmental benefits. But there are hurdles to overcome. ‘000s of electric buses are already on UK roads and this number is set to double within two years.

Many operators have started their journey. Many are yet to start. If you’d like to discuss your plans, please get in touch

Fuel & energy consumption assumptions based on VG Mobility’s projects in Bogota. Assumes a £0.20 kWh energy price and a £1.10 / L diesel price.
Assumes 2700kWh for a typical UK home based on OFGEM figures. Bus consumption estimated at 250kWh per day, 6 days operation, 52 weeks a year https://www.ofgem.gov.uk/information-consumers/energy-advice-households/average-gas-and-electricity-use-explained#:~:text=Individual%20appliances%20can%20vary.%20We%20estimate%20the%20typical,and%2011%2C500%20kWh%20of%20gas%20in%20a%20year