The debate rages on about where the bus industry goes post-diesel. The Gas Bus Alliance argues that there is only one economical option: Biomethane. Here’s why, according to its Technical Director
This article compares the costs of equipping and running a bus depot using a number of alternative technologies: Euro 6 diesel with ‘smart’ auxiliaries; biomethane; battery electric; and hydrogen fuel cell.
Data for single-deckers is used, because there is no figures available for fuel cell-powered double-deckers. The base case uses a depot of 100 buses, each covering 75,000km per year, and we will examine each technology in turn.
It is assumed that the depot already exists and can accommodate each technology. Figures used are all verifiable and taken as far as possible from real-life, published data. Full details can be found at the bottom of the page.
Smart Euro 6?
First we consider Euro 6 diesel with ‘smart’ auxiliaries to give a baseline. Each bus costs £150,000. Annual fuel and Ad-Blue costs, less BSOG rebate, are £14,587 per bus and 56.34 tonnes of CO2 are emitted by each vehicle per year.
The national and global priority is to reduce carbon emissions, and the above cannot be a serious contender for fleet upgrades. However, these figures provide a basis for comparison with the alternatives.
Now we look at re-equipping a 100-bus depot with modern diesel vehicles. There will be no depot infrastructure costs. New buses will cost £15m, and annual operating costs excluding repair and maintenance (R&M) will be £1,456,684. The 15-year operating cost will be £21,880,260 if the cost of diesel remains constant, which is unlikely.
This is the baseline against which alternative technologies will be compared.
Biomethane bonus
Biomethane-fuelled buses’ popularity is growing, but each vehicle comes with a £25,000 purchase premium over a diesel double-decker.
A popular business model for biomethane supply fixes the price for the first three years of a 10-year contract, followed by adjustment according to RPI on the subsequent anniversary dates. This type of contract can include the supply of the fuelling infrastructure at no capital cost to the operator. Figures for fuel use include the allowance for infrastructure supply.
The annual operating expenditure for fuel only (no Ad-Blue is required) less BSOG rebate is £14,436 per bus. A Low Emission Bus (LEB) payment is received to bring that figure down to £10,116. The cost per mile of a biogas bus is thus around one third below a diesel.
A biogas bus delivers an enormous carbon saving of up to 158%, depending on the source of the biomethane. These figures are based on well-to-tank and tank-to-wheel data published by LowCVP and the Department of Energy and Climate Change.
Biomethane gives around a 10p per mile reduction in operating cost to deliver a payback period, without grant funding, of six years. Over the 15-year life of the bus, there will be an increased profit of £40,230.
For a fleet of 100 buses, the capital cost will be £17.5m and annual operating costs excluding R&M will be £1,011,600.
15-year operating costs will be £15,174,000, assuming that the cost of biomethane remains constant – which it will not, but historically it is more stable than diesel.
That is £6,706,260 less than the diesel baseline without grant allowance for shifts in fuel costs – or £447,083 for the fleet of 100 buses per year. Payback for biogas is six years.
Electric dreams
Battery electric buses are promoted as zero-emission vehicles, but what is generally overlooked or brushed aside is the significant carbon footprint associated with the batteries’ manufacture.
The carbon footprint of the grid electricity used to charge the batteries must also be accounted for. 0.5168kg/kW/h is the figure currently quoted by LowCVP.
For our hypothetical fleet of battery electric buses, purchase price is £400,000 per unit, or £40m for the batch. Energy is cheaper than diesel on a like-for-like basis, at 11p per kW/h, and the annual operating cost per bus is £9,000, or £9m for the fleet, less an LEB payment – cheaper than both diesel and biomethane.
Infrastructure costs, electrical connections, chargers and bus connections will run to six or seven figures, but that apart, a 15-year operating cost will be £13.5m. That is attractive, but the saving comes nowhere near covering the additional capital cost of £25m.
Without an ongoing grant support programme, battery electric buses will sustain a loss of £16,619,740 over the life of the fleet. To that must be added the cost of one replacement battery pack per bus – a total of £3,200,000 – making the total loss £198,197 per bus. That is more than the purchase price of a biomethane bus.
To make battery electric buses break even for the operator, grant aid of £198,197 per bus would appear to be necessary. The proposed government grant per bus is about half that.
It is difficult to see why an operator should be expected to take a loss of around £100,000 per bus for a technology with a carbon footprint only 25% better than the diesel bus that it is replacing.
Battery electric buses cost £250,000 more than a modern diesel bus. Even with their low operating costs, it will take 25 years to pay back that additional cost – 10 years longer than the life of the bus.
There is a lifetime saving of around 83,000kg of CO2 using grid electricity compared with a diesel bus after allowing for two sets of batteries per battery electric vehicle.
The carbon footprint of a battery is 200kg per kW/h of storage. Thus a bus with 320kW/h of energy storage has generated 64,000kg of carbon before it leaves the depot. Batteries are claimed to last for 10 years, meaning that there will be at least one battery change during the lifetime of the bus, adding in the region of £32,000 and another 64,000kg of C02 to the totals.
If the government was to insist on the introduction of battery electric buses to a total parc of, for example, 30,000, the break-even grant support required would be £6bn. If we are serious about global warming and air quality, it needs to be dealt with now, and not in the next millennium.
Hydrogen assessed
The final alternative technology is hydrogen. Fuel cells have already received government funding despite cost impracticalities compared with battery electric.
A hydrogen fuel cell-powered bus will cost in the region of £650,000, total cost of £65m. Renewable hydrogen costs £10 per kg, and consumption is 6.06 miles per kg.
That gives an annual fuel cost of £74,250 per bus. Less the LEB payment, net operating expenditure is £69,930.
While there are no tailpipe emissions, there is a CO2 footprint whether the hydrogen is produced by electrolysis or the steam reformation of methane. The latter is the most commonly-used method and its by-product is 11kg of CO2 per kg of hydrogen produced.
As a result, each hydrogen-powered bus is responsible for 81,750kg of CO2 per year. The 15-year operating cost for a depot of 100 of them will be £111,375,000 – almost £89.5m more than the equivalent diesel fleet.
I believe that hydrogen fuel cell buses are astronomically uneconomic. Their greenhouse gas footprint is 45% worse than a diesel’s, unless renewable electricity is used directly to produce hydrogen by electrolysis. Large-scale roll-outs of hydrogen buses must thus be highly unlikely.
The conclusions
The outcome of the depot experiment is very clear. Biomethane is the only alternative to diesel that successfully addresses global warming and local air quality issues in a cost-effective way. It also reduces current operator costs.
Biomethane is the only alternative technology that pays road fund duty (RFD) – in my opinion, a breach of the so-called ‘technology neutral’ policy promoted by DfT and LowCVP.
In other words, if grants were made to bridge the current £25,000 capital cost differential between biogas and diesel, each bus would return £118,560 in RFD over a 15-year lifetime.
The Exchequer would make a 474% ‘profit’ over the life of the bus and PSV contributions to global warming and air quality could be addressed in five to six years at the current annual rate of OLEV grants.
Biomethane grant change?
I believe that it is questionable that the DfT may be considering removing OLEV grant aid from biomethane while pouring millions into uneconomic technologies that will incur long-term losses for operators and not address global warming in a significant way.
Advice given to the DfT is based on estimates of WTW savings that are at variance with those used in this article, but which were derived from those published figures.
Grants proposed for battery electric vehicles (BEVs) are in excess of £100,000 for each bus, and just short of £100,000 for fuel cell buses. BEVs will need a further £100,000 of subsidy to break even over 15 years; hydrogen buses will need a factor of 10 more subsidy.
From the numbers above, biomethane buses are by far the most cost-effective means of reducing greenhouse gas emissions. The latest tests show that there is no N2O present at the tailpipe, and that their NOx figures are around half those of a diesel.
Instead of removing grants for biomethane buses, the DfT should be focused on encouraging their rapid introduction with as many operators as possible.
On the basis of cost-benefit, this should be a no-brainer. The choice for hard-pressed bus operators is clear.