‘Head scratching and riddle solving needed for ZE funding’

A scramble, some head scratching and then some riddle solving were all part of the recent Zero Emission Bus Regional Areas (ZEBRA) fast-track ‘announcement’ in England.

The scramble was kicked off by local authorities (LAs) tweeting that they had been successful in winning funding, followed by some needle-in-a-haystack detective work to find the announcement within the Budget and Spending Review statement.

Then came some head scratching comparing the £355m announced for more zero-emission buses (ZEBs) to the extra £150m promised for ZEBRA standard-track bids in 2021/22. Is that £355m plus £150m, or £355m minus £150m?

Government support ‘falls short’ in some opinions

In fact, the funding equation works out to be £270m for 2021/22 and £205m for a future pot between 2022-25. So, we have almost £71m to five LAs for a total of 335 buses and infrastructure through fast-track. Then we have a further approximately £405m until 2025 to be awarded as part of ZEBRA standard-track and a future scheme. Simple.

Many people have already commented that the additional £355m falls short of the amount of funding needed to get 4,000 ZEBs on the road in England by 2025. Currently, the number sits at around 953 if London is included, or around 300 otherwise. We also have around 360 ZEBs in England that are funded from other sources, such as the All Electric Bus City.

With an average of about £212,000 of funding per bus in the ZEBRA fast-track round, the total pot equates to 2,240 buses. That takes us to around 3,550 buses by 2025 including London, or 2,900 without the capital. So we are not quite there yet, but we must remember that there is the potential impact of other funding pots, as well as the 22p per km BSOG ZEB uplift to come from April 2022. There is also the role that zero-emission repower could play in converting existing diesels to ZEBs.

Can the supply chain deliver what is called for?

The other side of the coin is simple: Can the industry deliver this many ZEBs in the given timeframe? COVID-19 supply chain issues are playing havoc with deliveries, not only for vehicles but also for infrastructure. Perhaps getting to 4,000 ZEBs by 2025 may not be possible regardless of available funding or not.

Some people observe that the average £212,000 per bus funding award seems quite high. But without further details around infrastructure costs, extended warranties and ownership models (such as LAs purchasing buses and then leasing them to operators), it is hard to come to a valid conclusion.

We have heard for some time that battery prices are coming down. However, it is not initially clear if we can see this price reduction coming through in the final ZEBRA awards.

More zero-emission miles operated via incentive?

Zemo Partnership is currently doing some analysis to understand if the amount of incentive being handed out is resulting in greater range and more zero-emission miles. This work will hopefully feed into the thinking for the next round of funding over the coming three years. Potential changes include a cap on funding per bus, a ‘plug-in bus grant’ style of award, and allowing operators to bid directly to speed the process.

What is worth bearing in mind is that with around £1.8m of COVID-19 support, £1.2bn set aside for BSIP delivery and the £475m for new ZEBs, the bus industry in England has never been blessed with so much government money!