Zero-interest finance for Siemens hybrid retrofits was the headline grabber at a seminar designed to inform operators about their choices
The latest developments in energy efficient bus technology, and the finance scheme available to accelerate its implementation, were key aspects of a seminar at Siemens’ London docklands event venue, The Crystal, appropriately a ‘green building’ that is the most sustainable in London.
After a welcome by Mike Houghton, Managing Director – Process Industries and Drives at Siemens, delegates enjoyed a number of presentations, as well as Q&A sessions.
A ‘perfect storm’
Leon Daniels, Transport for London (TfL) MD Surface Transport, spoke about the ‘perfect storm’ the capital’s transport is facing. London’s growing population is expected to reach 10m million by 2030, putting additional pressure on the networks and meaning that demand for low-emission solutions will intensify.
London operates the cleanest buses in Europe and the city will comply with the requirements of the Ultra-Low Emission Zone (ULEZ) in central London by 2019. The rest of London will be addressed by 2020.
This will be achieved through a major retrofit campaign to bring Euro 4 and 5 vehicles up to Euro 6 standards on NOx and PM, through a mixture of conversions to exhaust after-treatment and replacing diesel engines with diesel hybrid mid-life conversions, as well as new buses.
Nevertheless, as Elliot Treharne, Air Quality Manager, Greater London Authority explained, there is still a lot of work to do to improve the city’s air quality and Mayor Sadiq Khan has made it a top priority.
On Brixton Road, for example, more than 20 hourly readings showing concentrations of toxic nitrogen dioxide (NO2) that exceeded 200 micrograms per cubic metre were recorded within the first week of 2017. Under European law, people should not be exposed to such high levels more than 18 times in a year.
Innovative technology
New energy-efficient technology for buses will make an important contribution to meeting air quality targets.
Thomas Wuerch, Sales Manager – Electric Commercial Vehicles (ECV), Siemens Process Industries and Drives, introduced Siemens’ modular Hybrid and Electric Traction System (ELFA) which allows vehicle manufacturers to individually configure hybrid drives to run buses with reduced energy, favourable costs and low emissions.
The system can be adapted for buses of any size and enables vehicle manufacturers to fulfil all of their power-mix requirements, whether it’s an ultra-capacitor (U-cap) hybrid or a pure fuel cell solution.
The modular nature of the system means it can be adapted no matter what the composition of the bus fleet. Additionally, the system is suitable for diesel retrofits, meaning operators can take steps towards becoming more environmentally-friendly straightaway.
Already used around the world, the system offers high-energy efficiency and low maintenance. Perhaps most importantly, all components are designed to last the lifetime of the bus (around 15 years) which means that total cost of ownership (TCO) is “extremely compelling” compared to diesel buses and other hybrid solutions.
The flexibility of the model means that operators can develop a roadmap of how their fleet can be adapted over time to gradually work towards cleaner technologies.
Jeremy Wilkinson, Business Manager ECV at Siemens Process Industries and Drives UK, and Julian Hobbs, Sales Director at Siemens Financial Services, compared the Series Hybrid solution with the Parallel Hybrid solution.
It was explained that the Series Hybrid Solution with U-cap presents the best solution for bus operators because the U-cap outperforms the battery and lasts the lifetime of the bus (15 years).
Additionally, the Series Hybrid is future-proof and provides the greatest efficiencies. When looking at retrofit options, the Parallel Hybrid is more expensive to retrofit to ensure the lifetime of the bus. All of these factors mean that the TCO for a Series Hybrid is more attractive.
Siemens has calculated that in London, over the lifetime of a bus, the Siemens Hybrid solution could bring significant savings compared with other hybrid systems and even higher savings when compared with a standard diesel bus.
Similarly outside London, where buses have slightly different specifications, operators can achieve “considerable savings” with the Siemens Hybrid solution, compared with a diesel bus or other hybrids.
It argues that although the initial purchase price is higher, the operational savings close the gap.
Julian Hobbs explained that retrofit options are available to facilitate a simple and cost-effective transition away from diesel. As finance for retrofits of Siemens’ hybrid can be offered without interest, there’s no reason for operators to delay retrofitting their fleets.
Innovative finance
Maria Jose Perea Marquez, Global Account Director, Siemens Financial Services explained the innovative and tailored finance of the Siemens ELFA System offered by Siemens Financial Services (SFS).
The model looks at the TCO of a fleet, rather than the cost an individual vehicle. By analysing fleets on the basis of cost-per-km, options can be directly compared and incorporate the full range of costs including capital expenditure, operating expenditure and any financing cost.
These bespoke, consultative models are built around the capital needs of the customer, designed to be long-term and offer the flexibility to accommodate future changes to technology.
This approach reflects the growing trend towards modelling finance around outputs and performance.
For operators, being able to pay for business outcomes transforms the reliability of financial planning. Not only are costs more transparent but the risk of technology obsolescence is mitigated. In this way, finance can be used to directly increase performance and efficiency, reduce costs, optimise equipment and lead to top-line growth.
This sort of approach is only available from a financier with direct expertise in the field. Generalist financiers and banks are unlikely to understand the application of the technology and the benefits it can bring.
Instead, working with an established company that not only has a long history in the sector, but is also part of the same company that developed the technology, has obvious benefits, says Siemens.
The event showed that by taking a fresh approach to investment – integrating finance and cutting-edge technology – a more intelligent solution can be reached.
Instead of viewing costs of vehicles in isolation, operators can work with financiers that analyse the whole fleet, building a collaborative, consultative approach.
