If the entire school district’s fleet switched to V2G-capable electric buses, the net present savings would be upwards of $38 million. A sensitivity analysis was conducted to determine how the factors influenced the costs and benefits. In all cases, purchasing an electric school bus is consistently a net present benefit.

Despite the advantages electric vehicles provide, electric vehicles face several limitations that prevent them from widespread implementation. Barriers include battery cost, vehicle range, and availability of charging stations. … Also, batteries require several hours to fully charge and have driving ranges that are typically less than a petroleum vehicle’s range. This requires electric vehicle drivers to adjust driving habits and refueling behavior. Furthermore, charging stations are less abundant than gas stations, requiring drivers to plan their routes ahead of time.

The aforementioned limitations for electric vehicles are relevant particularly for private vehicle owners; however, this study analyzes the cost effectiveness of a V2G-capable, electric public fleet vehicle, as it is anticipated that public fleet vehicles will face less of these challenges. Compared to privately owned vehicles, public fleet vehicles may more successfully support V2G applications given they have predictable routes of limited range and are not in use for driving purposes for extended periods of time. After public fleet vehicles conduct their typical routes, they can be plugged in for the entirety of the time they are not in use, enabling them to collect revenues for V2G services for several hours per day. Though this analysis focuses on school buses, the analysis can be applied to other large public fleets such as city buses, garbage and recycling trucks, mail trucks, and other commercial fleets that fit within the same major assumptions of this paper.

Of all public fleet vehicles, school buses are of particular interest because they cause disproportionate health effects, especially on school children’s health. Health concerns arise because diesel buses release particulate matter and other harmful pollutants, and these emissions can be disproportionately higher within the cabin of the bus compared to ambient pollution levels. In fact, it is estimated that up to 0.3% of in-cabin air comes from a bus’s own exhaust. School buses, for example, have a significant impact on local aerosol levels that could directly influence the health of children. Such concern has been the impetus for several policies requiring the reduction of school bus exhaust pollution. For this reason, the cost-effectiveness of an electric school bus is analyzed because it avoids such health impacts.

—Noel and McCormack

For the study, the researchers used the Smith Newton eTrans electric school bus. The eTrans costs $230,000 and can carry 24 adults plus two wheelchair accessible locations. The eTrans can be equipped with a battery pack ranging from 40 kWh to 120 kWh; for the study, the eTrans was outfitted with an 80 kWh battery that has a range of 100 miles.

They used an on-board charger in the analysis—the EPiC 150 Automotive inverter, which can charge the battery at 70 kW continuously and discharge at a maximum of 140 kW for a minute, only requiring 208 V three phase plug. The hypothetical cost of installing the EPiC 150 is approximately $30,000, assuming it was included in the design and construction stage of the bus. Thus, the overall cost of the eTrans in the analysis includes both the actual cost of the bus and the charger, totaling $260,000.

They compared the eTrans to a traditional diesel Type C school bus of comparable size and seating capacity: 32 adults plus two wheelchair accessible locations. The typical cost of such a bus is $110,000, and the average fuel economy is approximately 6.35 mpg, including the effects of idling on efficiency.

Driving behavior was estimated based on data collected by the Red Clay School District in Delaware.

A V2G eTrans would participate in and gain revenues from the regulation market. Due to a Federal Energy Regulatory Commission (FERC) order, batteries are paid more than the average regulation market participant because they are a more efficient frequency regulatory market participant. Batteries are more efficient because they can respond to a market change in a matter of seconds.

With the implementation of the FERC order, the effective overall market clearing price for regulation services has risen to approximately $28/MWh—the value used for the analysis.

Noel and McCormack conducted the cost benefit analysis by summing the costs and benefits of each of the respective buses over the 14-year bus lifespan. Then, each sum was converted into the net present value, using a discount rate of 3%.

Because the buses have different—albeit similar—seating capacities, the duo converted the number into a net present value per seat.

Annual V2G revenues were estimated by calculating the price of regulation per hour and the total hours performing V2G per the capacity of the charger. The researchers concluded that annual V2G revenues could be approximately $15,000.

In addition to the benefit of the V2G revenues, the annual fuel, maintenance, and externality costs of the electric bus all represented significant savings.

The pair also conducted a sensitivity analysis to determine how certain variables influenced the costs and benefits, including:

• Regulation price. This is the price that the bus owner would receive for its regulation services. Regulation price has a very large effect on the net present benefit per seat of an electric bus, ranging from as little as $1,700 to as much as $15,500 per seat. For an eTrans and a diesel bus to be equally cost-effective, the price of regulation would have to be as low as $6.95/MWh—nearly a quarter of the current average price. Thus, they concluded, while the regulation price has a substantial effect on the net present value of the bus, it is not influential enough to reasonably cause an electric bus to be less cost-effective than a diesel bus.

• Regulation capacity. Regulation capacity is more influential on the cost-benefit analysis. For the sensitivity analysis, Noel and McCormack used a range of 3–105 kW to give a fuller picture of the impact of regulation capacity. Increasing regulation capacity increases V2G revenues, which also increases the net present value of the bus.

  The minimum regulation capacity of 3 kW, assuming that the cost of the charger varies with capacity, decreases the net present benefit of the electric bus to $178—small, but still a net present benefit.

• Battery replacement cost. Using a range from a low of $100 per kWh to a high of $650 per kWh, the net present benefit per seat of the eTrans ranges from $6,600 to $5,200, respectively.

  Many may have expected the price of batteries to be a barrier to the widespread adoption of electric vehicles, but the cost of replacing the battery in nine years makes little difference in the cost effectiveness of the electric bus. This means that while much of the research and money is invested into the decreasing the cost of batteries, the analysis implies that it would be more effective if resources were invested into something else, like increasing the capacity of the charger.

  —Noel and McCormack

• Social cost of carbon and level of renewable energy. These two variables had a negligible effect on the analysis.

Though vehicles that drive limited miles per year may not contribute as much to climate change on a per person-mile basis as other forms of transportation, such as an individually owned private vehicle, this analysis shows that significant contributors to climate change such as buses and other fleet vehicles can be readily replaced by electrified options. Limited range fleet vehicles face fewer obstacles to adoption than individually owned private vehicles, such as range anxiety and lack of charging infrastructure, making fleet operators key potential first adopters of electric vehicles. Inclusion of V2G could incentivize fleet operators to utilize electric vehicles and could be a stepping stone to an eventual wide-spread adoption of electric vehicles by individual owners. Similarly, the growth of V2G capacity through increased adoption of V2G-capable electric vehicles would encourage and potentially validate high penetration of intermittent renewable energy sources such as wind and solar energy. In conclusion, a V2G-capable electric school bus could save a school district thousands of dollars per seat over the lifespan of the bus, while avoiding health and environmental externalities, and encouraging the further adoption of electric vehicles and the growth of renewable energy.

—Noel and McCormack

Resources

• Lance Noel, Regina McCormack (2014) “A cost benefit analysis of a V2G-capable electric school bus compared to a traditional diesel school bus,” Applied Energy, Volume 126, Pages 246-255 doi: 10.1016/j.apenergy.2014.04.009