STRATEGIES FOR THE EVALUATION OF ELECTRIFICATION PROJECTS OF PUBLIC TRANSPORTATION BY BUS

ESTRATÉGIAS PARA AVALIAÇÃO DE PROJETOS DE ELETRIFICAÇÃO DO TRANSPORTE PÚBLICO POR ÔNIBUS

Filipe Leonardo Cardoso Souza leonardofcsouza@gmail.com

Inter-American Development Bank, Brasil

André Soares Dantas

Associação Nacional das Empresas de Transportes Urbanos, Brasil

The electro mobility in public transportation by bus necessarily involves the elaboration of detailed projects on the viability of electric buses. This is perceived when considering the immaturity and charging of the lithium-ion battery technology or the high business risk associated with the large volumes of investments to implement the technology. According to Zeeus (2019), it is necessary that project details include financial, economic, environmental and social aspects, plus the adequacy to the current transportation systems of cities and metropolitan regions. Thus, the choice of an adequate and reliable strategy for the evaluation of electrification projects becomes the first step for the application of the electric propulsion system in urban bus systems.

A basic feasibility study for electrification projects could provide to decision makers a security regarding investment and the support necessary for the application and development of electro mobility in cities. Through this strategy, it is possible, for example, to build a more solid electrification process, which will allow reducing technology uncertainties, as well as potentializing the possible benefits of using electric vehicles. It is worth mentioning that electric buses have barriers inherent to all emerging technologies, such as the high cost of implementation and risks associated with the business (Greenpeace, 2016, D’agosto, Gonçalves & Almeida, 2017; Slowik, et al., 2018, Lebeau, Lebeau, Macharis & Mierlo, 2013; Vaz, 2015). Given the importance of public transport for cities, it is relevant that any modification, especially structural, such as the replacement of the propulsion system, should come up in studies that allow us to glimpse not only the long-term economic and financial viability, but also the technical viability, environmental and social aspects of new transport projects.

Without well-defined and clear evaluation strategies as to the scope, breadth or detail required, the design and feasibility of electrification projects may be compromised (Zeeus, 2019; Tcrp, 2018, Slowik et al., 2018, WRI, 2017). In addition, without a pre-assessment step, important risks that need to be considered and mitigated can be omitted from the electrification process. In these cases, these strategies will then support decisions disconnected from the operational or market reality of each region. Thus, the high investment made, which today is estimated around R$3 million/vehicle over 20 years (Byd, 2019), may not bring the expected financial returns, resulting in losses for transport systems (Slowik et al., 2018). These negative effects can be even greater when assessing the malfunction of cities through wrong or inefficient operating decisions in the transport system (e.g. the allocation of electric vehicles on routes that were not designed to electric propulsion in the past).

All stakeholders of the public transport ecosystem (government, operators, customers, industry and civil society) are a part of the process to conduct strategies for design and evaluation of transport systems. They are operators, customers, suppliers, solution providers, civil society, among others, who are impacted and directly influenced by the electrification of public transportation. Each actor in the ecosystem is responsible for the successful implementation of electric buses in transportation systems. The replacement of propulsion technology requires complex and multidisciplinary projects that, in the first instance, need to respond to decision makers on the feasibility and effectiveness of electro mobility in transportation systems. However, in a second moment, it lacks the participation of all actors involved in the offer and availability of services associated with electric buses. This will only be possible with the participation and sharing of risks with all parts of the system.

The main objective of this paper is to establish a strategy for the evaluation of electrification projects for public transport by bus. This strategy is supported by the economic, environmental, social and operational sustainability of electro mobility. It is expected that decision makers elaborate this feasibility study based not only on projects that aim to return the investment, but mainly, to seek the effectiveness and quality of services offered in public transport. It is also the scope of this paper to indicate the preliminary actions necessary to subsidize the elaboration of electrification projects and to map the contribution of different actors of the ecosystem to the success of electric buses in transport systems.

In addition to this introductory section, this document is structured in 4 other sections. In the bibliographic review, it is presented a succinct view on the use and evaluation of electric buses worldwide. The following section presents the steps that make up the work's methodology. Finally, the results presented for the construction of the risk matrix and the final considerations are presented.

Electric buses are present in every discussion about alternatives to traditional internal combustion vehicles. The operation with these vehicles potentially brings cities benefits in different aspects. From an environmental point of view, electric vehicles eliminate the emission of local pollutants, such as Particulate Material, in addition to NOx and CO2 (Cooney, 2011; Falco, 2017; Ercan, Zhao, Tatari & Pazour, 2015; Elgowainy, Han, Poch, Wang, Vyas, Mahalik & Rousseau, 2010; Millo, Rolando, Fuso & Mallamo, 2014; Argone, 2010; Slowik et al., 2019; Zeeus, 2018; Noel & Mccormack, 2014; Eudy, 2016). These vehicles can also contribute to the comfort in customer and workforce of public transportation, since they emit less noise during operation (Greenpeace, 2016; Useche, Gómez & Cendales, 2017). Electric buses are also reducing important cost items associated with diesel technology, such as fuel consumption (around 40%) and vehicle maintenance (eliminating costs for diesel-associated parts) (Slowik et al., 2018; D’agosto et al., 2017). This will directly contribute to the overall reduction of operating costs for transport systems. Many of these results have already been confirmed in practice by several cities around the world. A number of cities in recent years have started, even though through tests, the operation with electric vehicles, which are mostly by battery (Zeeus, 2018). In addition to theoretical studies, practical studies based on field tests and experiences stand out (Wilson, 2014; Grutter, 2015; Tcrp, 2018). These studies usually analyse the performance of a bus, a bus line or, possibly, an already established fleet of buses (Wilson, 2014; Grutter, 2015).

Several countries are adopting, initially on a small scale, battery electric buses to compose part of the urban bus fleets (Tcrp, 2018; Zeeus, 2016, Labmob, 2020). This initiative is the pilot project for the electrification of public transport. At this stage, it is possible to have a closer look at the operational and financial performance of vehicles in the local context. Pilot projects are a strategy to minimize the risks and the impact of the lack of technology maturity (Zeeus, 2016; Zeeus, 2018; Basso, 2011; Ding, 2015). In Europe, in 2016, 21 countries had created pilot projects for battery-powered electric buses, including Germany, the United Kingdom, Switzerland and Poland (Zeeus, 2016). In Latin America, there are 1,229 battery powered electric buses in operation, which include pilot projects or operation in small fleets (Labmob, 2020). Several studies and reports already share the first results from the operation of these pilot projects. However, there are still key questions that need to be answered, and technology parameters that can vary significantly from the results obtained. In the evaluated studies, the performance indicators vary almost 100%, from 0.8 to 1.5 kWh/km (Grutter, 2015; Mattes, 2018; Xylia, Leduc, Patrizio, Kraxner & Silveira, 2017; UITP, 2018; Eudy, 2016; Bi et al, 2016; Wilson, 2014). Cost items vary by more than 100%, going from R$ 750,000 to R$ 1,700.00 per vehicle (Chaves, 2019; D'agosto et al., 2017, BYD, 2019, Eletra, 2019). Even on the useful life of lithium-ion batteries, the results can vary from 2.2 to 15 years (Ercan et al., 2015; Tong et al., 2017; Cavaglia, 2014; Tong, Hendricksonb, Biehlerd, Jaramillo & Sekib, 2015; Flyer, 2016; Zhou, Wu, Zhou, Wang, Ke, Zhang & Hao., 2016; Laizānsa, Graursc, Rubenisa & Utehinc, 2016; Noel & Mccormack, 2014).

Technological or commercial uncertainties about electro mobility contribute to the restraining of the technology development in the context of public transport (Tcrp, 2018). Certainly, mapping the risks associated with electrification projects would allow cities to anticipate mitigating or to manage these uncertainties. The expansion of electric buses, mainly on a large scale, is still a challenge for transport systems (Li, Gorguinpour, Sclar & Castellanos, 2019). In addition to technical and operational challenges, there are trade, political or often institutional barriers. Few transport systems can count on electro mobility incentive policies, as in the case of Paris (France) and Copenhagen (Denmark) (Slowik et al., 2018). Tax incentives are offered for the development of technology, mainly for infrastructure (Tesar et al., 2020). Some American cities have funded about 80% of pilot projects with specific support funds for sustainable development (Tcrp, 2018). It was indicated that without access to “green” funds, experiments with electric buses would not be possible. There are several transport policies for the expansion of electric buses, such as quotas for clean vehicles, direct subsidies from consumers or planning policies. These policies would not only assist in the development of technology, but also would directly contribute to the competitiveness of electro mobility and reduce the business risks associated with electric propulsion.

The proposed methodology for the feasibility study of electrification of public transportation will include the elaboration of a risk matrix for the implementation of electric propulsion projects. Operational, economic, social and environmental aspects will be part of the risk matrix in the context of each city. In the first stage of the feasibility study, advances in technology around the world will be mapped. In the second stage, the characteristics of the region that can be analysed or studied for the implementation of electro mobility will be indicated. This process will culminate in a structured methodology for assessing the compatibility of the technology, whose main objective is to map the risks for the city and for the transport system by implementing the electric propulsion technology. The detailed literature review is required, one which can allow for the establishment of precise instruction for the implantation of electric vehicles in cities. The steps mentioned above are detailed below.

Step 1: Technology frame, which will “map” the development status of electric buses worldwide. In this stage, fundamental parameters and indicators for modelling local public transport will also be established. In recent years, several cities have started to operate electric vehicles. Therefore, new indicators and results will be generated each year. Thus, it will be essential to monitor the continuous evolution of technology in order to better define the risks that will be assumed in the project preparation phase. Art study methods and interviews with local electric bus operators were adopted at this stage. (Tcrp, 2018, Li et al., 2019, Slowik et al., 2018; Wilson, 2014; Grutter, 2015).

Step 2: Requirements of the city features, which will indicate the "status" of some sectors of the city, linked to the electrification process. In this stage, characteristics related to the transport system, the infrastructure of cities, the commercial offer of the industry and technology suppliers in the analyzed regions will be considered. This picture is the stage that will point out what adjustments will be necessary to receive the technology in the local transport systems. These adjustments can be in the political, financial, commercial, technological or other areas. In this stage, the best practices indicated in practical cases of electrification of public transport around the world were used (Zeeus, 2018, Zeeus, 2017, Li et al., 2019, Tcrp, 2018, Slowik et al., 2018, Falco, 2017; Siqueira, Pinheiro & Tavares, 2019).

The risk matrix that will be used in the evaluation process for electrification projects will allow decision makers to understand which and how the technology features of the can be applied in the context of each region. It will be possible, for example, to identify and anticipate risks for the cities using electric buses. Therefore, a study will allow to strategically evaluate the requirements for technology compatibility, as well as in mapping key partnerships for electrification.

The compatibility study will allow cities to deepen their practical knowledge about electric buses. This strategy is essential to reduce the risk of implementing the technology and for planning electrification in the context of each region. Transport systems with similar characteristics should be sought in terms of business model, fleet composition, governance structure, geographical characteristics or even political characteristics. In this process, one can also learn about good practices and successful experiences, such as learning about experiences that did not generate good results. All of this information will be fundamental in the elaboration of electrification projects for public transportation in cities.

4.3. Risk matrix

In cases where the city does not offer any of the requirements for the operation of electric buses, it can be understood that there is a risk for electrifying the public transportation. However, these risks can be mapped, mitigated or managed. Risks may be associated with the different stages of the project and with different impacts for the city (TCRP, 2018). Thus, there are priority risks that will lead to more efforts in management and attention in the preparation of projects. These are mainly the risks associated with the operational and financial viability of the projects (Lebeau et al., 2013; Vaz, 2015). The identification of risks in the electrification process does not necessarily imply that the project is not viable, but it does bring a warning signal that should be considered in the decision-making process. The mapping of these risks is the result of the analysis and relationship between the portraits of technology and the characteristics of cities.

Based on these analyses, a structured assessment (risk matrix) was developed with the objective of subsidizing the risk mapping and management process for each city. Risks were mapped in all stages of the project, which includes everything from the pre-planning stage to the day-to-day operation. In the pre-planning stage, risks associated with the necessary requirements for decision-making and on the maturity of electro mobility were identified. In the strategic planning stage, risks associated with financing requirements, regulation and basic planning of electric buses were mapped. These risks were mapped both analyse the technology and the city’s characteristics. In the stage of specifying the electric bus, commercial and technical risks were indicated for the elaboration of the projects. These are risks associated with the technical specification requirements of the vehicles, fleet and infrastructure acquisition and long-term development of the projects. Finally, in the operation stage, vehicle maintenance and operation risks were mapped. These are mainly from the mapping of city features and the practical studies raised in the compatibility study. Figure 1 presents an illustration of the first level of the risk matrix.

Still in Figure 1, there are actions for detailing the risks in each of the phases of the electrification projects. These actions are studies, reports, research or surveys that seek to better understand the identified risks. These actions can be restricted to those that assess only the projects' sustainability bias (economic, social and environmental feasibility analyses). It is possible to add actions that determine greater depth in risk studies and that will incorporate aspects of operation, commerce, technology, among others, in the evaluation process. Also in the risk matrix, the results of the studies in the previous process will be evaluated. The risks will be confirmed (or discarded) and quantified, which will allow the development of more assertive and efficient risk management plans. In addition to allowing a detailed assessment of the risks of electrification, it will potentially be possible to identify who are responsible for the risks. This may also assist in the drafting of contracts or key partnerships for the development of electro mobility in local public transport.

Figure 1
Risk matrix for evaluating electrification projects for public transport by bus

Through the risk matrix, electrification projects can be recommended for approval even if they are not fully compatible in the feasibility analysis. However, in these cases, it is necessary to establish both in the feasibility report and in the preparation of the projects, the recommendations and risk mitigation mechanisms for the electric propulsion technology identified. That is, the initial incompatibility of the technology, either with the transport system or with the city, can be overcome. In some cases, the risks will not even influence the local reality. In other cases, these risks may compromise the viability of the projects. The effects will vary from city to city. If it is impossible to mitigate the risks identified in the compatibility study, the project must be rejected and the decision makers recommended the study of alternative measures to the internal combustion system. The presence of risks that cannot be circumvented or that reinforce the incompatibility of electro mobility can harm transport systems and lead to the gradual degradation of systems over the years.

The strategy of evaluating electrification projects for public transport by bus proposed in this paper sought in experiences and reports around the world the best practices and methodologies applied in the different areas of operation of electric vehicle technology. Thus, it was possible to establish a strategy that allows evaluating the compatibility of electric buses according to the specificities of each city. The steps that compose this strategy include the different phases for project design: basic project, financial project, executive project and operational project. This added to the strategy presented in this work a global and detailed view on the applicability of the technology, which provides better understanding and security to the decision makers regarding the impacts and requirements necessary to make the electro mobility of public transport viable.

The projects conceived by the strategy presented here, probably, will have lesser risks associated with electric propulsion technology. This is possible since the global analysis carried out allows the detailing and anticipation of risks and, consequently, the proposition of mitigation measures so that the effects are managed and does not result in losses to the project. Then, uncertainties about the success of the implemented projects are reduced. In addition, the management of these risks is added to the experience and participation of other actors in the ecosystem who did not previously participate in the decision-making process. However, in the proposed methodology, they will be directly associated with the services offered and, therefore, considered of extreme relevance in the project discussion phase and feasibility study.

The engagement and availability of the main players in the transport ecosystem is also part of the strategy for electrifying public transportation. It is necessary to disscuss and listen to the different actors who live in the transport ecosystem. The changes resulting from electrification are not restricted to the operation (operator-public authority), but also affect the entire service chain that formerly operated, mostly, with internal combustion vehicles. It is necessary to bring them, listen to them and contribute to a more robust electrification strategy, which incorporates not only financial or environmental viability, but also the entire service chain.

Some proposals for the future development of electric bus projects and electrification of public transport were identified across this paper. They are mainly of public policy, planning and understanding of the characteristics of technology in order to adapt reality to the specificities of electric propulsion, as in the case of infrastructure and financing, for example. Below are some referrals from this work:

• Detailed studies of the electrical technology life cycle are necessary, considering the characteristics of the region, mainly regarding the necessary inputs and electricity generation. This requirement may compromise the justification for replacing diesel with electric propulsion technology (the battery);

• Detailed long-term financial assessment of the necessary investments and the impact on the current costing model for local public transportation (survey of financial requirements for viability);

• Study of contract models that allow the incorporation of electric buses in transport systems, including establishing critical parameters to be ensured for business viability;

• Include in the electric bus projects the financing model associated with the technology, which must include not only the initial capital cost, but also the costs of the technical fare. Thus, the projects will minimize the risks to the user's accessibility to the service provided;

• There is a need for incentive policies for industry and suppliers of electric propulsion technology. This will reduce dependence on local systems from foreign suppliers and guarantee a market that will favour project maintenance strategies;

• The reuse or disposal of batteries should be incorporated into the electric bus project as a fundamental point in the environmental planning of the technology;

• Creation of a repository of information about the experiences and operation of electric vehicles in each region. This will assist in a better understanding of technology in the local scenario and will assist in more assertive project decisions, thus reducing business risk.