This presentation describes the business case for electric transits buses including low carbon fuel standard, health, maintenance and fuel cost savings.

1. zz
Economics of Transit
Bus Electrification in
British Columbia
Thomas Cheney
December 26th, 2017
Certified Community Energy Manager

2. zz
Key Challenge
 Electric buses have significantly
higher capital costs than diesel or
CNG units
 Goal: Perform a sensitivity analysis
to determine the financial viability
of various Proterra electric bus
models

3. zzz
Electric vs Diesel
Propulsion
Diesel
 High level of technological maturity
 40% efficiency
 High fuel costs and significant pollution
 Fast refuelling and energy dense fuel
 High maintenance costs
 Lower level of technological maturity
 Low fuel cost and zero tailpipe
 Higher initial costs
 Low maintenance costs due to simpler systems
 Weight and relatively slow refuelling of batteries
Battery Electric

4. zzz
Methodology
 Annual fuels costs of Proterra 40-foot models
compered with diesel 40-foot Nova LFS
 Data from BC Transit and Proterra
 Capital costs for electric buses estimated at
$100,000-$400,000 over comparable 40-foot
diesel models
 Cashflow streams
 Fuel savings (Diesel 1.10//litre including taxes)
 Low Carbon Fuel Standard Credits
 Maintenance savings at $20,000 CAD/bus/year
 Health cost savings

5. zzz
Parameters
 48,000 km Annual distance travelled
 53.55 Liters of diesel per 100 Km at
$1.10/L
 LCFS values based on BC government
electricity and diesel life cycle intensity
 Health values based on 2016 Columbia
University values
 Electricity costs at $80 per MWh
 Overnight charging lower rate at
$60/MWh

6. zzz Range of Electric Bus
by Model
79
100
219
311
404
404
563
F C
FC+
X R
X R+
E 2
E 2+
E 2 M AX
RANGE OF ELECTRIC BUSES
Range in Kilometres

7. zzz Annual Cashflow by
Model
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
FC FC+ XR XR+ E2 E2+ E2
MAX
AnnualCostSavings
Proterra Catalyst Model
Annual Cashflow from Electric
Buses
Fuel
LCFS
Maintenance
• Fuel cost savings are the largest value
stream
• Maintenance and LCFS credits also
important cashflow drivers

8. zzz
Excellent Economics
62%
62%
62%
62%
63%
63%
63%
30%
30%
30%
30%
30%
30%
30%
18%
18%
18%
18%
18%
18%
18%
11%
11%
11%
11%
12%
11%
11%
0%
10%
20%
30%
40%
50%
60%
70%
FC FC+ XR XR+ E2 E2+ E2 MAX
AnnualIRR
Model and CAPEX Premium scenario
IRR at Various Cost Premiums
over 12 years
$100,000 CAPEX Premium $200,000 CAPEX Premium
$300,000 CAPEX Premium $400,000 CAPEX Premium

9. zzz Health Benefits
 Clean air benefits increases electric bus
minimum IRR to above 25%
 Health costs per bus up to ~$150,000
US per year
 New York data based on Columbia University Study
 Even at $50,000 CAD per bus, health
costs are the largest single benefit

10. zzz Health Benefits
 Adding reduced air pollution benefits
increases minimum IRR to above 25%
 Even at $50,000 CAD per bus, health
costs are the largest single benefit
113%
56%
37% 27%
163%
81%
54%
40%
263%
131%
88%
66%
0%
50%
100%
150%
200%
250%
300%
$100,000
PREMIUM
$200,000
PREMIUM
$300,000
PREMIUM
$400,000
PREMIUM
AnnualInternalRateofReturn
IRR with Health Benefits
$50,000/yr health costs $100,000/yr health costs $200,000/yr health costs

11. zzz Fuel and Maintenance Cost
Savings
$20,000
$20,000
$20,000
$20,000
$20,000
$20,000
$20,000
$27,005
$26,790
$26,981
$26,766
$27,714
$27,589
$27,464
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
FC FC+ XR XR+ E2 E2+ E2 max
AnnualCostSavings Annual Fuel and Maintenance Cost
Savings
Maintenance Fuel Savings
 Fuel and maintenance annual cost savings
$46,000+ per bus
 Aber 2016 estimates 40% reduction
 NYC Bus fleet average maintenance cost per year
35,000 US, 40% savings is ~17,000 CAD
 Proterra estimates US$20,000 year savings per
bus. CAD $20,000 applied as conservative
estimate.

12. zzz Fuel and Cost Savings
Internal Rate of Return
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
FC FC+ XR XR+ E2 E2+ E2 MAX
InternalRateofReturn
Fuel and Maintenance Savings IRR
$100,000 Premium $200,000 Premum $300,000 Premium $400,000 Premium
Electric buses are usually competitive on a life cycle cost
basis if the cost of capital is less than 10%

13. zzz Fuel and Cost Savings Net
Present Value
At a 10% discount rate, electric buses are competitive
when the cost difference is less than CAD $300,000
($100,000)
($50,000)
$0
$50,000
$100,000
$150,000
$200,000
$250,000
FC FC+ XR XR+ E2 E2+ E2 MAX
NetPresentValue
Fuel and Maintenance Savings NPV
$100,000 Premium $200,000 Premum $300,000 Premium $400,000 Premium

14. zzz Limitations
 Health costs are based on other geographies
 Values based on BC External costs should be pursued
 No capital cost difference between models
which favours models with more range
 Battery costs are ~20% of electric bus cost
 Does not assess operational suitability of
electric buses on particular routes
 Extreme HVAC loads not considered
 Does not specifically include charger cost or
charger loses
 Likely less than 5-10% of electricity

15. zzz Conclusions
 Health benefits are significant value drivers for
electric buses
 From $50,000-$200,000 per bus annually
 Low Carbon Fuel Standard credits deliver
significant value
 Roughly ~$15,000 per bus annually
 Annual fuel and maintenance savings per bus
are $~20,000 and $~30,000, respectively
 Battery lifespan is unlikely to be an issue over
12-year economic life
 Health benefits suggest that electric buses
deliver a return suitable for risk capital at 20%

16. zzz Thank You!
Thomas Cheney
Certified Community Energy Manager
Thomas.Cheney@gmail.com