eBussed article 22: The number of e-buses surged in Turku in three years

Photo by Michael Dziedzic

Markku Ikonen

Turku University of Applied Sciences

June 2022

The number of e-buses surged in Turku in three years

This project publication reflects the author’s views only and the Interreg Europe programme authorities are not liable for any use that may be made of the information contained therein.

The number of e-buses surged in Turku in three years In Turku, the number of electric buses increased by more than tenfold to over sixty e-buses during the eBussed project. This article discusses what made this possible.

There was a fleet of six e-buses in the city of Turku at the time of the launch of the eBussed project in August 2019. Those buses belonged to a pilot project that commenced in October 2016. However, by summer 2022, the number of electric buses had risen to over sixty. These e-buses in Turku drive 4.6 million km annually, covering one-third of the total bus kilometres in the city.

There is no single reason for the rapid increase in the number of e-buses. Among others, the low electricity price and the nature of the tendering process can be named as factors behind the development experienced. The tendering system favours the use of e-buses, which has made offering them attractive to the public transport operators.

Additionally, the electricity prices in Finland are among the lowest in Europe, whereas diesel prices are among the highest. These prices decrease the operating costs of e-buses significantly compared to conventional diesel buses. So, considering the total cost of ownership, the e-buses are a financially attractive alternative to diesel buses regardless of the higher purchase price.

Moreover, the competition and race of market share among the public transportation operator companies may play a role in the rapid increase of e-buses. Traditionally, public transportation in Turku has been operated by local companies. However, the newest tendering round brought an international operator company to Turku, incorporating a large fleet of e-buses.

Electricity and Diesel prices To cover the extra investment cost of an e-Bus compared to a diesel, a lower energy cost comes to help. In most regions, electricity price is lower than that of diesel fuel.

Of course, quite significant price differences typically exist in different countries, so the extent of the cost-benefit varies between different regions.

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This chapter discusses the cost differences between electricity and diesel fuel, covering all eBussed project regions. The comparison helps to determine, how many years and kilometres of electrical driving are needed to compensate for the higher purchase cost of an e-Bus. The calculations were based on electricity prices published by Eurostat. The prices used were non-household prices during the second half of 2021. A graph of these prices in all EU countries is shown in Figure 1, and the numerical electricity prices of participating eBussed countries are listed in Table 1.

Figure 1. Electricity prices for non-household consumers in the EU in the second half of 2021.

Table 1. Electricity prices in eBussed countries, used in the calculations, in ascending order.

The second half of 2021 (Eurostat 2022).

Country

Electricity price €/kWh

Compared to lowest %

Finland

0.080

100 %

Hungary

0.105

131%

The Netherlands

0.125

156%

Malta

0.135

169%

Germany

0.145

181%

Italy

0.185

231%

It can be seen clearly in Table 1 that electricity price differences between eBussed countries are noteworthy. The highest value is 2.3 times the lowest.

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To find out the actual cost difference, the diesel fuel prices must be available. To reach this information, the website www.fuel-prices.eu was used. Because the diesel prices in the data source are published weekly, a date in the middle of the second half of the year 2021 (Sept 27) was selected. The diesel prices used in the comparison are listed in Table 2.

Table 2. Diesel fuel prices in eBussed countries, used in the calculations, in the same order as in Table 1. Quotation of Sept. 27, 2021 (www.fuel-prices.eu 2022).

Country

Fuel price €/litre

Compared to lowest %

Finland

1.537

127%

Hungary

1.297

107%

The Netherlands

1.509

125%

Malta

1.210

100%

Germany

1.437

119%

Italy

1.523

126%

The differences in diesel prices between countries are significantly smaller than the variation in electricity prices. The fuel prices published in the data source are apparently general consumer prices, meaning in consequence that the prices for bus companies might be somewhat lower. Presumably, the price differences, however, reflect the differences between the prices for bus companies, as well.

The annual estimated electricity cost per bus is shown in Table 3. The presumptions used in calculations were electricity consumption of 1.00 kWh/km and an annual driving distance of 80 000 km.

Table 3. Annual electricity cost per bus in eBussed countries, in the same order as in earlier Tables.

Country

Bus electricity consumption kWh/km

Annual driving distance km

Annual need of electricity kWh/bus

Annual cost of electricity €/bus

Electricity cost compared to lowest €/bus

Finland

1.00

80,000

80,000

6,400

0

Hungary

1.00

80,000

80,000

8,400

2,000

The Netherlands

1.00

80,000

80,000

10,000

3,600

Malta

1.00

80,000

80,000

10,800

4,400

Germany

1.00

80,000

80,000

11,600

5,200

Italy

1.00

80,000

80,000

14,800

8,400

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Table 3 indicates that annual electricity cost varies between EUR 6,400 and EUR 14,800. The lowest cost is in Finland and the highest is in Italy. The difference between these two extreme countries is greater than the total cost in Finland. The second-cheapest country is Hungary and after that, the Netherlands, Malta and Germany.

The annual diesel cost and the cost comparison between electricity and diesel are shown in Table 4. The diesel consumption value used in the calculations was 40 l/100 km.

Photos by Markku Ikonen.

Table 4. Annual diesel fuel cost per bus in eBussed countries, and comparison of e-bus savings, in the same order as in earlier Tables.

Country

Bus dielsel consumption l/100 km

Annual driving distance km

Annual need of diesel l/bus

Annual cost of diesel €/bus

Diesel Annual Savings cost savings comcomon elec- pared to pared to tricity lowest lowest €/year/ €/year/ €/bus bus bus

Finland

40

80,000

32,000

49,200

10,500

42,800

14,900

Hungary

40

80,000

32,000

41,500

2,800

33,100

5,200

The Netherlands

40

80,000

32,000

48,300

9,600

38,300

10,400

Malta

40

80,000

32,000

38,700

0

27,900

0

Germany Italy

40 40

80,000 80,000

32,000 32,000

46,000 48,700

7,300 10,000

34,400 33,900

6,500 6,000

Table 4 shows that the lowest diesel cost is in Malta, at EUR 38,700 per year per bus.

Correspondingly, the highest diesel cost is in Finland, at EUR 49,200, which is EUR 10,500 more than in Malta. The diesel cost is quite high also in Italy at EUR 48,700, which is EUR 10,000 more than in Malta.

Due to the lowest electricity price and highest diesel price, the annual savings are the greatest in Finland, at EUR 42,800 per bus annually. This is EUR 14,900 more savings than in the lowest case, which is Malta having savings of EUR 27,900. The rest four countries have annual savings between EUR 33,100 (Hungary) and EUR 38,300 (Netherlands), which are amounts quite close to each other.

If the purchase price of an e-bus were EUR 200,000 higher than that of a diesel bus, in Finland the payback time would be under 5 years. Contrastingly, in Malta, the corresponding time would be over 7 years according to these considerations.

Other reasons behind the surge – tendering, bidding prices and maintenance costs In Turku, in addition to the city-owned company Turku Urban Traffic Ltd, private local operators and one larger national operator participate in the bidding. In the competitive tendering, extra points are awarded for electric buses. Thus, electric buses are not required, but the points system is designed in such a way that the provision of electric buses will lead to additional points in the competitive tendering.

As a result of this competitive tendering, there is a new international public transportation operator in Turku. The increase in competitive conditions has also affected the proposals presented in the competitive bidding. The first bidding was won by the new operator. The local operators were not successful with their proposals. However, in 6

the next bidding, the other operators checked their calculations and were more successful.

In the competitive tendering, the price and some features of the buses offered are emphasized. The cheapest price, in turn, requires the procurement of the cheapest equipment. This has led to Chinese e-buses becoming more common in Turku as well as in other parts of Finland. The delivery times and availability of the e-buses have of course affected the procurement: in Finland, the commonly used three-axle e-buses have been available to a limited extent from only few manufacturers.

The latest competitive tenderings / cost comparison of electric vs. diesel buses In the case of Turku, the latest competitive tenderings have been more inexpensive to the buyer of the transportation than the previous ones. When considering the reasons behind the more inexpensive offers, the cheaper price of electricity compared to diesel cannot be overlooked, as the previous chapter elaborated.

On the other hand, the acquisition prices of e-buses are significantly higher and in addition to the vehicles, charging devices and the infrastructure they demand is required. The restricted driving range of electric buses causes challenges in the implementation of the operation. For example, the location of the bus depot might play a decisive role. Moreover, the driving range variations due to alternating ambient temperatures must be acknowledged.

When considering all the aforementioned issues, operating electric buses brings out questions that must be studied. The more affordable price of energy alone does not necessarily constitute the reason for lower bidding prices, but for example, the lower maintenance costs of e-buses can be a significant factor. Oil changes are not required in e-buses, which reduces the maintenance costs and brake wear.

The estimation of the actual life cycle costs can be challenging since the aforementioned savings are possible, but there might be other costs that have not been considered sufficiently. For example, when it comes to the durability of batteries and other electrical components, issues that are hard to predict might appear. Some aspects, such as the comfortability of travel, have not been taken into account adequately in the competitive tendering. However, addressing this issue in tendering is problematic.

An increase in competition might be another reason for cheaper biddings. The challenging aspect of participating in the competitive tenderings is the large transportation contracts that require large investments. The smaller operators might not be able to provide the desired equipment, which can reduce competition. The success in the calculation of costs and the implementation of the operation has a significant effect on the profitability of the company. On the other hand, attempts to take over the market can cause unhealthy competition regionally.

Most of the electric buses in Turku are charged with cable chargers in the depots of the operators. The possibility to install chargers for e-buses has also been reserved in Turku city centre, but as of yet, there are no chargers installed. Line number 1, which started the electric bus transportation, is still operating using pantograph chargers found at both terminal stations of the line.

Conclusion Altogether, Turku has moved to a more environmentally friendly public transport through the tendering model and because of energy price differences, thus without an actual prerequisite for environmentally friendly buses. The number of electric buses has increased from six to over sixty during the eBussed project. This number seems to still go up and most of the vehicles offered are electric buses.

Several reasons have affected the surge in the number of e-buses in Turku, without monetary support from the public sector. The cheaper energy cost compared to diesel is the most obvious reason. However, there are also other reasons, such as predicted lower maintenance costs, and the tendering process, which gives extra points to bus companies bidding on electric buses.

www.interregeurope.eu/ebussed eBussed project supports regions in the transition towards low-carbon mobility and more efficient public transport in Europe by promoting the use of e-buses.