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Three Benefits of Electric School Buses, Plus the Challenges Holding Them Back

William Drier
Oct 25, 2018

EV Fleet

As the push for electrifying the medium and heavy duty vehicle fleet continues, one prominent opportunity is the school bus. By some estimates, the US school bus fleet is made up of over 500,000 vehicles. Roughly 95% of those run on diesel fuel.

There are many benefits of an electrified school bus fleet. These include:

  • Improved air quality (for the kids): About 26 million students ride school buses in the US. In 2002, a study regarding student exposure to school bus diesel emissions was published, noting that students were breathing 5-15 times more particulate matter than non-school bus riding peers. This disproportionally affects children of color and those from lower-income households, who are more likely to ride school buses.
  • Improved environment (for everybody): Adoption of carbon credits signals communities are willing to pay to improve the environment. A wide range of stakeholders want to go carbon neutral: companies, universities, utilities, individuals, and even towns and cities. One method to achieve neutrality is to purchase carbon credits to offset emissions. Until recently, a method to generate carbon credits through transportation electrification didn’t exist outside of California. Last month, the Electric Vehicle Charging Carbon Coalition (EVCCC) changed that by introducing a new methodology that enables EV charging owners/operators to participate in carbon credit markets. Thus, fleets could produce credits and sell them to help offset higher purchase costs of the fleet. EVCCC also announced a vehicle-to-grid (V2G) blueprint, which would enable additional carbon credits to be generated and sold by participating in grid services.
  • More efficient grid: Electric school buses are great candidates for V2G. The predictable schedule of school buses combined with their large battery size makes them ideal for aggregation in grid service markets. Batteries are ideal technical solutions for grid balancing, but costly. Sharing the costs of the battery with the vehicle owner makes them cost competitive, but commercialized V2G solutions are still rare. As more renewables come onto the grid, V2G will be vital to tackling intermittency issues cheaply. Estimates of revenue generated from electric school bus fleet in V2G reach $6,100 per bus annually.
Financial Challenges

The stage is set for a quick electrification transition. However, there are financial challenges.

  • School buses are almost 2 times more expensive than their internal combustion counterparts. It remains to be seen whether current higher price points can be offset by lower fuel and O&M costs to bring the total cost of ownership to parity (or at least close enough where the benefits of higher costs can allow school districts to OK on the higher expense).

    • School districts may have difficulty getting access to large amounts of capital. This makes purchasing new fleets of electric school buses and the required charging infrastructure difficult and incentivizes school districts to maximize lifespan of current diesel fleets.

    New revenue streams from V2G and carbon credits could be the missing links to electric school bus parity with diesel. The technologies and business models that are required to realize the revenue need development. Without outside intervention, it may be some time before the US fleet of yellow school buses goes green.