Scenarios and prospects of electrification of public road transport and Total Cost and Revenues of Ownership (TCRO): an innovative benchmark analysis
The integration of low and zero environmental impact buses in local public transport fleets contributes to two interconnected objectives as highlighted by international and European policy guidelines, namely sectoral efficiency and environmental sustainability. The importance of having access to sustainable, safe and affordable transport systems, as well as of reducing negative environmental impacts in cities especially concerning air quality, are indicated as specific priorities by the UN 2030 Agenda for Sustainable Development.
This strategic course of action has become particularly complex in recent years due to a number of factors and requires a new approach to analysis that is capable of including new elements of both costs and potential revenues over the entire useful life of the vehicle. Its complexity is determined by the rapid and pervasive growth of a range of innovations aimed at greater environmental and economic sustainability of buses for local public transport, namely:
· Policy and regulation innovations at different levels (international, national and local);
· Organizational innovations creating synergies between local public transport operators, energy utilities and the financial sector;
· Industry innovations, with the entry of new players in the vehicle supply market.
Enel Foundation and Bocconi University put forward an innovative methodology to provide a systemic view on the costs and revenues components of local public transport fleets across their lifetime, integrating vehicles and infrastructure, operational management and maintenance, and including circular economy related elements such as second life management of batteries and Bus2Grid options as revenues for electrified options.
This strategic approach, defined as TCRO – Total Costs and Revenues of Ownership – provides guidance for an efficient selection of solutions to be deployed in different contexts and time scenarios, allowing through sensitivity analyses a better understanding of potential effects of policy instruments, as well as possible modifications in operational parameters as mileage.
TCRO analysis is accompanied by an assessment of market readiness considering policy and industrial factors, evaluating the potential of national markets to set up local public transport models capable to embrace technological innovations, such as new power supplies for buses, in the short run.
First case study: Italy
The innovative methodology was firstly applied to Italy for several reasons. The integration of low or zero environmental impact buses in local public transport fleets is a key part of the National Strategic Plan for Sustainable Mobility (Piano Strategico Nazionale per la Mobilità Sostenibile, PNMS) of the Ministry of Infrastructures and Transports of 2019, and of the Urban Plans for Sustainable Mobility (Piani Urbani per la Mobilità Sostenibile, PUMS) of many Italian cities such as Milan and Turin. In particular, the National Integrated Plan Energy and Climate (Piano Nazionale Integrato Energia e Clima) provides for an obligation on the part of public administrations to purchase electric or methane-powered buses at an accelerated rate compared with EU directives: by 2022, 30% of purchases for the renewal of bus fleets for urban services must belong to these types of vehicles. The quota rises to 50% by 2025 and 85% by 2030. This objective is further strengthened by the investments envisaged in the National Resilience and Recovery Plan (PNRR) to promote the development in Italy of competitive supply chains in the areas of greatest growth that make it possible to reduce dependence on imported technologies and, indeed, to make them a driver of employment and growth.
For more details on the policy and market context, the innovative proposed methodology and the estimates of TCRO of different type of buses for Italy in 2021, 2025 and 2030, download the full report on the Italian case study here, the position paper summarizing the main findings here and a presentation here.