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De-risking a fleet transition plan thoughtfully

Author: Rippan Bhattacharjee
white rucks traveling on a highway

At a glance

Canada consumes upwards of 2,282,000 barrels of petroleum daily, producing up to 1.1 billion kgs of CO2 emissions. One of the largest consumers of petroleum is transportation, which accounts for at least a third of the total carbon emissions.

One of the best ways to reduce carbon emissions in transportation is by transitioning to Zero-Emission Vehicles (ZEVs) powered by battery electric or hydrogen fuel-cell technology.

One of the best ways to reduce carbon emissions in transportation is by transitioning to Zero-Emission Vehicles (ZEVs) powered by battery electric or hydrogen fuel-cell technology. The environmental benefits of ZEVs are undisputed. Compared with fossil fuel vehicles, one can avoid more than 200 pounds of air pollutants and 120 tons of CO2 per year per vehicle.

However, conversion to ZEVs is a disruptive, prolonged and risky process and has the potential to affect every aspect of how we live and interact with our cities. The top five risks that we perceive as the biggest challenge to decarbonization are:

Financial risks
Compared to fossil fuel assets, ZEVs can be expensive to purchase but cheaper to operate, presenting a substantial financial and operational roadblock to any organization that wants to convert to a clean fleet. To make the upfront cost of ZEVs palatable, fleet operators require a strong understanding of their expected CAPEX and OPEX expenditure associated with a clean fleet. Presentation of the expenses on a year-by-year basis should identify the peaks and valleys of capital investment. Consequently, the implementation plan should ensure the funding structure c keeps up with the required investments. These analyses would also allow application for Government grants, rebates, and loans, reducing the CAPEX pressure on the fleet. It is natural to be sensitive to these significant capital investments. Hence, each fleet needs a realistic and defendable ZEV roll-out plan to communicate effectively to the key stakeholders.
Infrastructure risks
ZEVs require specialized infrastructure around charging and maintenance, which could necessitate a ground-up retrofit of existing infrastructure. For instance, existing fuel islands would be rendered obsolete, allowing for the re-purpose of the land for new solutions, such as EV charging stations or H2 fueling stations. This presents a challenge around capital expenditure and new standards around design and construction. In addition, fleet operators would have to ensure that any new infrastructure is built within the constraints of the budget and meets the local standards in place. Safety protocols will also need to be updated as both electricity and hydrogen fuels can be hazardous in certain situations.
Technology risks

Many zero-emission technologies are available in the market today, constantly growing and improving. Battery-electric has established itself as the gold standard for light duty vehicles but struggles with long-range and high-power demand vehicles such as freight trucks and transit buses. Hydrogen is an excellent alternative to battery-electric, but the technology is still on its way to full commercial viability. For a fleet, getting this choice wrong can have drastic consequences in the future, both from a financial and operational perspective. The worst-case situation is if, after deployment, a fleet has to backtrack and switch to a different technology because of unforeseen challenges in operations and maintenance of the chosen clean technology.

Operational risks

ZEVs and fossil fuel vehicles have significantly different operational needs. Companies have spent decades optimizing their fleets for diesel, gasoline, or CNG operation. The existing operational framework may not be the most optimal approach for a 100 percent ZEV fleet. A fleet transition warrants a ground-up review of the existing fleet’s service expectations to account for charging/fueling opportunities and mitigate the potential limited range of ZEVs. A holistic look at the current vehicle drive-cycle and duty-cycle would allow operators to appropriately right-size their fleet and service for the ZEVs and ensure that vehicles can complete their day’s work properly. This will also help mitigate any range anxiety a fleet operator might have around ZEVs.

Energy risks

Today, petroleum products are the primary power source for transportation. The supply chain for these products has been established for over 100 years and is reasonably predictable. A transition to clean energy would render this supply chain mute and lead to a new supply chain that moves renewable power, such as electricity or hydrogen, from the source to the customer. The stability of this supply chain will be challenged as more and more vehicles transition to ZEVs and increase the pressure on the supply. It might lead to energy blackouts or brownouts, resulting in unreliable service and severely hampering the fleet’s functionality. Fleets can mitigate this risk by forecasting their energy requirements for a 100 percent ZEV fleet and having direct conversations with their local utility provider. This helps ensure the utility infrastructure is planned and resilient enough to meet the eventual demand. Additionally, fleets can invest in their own energy creation through microgrids using solar panels or other renewable means.

Canadian governments are determined to move away from fossil fuels to more renewable and cleaner energy sources to offset the harmful social, environmental and health effects of a large carbon footprint. It is evidenced by the numerous incentives, benefits and rebates the federal and provincial governments put into place. Technology itself is evolving at a rapid pace and making it easier to own and operate a ZEV. Zero-carbon transportation is inevitable, and every fleet operator across Canada and the world needs to start weighing their options around these five risks. By analyzing their fleets and service and mitigating the risks, fleets can feel confident in their choices as they steward toward a cleaner future.

Meet the author

Rippan has a keen focus on the low-emission fleets that are being adopted by transit agencies across the world. He is passionate about zero-emission technologies in the transportation industry. As an engineer, Rippan strives to create clean, reliable, and actionable data which can be used to confidently make decisions around fleet decarbonization. At GHD, Rippan has led the development of an integrated software solution for optimizing fleet transition scenarios called GHD ZEVO™. ZEVO has been successfully utilized by clients in the US, Canada, and Australia to build robust and resilient fleet transition roadmaps. He has extensive experience working for a major Transit Agency in British Columbia, where he was a Project Manager for the $12M Smart Bus Program. This program was a large-scale change management exercise which aimed to implement cutting-edge transit technologies to improve corporate efficiency, increase ridership and optimize fleet operations.

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