What I am reading here is that the City of Ottawa will buy, and pay for, up to 450 ZEBs (also known as BEBs – Battery Electric Buses) between now and 2027.
Quote:
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The CIB and the City of Ottawa are proud to announce their agreement in principle, which would see the CIB invest up to $400 million, supporting OC Transpo’s adoption of 450 zero-emission buses (ZEBs) by 2027.
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And the CIB will LOAN the City an amount equal to the premium in the cost of ZEBs over the cost of diesel buses; which includes the needed charging facilities.
Quote:
Today the City of Ottawa will release a report, Zero-Emission Buses for OC Transpo, to be considered by the Transit Commission on June 16, 2021, requesting approval from Ottawa City Council to enter into an agreement with the Canada Infrastructure Bank (CIB). As part of the City’s 2022 capital budget, OC Transpo will recommend purchasing 74 40-foot battery-electric buses and the required charging infrastructure, for entry into service in 2023.
The CIB’s loan will cover the higher upfront capital costs of ZEBs compared to diesel buses, helping to accelerate the electrification of the City’s bus fleet. Financial savings are estimated to be substantial, as lifetime operating costs for ZEBs could be as much as 35 per cent lower than diesel buses.
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So, the City will commit, in principle, to buy up to 450 ZEBs; the CIB will LOAN the City money so that those buses can be electric instead of diesel. Since it is a LOAN, the City will have to pay back up to $400M at an interest rate that we haven’t been told, over a period that we haven’t been told.
That LOAN, of up to $400M for 450 ZEBs sounds as if the premium paid for 40’ electric buses is almost $890,000 per bus. The cost of a basic 40’ diesel bus is about $750,000. Therefore, the City will wind up paying $750,000 x 450 (the cost of 450 diesel buses) PLUS have to pay back the, up to, $400,000,000 LOAN PLUS any interest on that LOAN for the cost to upgrade to electric. A total of up to $337,500,000 + $400,000,000 + any interest = $737,500,000 + interest.
I suppose that the “as much as 35 percent” savings is supposed to cover the cost of the price premium, over the 12-year life of the ZEBs. We are not told what the average cost of running a diesel for a year is; so we don’t know if 35% would be enough to more than cover the added cost. What we do know, however, is that the hybrid buses we bought were advertised to offer huge savings over standard diesel buses – but we did not achieve anything like what was predicted. The New Flyer Excelsior CHARGE NG is advertised to save up to $125,000 in maintenance costs over the 12-year life of the bus. Add in the saving for 35,000 litres of diesel that don’t get burned each year, and (at $1.25/l) that could be a further saving of $525,000, over 12 years. Of course, there are additional costs of stocking different parts, training for a different bus model, and the electricity and its associated infrastructure maintenance costs.
For $737,500,000, the City could buy 983 diesel 40’ buses; instead of only getting 450 ZEBs. OC Transpo’s current bus fleet consists of 395 40’ buses, 356 60’ buses, and 151 double-decker buses.