Executive Summary

Executive Summary

This report describes the results of a life cycle cost analysis conducted using a spread sheet-based Lifecycle Cost Model developed to allow the user to evaluate the differential costs of different transit bus propulsion technologies. The model is set up to allow analysis of bus/technology types that operate on various liquid and gaseous fuels1.

The model includes six input worksheets into which the user is required to enter various fleet data assumptions, and four output worksheets which display the costs calculated by the model for the bus/technology types analyzed.

The user can chose up to eight different bus/technology types at a time for analysis, organized by fuel type. The model allows simultaneous analysis of two different bus types operating on each of two different liquid fuels and two different bus types operating on each of two different gaseous fuels. The five fuel/technology combinations analyzed and presented here are shown in Table 1.

These fuel/technology combinations were chosen to be illustrative of currently available and developing technologies, and to demonstrate the utility of the life cycle cost model used. These fuel/technologies combinations do not represent the only ones that could have been analyzed.

For all fuel and technology combinations the base vehicle is assumed to be a new 40-foot low-floor urban transit bus. The analysis assumes that all bus sub-systems other than the power plant, drive system, and fuel system (e.g. brakes, suspension, air conditioning, customer amenities, etc.) are identical on all of the bus types analyzed.

Elements of total life cycle cost included in the analysis include the following capital and annual operating costs:

CAPITAL COSTS

  • bus purchase
  • purchase/installation of required fueling infrastructure
  • purchase/installation of required depot modifications, special tools, and special infrastructure
  • initial operator, mechanic and manager training;

ANNUAL OPERATING COSTS

  • annual operator labor costs
  • annual bus maintenance costs
  • annual bus fuel costs
  • annual maintenance and operating cost of required fueling infrastructure, depot modifications, special tools, and special infrastructure
  • periodic bus overhaul costs
  • annual refresher training costs.

The "base case" analysis is intended to evaluate current costs for fuel cell buses compared to other technology options, recognizing that fuel cells are still an emerging technology while the other analyzed options are more mature. Many of the cost assumptions used in the base case analysis are based on data reported by the National Renewable Energy Laboratory's (NREL) Advanced Vehicle Testing Activity. Seven NREL reports were reviewed, which covered three small-scale fuel cell bus demonstration deployments, two diesel hybrid-electric bus deployments, and two natural gas bus deployments. Other assumptions are based on data reported in the Federal Transit Administration's National Transit Database, and discussions with vehicle and technology manufacturers and transit maintenance managers.

The base case analysis shows that current total capital costs, first year annual costs, average annual costs, and total life cycle costs are significantly higher for a fleet of 100 Fuel Cell or Fuel Cell Hybrid buses than for a 100-bus fleet of Diesel, CNG, or Diesel Hybrid buses. The net present value of projected total life cycle costs averages approximately $6 million per bus for Fuel Cell and Fuel Cell Hybrid buses compared to $2 million per bus for Diesel, CNG, and Diesel Hybrid buses. Projected average total per-mile costs for Fuel Cell buses are $15.78/mile and for Fuel Cell Hybrid buses are $14.70/mile, compared to $5.58 - $5.90/mile for Diesel, CNG, and Diesel Hybrid buses.

The single largest contributor to the increased life cycle costs for Fuel Cell and Fuel Cell Hybrid buses is the increased capital cost to purchase buses and install necessary infrastructure. However, all cost elements other than operator labor costs are significantly higher for fuel cell buses than for the other bus types, including life time overhaul costs (~3x higher), annual maintenance costs (~2 x higher), and fuel costs (~3x higher for Fuel Cell and ~2x higher for Fuel Cell Hybrid).

If only local costs are included, by removing the portion of capital costs paid with federal funds, average per-mile life cycle costs for Fuel Cell and Fuel Cell Hybrid buses fall to $9.15/mile and $8.10/mile, respectively. These per-mile local costs are still 60-90% higher than local per-mile costs for operation of diesel buses.

Operator costs make up approximately 60% of current total life cycle costs for Diesel, CNG, and Diesel Hybrid buses; the second largest cost element is amortization of capital costs, at approximately 15%. With Fuel Cell buses amortization of capital costs accounts for over 50% of total life cycle costs, pushing operator costs down to only 21% of the total. Though higher in absolute value for Fuel Cell buses than for the other bus types the other cost categories (overhaul costs, maintenance costs, fuel costs, and depot costs) comprise a similar percentage of the total.

If only local costs are included, operator labor accounts for over 68% of total costs for diesel buses, while fuel accounts for over 14% of costs and capital amortization only accounts for a little over 3% of costs. By contrast operator labor only accounts for about 36% of local costs for Fuel Cell Buses while fuel accounts for 25% of local costs and capital amortization accounts for almost 18% of local costs.

The life cycle cost model was also used to conduct a near-term "best case" analysis, which is based on meeting the Federal Transit Administration's National Fuel Cell Bus performance objectives, and the U.S. Department of Energy's 2015 goal for the cost of hydrogen fuel. These goals include a 50% reduction in the purchase price of fuel cell buses, a doubling of fuel cell stack life, a significant improvement in fuel economy, and greater than 50% reduction in the cost of hydrogen fuel compared to the base case. To meet the FTA fuel economy targets it was assumed that any fuel cell bus would have to use a hybrid electric propulsion system.

Under the best case scenario, total per-mile life cycle costs for Fuel Cell Hybrid buses fall by 40% compared to the base case, to $8.88/mile. If only local costs are included best case average per-mile life cycle costs for Fuel Cell Hybrid buses fall to $5.49/mile - $0.58/mile more than local life cycle costs for Diesel buses.

Under the best case scenario the single largest contributor to higher life cycle costs for Fuel Cell Hybrid buses is still capital amortization due to a higher bus purchase price and higher infrastructure costs for hydrogen fueling. Under the best case scenario capital amortization accounts for almost 48% of total life cycle costs for Fuel Cell Hybrid buses, compared to 15% for diesel buses. With all other best case assumptions held constant, a Fuel Cell Hybrid bus would have to cost no more than $350,000 (less than the price of current CNG buses) for total life cycle costs to fall to the level of costs for Diesel buses. In order to match local life cycle costs for Diesel buses a Fuel Cell Hybrid bus could cost no more than $500,000 (approximately the current price of diesel hybrid buses).

Under the best case scenario life cycle fuel costs for Fuel Cell Hybrid buses are significantly lower than for Diesel buses, partially off-setting increased life cycle costs for capital amortization, maintenance, and overhauls. The lower the price of hydrogen fuel, the greater the reduction. However, the life cycle cost model shows that even if hydrogen fuel were free the fuel cost savings from Fuel Cell Hybrid buses would not fully off-set the increases in other cost categories compared to diesel buses.

1 This model is documented in the report Fuel Cell Bus Life Cycle Cost Model, May 2007, prepared by M.J. Bradley & Associates for the Volpe National Transportation Systems Center.