The Commonwealth is en route to what might well be a game-changing electric school bus (ESB) program. Through creation of a large and long term program (somewhere in the range of 10-15,000 school buses over a decade), Virginia’s ESB acquisition could be the key project to drive down acquisition costs and thus accelerate moves from diesel to electric buses across the country with serious health, educational performance, energy resiliency, environmental, and economic benefit streams.
Key points
- Going electric with school buses is now a ‘no-brainer’ smart move
- There are huge, complex, intertwined ESB value streams
- ESB discussions can be caught up in (sometimes irrelevant) details which make focusing on the huge value streams harder.
- “We’ poorly understand this complexity.
- Virginia (the legislator, school systems, the Governor, Dominion Power) should
- move forward with ESB deployment with
- a structure that enables future ‘course corrections’
- create a path for better defining and understand ESB value streams
- to support improving ESB deployment to support and reward stakeholders in an equitable and effective manner.
- move forward with ESB deployment with
Engaged in ESB discussions
In watching and participating in ESB-project related discussions, there have been many ‘Beware the shiny object’ moments where focus on a specific issue or detail (even if that issue/detail actually merits attention and discussion) hinders an ability to understand what is legitimately a complex ‘multi-solving’ effort with numerous legitimate stakeholders and a myriad of obvious and obscure benefit streams.
A recent Kojo Nnamdi show sparked thinking about Shiny Objects (and the need to fight the Shiny Object Syndrome) as Kojo focused on and one caller waxed enthusiastically about Dominion requiring school systems to accept seat belts on school buses if they wished to participate in Dominion’s program. Let’s be clear, for a second, school seat belts may (or may not) of real value on school buses but they are not central to (or even really relevant) when we ask ourselves “To Electric or Not to Electric?”
Here are three Shiny Object Syndrome (SOS) examples from ESB discussions:
Renewable energy (Solar) powered ESBs
Many (most) of those strongly supporting electric school buses are knowledgeable and seriously concerned about the climate crisis. They wish to see significant moves toward eliminating greenhouse gas emissions with displacing polluting electricity generation and polluting transportation. They, not necessarily illogically, see partnering solar panels on school buildings with ESB as a path for doing both in tandem. While deceptively attractive, this is an SOS as:
- Educational facility solar deployment has a long way to go before it covers fixed facility demand …
- let alone cover the additional power demand that adoption of ESBs will create.
- Powering vehicles off Virginia’s average (somewhat polluting) grid is not as damaging to humans and the environment as burning diesel fuels …
- even though operating with cleaner electrons is better.
- Target should be the combination, writ large of Electrify Everything + Clean Electrons rather than seeking to somehow wall off niche/specific elements.
- Electrifying Virginia’s school transportation is a real step toward ‘electrify everything’.
- Plans for Virginia offshore wind and solar (by Dominion Power and others) power generation will move the grid in the right direction — lower greenhouse gases (GhGs) per megawatt hour in the Virginia grid with every passing year.
Thus, an admonition to such activists: don’t confuse the ESB discussion by trying to link every bus mile traveled (BMT … a variant on VMT: vehicle miles traveled) with solar panel discussion/promotion as, while interconnected in numerous ways, these are two separate battles to fight … and win.
Schools should share in battery usage profits
A key challenge throughout clean economy discussions, for decades, has been The CAPEX Challenge: clean options, often, require higher upfront investment (capital expenses) even while, over the long-term, these clean options often are (far) lower in cost (due to lower operating and maintenance expenses (O&M or OPEX)). For decision-makers, at all levels, it can be a challenge to go with a higher Cost-to-Buy even with clarity of a lower Cost-to-Own (CtB vs CtO). For an early stage opportunity, where economies of scale have yet to kick in to drive down the CtB and there is less widely understood CtO benefits, going ahead with that higher CtB can be even harder. That, in short, is the ESB challenge: despite analysis and expanding experience that there are extensive benefit (straight-forward CtO and co-benefit) streams, it is hard for (essentially always) cash-strapped local governments and school boards to get to the decision to expend (far) more money upfront for an ESB than the existing ‘go-to’ diesel school bus option. Dominion’s stepping up, with its program, to pay 100% of the additional CAPEX costs for ‘going electric’ (not just the bus but also charging infrastructure) while providing cost savings (due to, for example, the lower cost running buses on electricity rather than diesel) for the school systems just made this a much easier decision for (cash-strapped) local governments.
Amid the myriad reasons why ESBs are ‘better’ is the ability to use ESB bus batteries (using V2G (vehicle to grid) chargers) for grid purposes. Amid other things, such batteries offer the ability for creating revenue (profits) with a near continuous opportunity to ‘buy low, sell high’. Think, for example, a parked bus this coming Super Bowl Sunday. The battery could be fully charged early Sunday morning, almost for free, while there are minimal demands on the grid. Those electrons could be sold back into the grid as 100 million Americans turn on their TVs to watch the Super Bowl. And, then, charged again in the middle of the night essentially for free, leaving a fully-charge ESB for getting students to school Monday morning. Would doing this create $1, $5, or even over $10 in ‘profit’ through electricity arbitrage? Maybe. Who knows? But, such buy low/sell high arbitrage opportunities will exist throughout the year.
At least some grassroots and political ESB advocates have, at times, been passionate that “Dominion shouldn’t profit” off being able to buy low/sell high or, at least, that the school systems should share in the profit. Again, an understandable and not necessarily illogical position that risks seeing the leaves and not the forest of ESB cost and benefit streams.
A key point: the arbitrage (and other V2G value streams) opportunity is only one of a wide-range of benefit streams. As a reminder, ESBs are a powerful “multisolving” opportunity. Replacing diesel buses with ESBs will:
- improve educational performance; student and community health; transportation quality and safety; Virginia economic opportunities (through locating ESB manufacturing, maintenance, and R&D in the Commonwealth); ability to integrate renewable energy into the grid; electrical grid resiliency and performance; and more.
- reduce particulate, climate, and noise pollution; transportation, health care, and other costs.
Consider the above (partial) improve/reduce list of benefits from ESB deployment. Electricity arbitrage is only a small part of these overall benefit streams. A key point is that ‘we‘ (Virginians, Virginia government, School Boards, school professional staffs, even Dominion Power) have, at best, a limited understanding of the real value from ESB deployment.
Consider, from a public perspective: What if ESB deployment occurred and the direct school system costs were exactly the same as staying with polluting buses? In this case, student and public health would improve, student performance would go up, buses would perform better, there would be less pollution on the streets, and so on. Sort of, well, WOW already even without any financial benefit. The Dominion program, of course, already goes better because there will be government (taxpayer) financial benefits due to reduced fuel and maintenance (O&M) costs.
A key point is the classic ‘we don’t know what we don’t know’. What are all the benefit streams? What are they ‘worth’? How much do ‘we’ value reduced health risks? Improved student performance? Quieter streets? The ability to power school fair moon bounces with ESB batteries rather than small generators? In terms of Dominion Power, while Dominion likely has a real handle on it, lawmakers don’t have a real understanding of the grid and electricity value streams even as they legislate on something with literally many billions of dollars of import for the decades to come. As they have structured it (and as codified by Senate Bill 988), will Dominion make ‘profits’ or excess profits through an ESB program? While I have my hypothesis, an honest answer has to be: we don’t know what we don’t know.
As to the SOS, my admonition: don’t focus on a demand for shared profits from battery arbitrage when, quite honestly, we don’t know how much value ESB deployment creates. Let’s focus on trying to understand total value streams and leverage that understanding to create an ESB program structure recognizing and, appropriately, rewarding key stakeholders. Focusing on battery-usage (power arbitrage) profits is to allow Shiny Object Syndrome to divert attention from the larger set of issues. ‘We’ need a path to better understand ESB value streams and, with that knowledge, structure ESB programs in an equitable and just manner which, btw, might justmean that Dominion Power keeps 100% of all profits from electricity arbitrage.
Seat Belts
The Dominion-provided ESBs will have seat belts. This has generated enthusiasm from many, supportive of Dominion’s program privately and in public discussions due to its putting safety belts in its buses. In fact, Dominion will not partner with any school system that doesn’t allow seat belts. While there have been long debates about and analysis of the cost and value of seat belts in school buses, a simple point: ‘to seat belt or not to seat belt’ is essentially irrelevant to decision-making and reasoning as to whether or not to replace polluting diesel engines with ESBs. Thus, seat belts are yet another example of SOS in ESB discussions.
Going with ESBs is straightforward, yet extremely complex: don’t confuse the situation further
As upfront costs drop amid growing deployment, ESB deployment is becoming the best path forward even solely on stove-piped transportation cost decision-making. Yet, as discussed above (and elsewhere), the multitude of benefit streams that make this a ‘no-brainer’ path forward are complex, poorly understood, and inadequately assessed for decision-making.
Rather than allowing shiny objects to catch our attention, there is a real requirement to better assess for decision-makers (of all levels) and for the larger community these value streams. And, then leverage that assessment for structuring a better and more aggressive ESB program.
Truth be told, that assessment will not (cannot) occur within the current Virginia legislative session. It would be unproductive (counter-productive) to delay moving forward with ESB deployments until such an assessment occurs. However, it would be the height of irresponsibility to put into law a (perhaps hard to change) program structure that will impact perhaps $5-$10B of public spending and the lives of millions for decades to come with such a limited comprehension of real costs and benefits due to ESB deployment.