Why regional leader Chile’s electric bus embrace will likely tighten
Luis Gutiérrez is director of the Civil Engineering in Energy career and academic of the Faculty of Engineering and Sciences of the Adolfo Ibáñez University, associate researcher for the Center for Energy Transition (CEnTra-UAI) and for the Solar Energy Research Center (SERC-Chile). Luis holds a PhD in Electrical Engineering, Power Systems, from the University of Manchester, United Kingdom.
- In 2023 Chile will have around 1,900 electric buses. What has been Chile’s formula, that is, what are the central beams of the country’s strategy in the area of electromobility?
In Chile, more than a third of energy consumption corresponds to the transport sector, which is almost entirely based on fossil fuels, which means that this sector is responsible for a quarter of total CO2 emissions in the country.
With a clear diagnosis, Chile launched its National Electromobility Strategy in 2017 where the electrification of public transport (mainly buses) was key. This strategy was updated in 2021 with more ambitious goals, such as all new additions to urban public transport to be zero emissions by 2035, as well as sales of light vehicles. To reach the goal, the strategy proposes to work on different axes, such as financing and incentives for the acquisition of this type of vehicle, growing in charging infrastructure (electroterminals in the case of buses), development of human capital and knowledge transfer, among others.
Specifically, one of the factors that has driven the growth of the electric bus fleet so far is a minimum requirement of a percentage of this type of buses in tenders to urban transport companies and recognition of companies that propose a high percentage. For example, in the last tender initiated at the end of 2020 and awarded at the beginning of 2022, the operating contracts could be between 5 and 7 years depending on the percentage of electric buses in the fleet, and extendable between 5 and 7 more years. Proposals with more than 50% electric buses could achieve 7 years. The result was the entry of 1637 new buses of which 991 are electric (60%). With this, Santiago has 1770 electric buses, consolidatingitself as the city with the largest fleet of this type in Latin America and the most important in the world, reaching more than a quarter of the total urban buses in the metropolitan region.
It is also important to highlight the existence of public-private agreements. In the Chilean case, electric buses began just over four years ago thanks to an agreement between the Ministry of Transport, bus operator Metbus, Chinese bus manufacturer BYD and Enel X, who managed the entire project.
- What are the prospects for the years ahead? For example, are we going to see tenders that are increasingly strict regarding the share of electric vehicles?
As I mentioned recently, quotas of 50% of electric buses are already being promoted in the tenders and it would be expected that this quota will go up. In any case, for vehicles that travel many kilometers a year (such as urban buses that can travel an average of 90,000 km a year in Santiago), the electric alternative may already be more convenient in a horizon of a few years and also considering how the price of diesel has risen. Although the investment cost is up to 50% higher compared to an equivalent diesel bus (320 million pesos for electric), the costs in the operation are much lower (approximately 70% lower). Indeed, there are savings in primary energy, where the kilometer traveled with electricity costs less than a quarter of the value when doing it with diesel (about 70 and 300+ pesos, respectively), there is a lower maintenance cost due to the fewer moving parts, the one that does not use oil, and the one that use regenerative braking which also saves on brakes , in short, electric buses can have a lower Total Cost of Ownership. Evenwithout the need to require higher quotas for electric buses in future tenders, this is expected to be the natural choice based on its greater convenience.
- What are the challenges for electromobility? (costs, infrastructure, etc?)
For public transport, and for intensive use vehicles, the electric alternative is already more convenient in many cases, comparing the total cost of investment plus operation and maintenance (Total Cost of Ownership). For light vehicles on the other hand, the high investment cost (often double their combustion-equivalent model) cannot be offset by the lower costs of their use, so in countries where they have been adopted more strongly it is usually due to support from governments that aim to lower acquisition costs. In Chile, the recently approved law on storage and electromobility exempts from payment of circulation permit for 2 years and reducesits cost until the eighth year. Its effect on the purchase of these vehicles remains to be seen.
Another important challenge is to have the necessary infrastructure, and that refers not only to charging points in places accessible by the public, but also to the adaptations that may require the electrical distribution networks, which were not designed for this level of demand. There is also a need to standardise the types of connectors for vehicles and charging points, and for interoperability and secure IT systems for making payments.
Finally, for electromobility to achieve decontamination, the energy source must be renewable, which implies another set of challenges in the operation of the electricity system.
- If Chile’s goal is to have a 100% electric fleet, are there any estimates regarding when this could happen?
Although it is not easy to give a date, I estimate that with the drop in the values of electric buses (mainly due to the drop in the value of batteries) and the increase in the price of diesel, in a few years the electric option will be cheaper (considering its operating horizon to evaluate the project) even for shorter routes.
Under these considerations, I believe that the goal of a 100% electric fleet is achievable perhaps in less than a decade, where contracts with bus operators that include diesel vehicles should be terminated. The biggest challenge will come from electrifying bus fleets in regions.
- What is the current situation regarding the regions (of Chile) and electric buses?
Although Santiago is a world reference (after China) in the adoption of electric buses, this reality is very different in regions. So far there are no tendered electric bus services operating outside the capital. However, the electromobility strategy seeks to integrate the regions and there are currently projects in different stages of progress to bring this technology to cities such as Arica, Antofagasta, Copiapó, Coquimbo-La Serena, Valparaíso, Rancagua, Talca, Concepción, Temuco and Puerto Montt. Of these, Antofagasta would be the first starting the routes of 40 buses in March 2023.
- What opportunities is this transition generating?
The electrification of public transport brings with it several opportunities, from the offer of human capital training, the offer of new services related to load handling, new electroterminal projects that create work, etc. It is relevant to highlight the first point, we already have a relevant number of electric buses, which will continue to rise, and we must have people prepared in different roles. In directly related functions we have drivers and mechanics, but the technical and professional staff of electrical distribution companies (own or collaborators) must also prepare due to the impact that the electric terminals have on the distribution network.
It should also be noted that transitioning to an electric transport system reduces environmental and noise pollution in cities.
- In the field of electromobility, Chile is among the pioneers in the region. In the world, is there a city that Chile can emulate/that could serve as a model?
Chile has the largest fleet of electric buses in the world after China (although given the size of the country, far below), so that would be the reference country or cities in that country could be sought to take as an example, although unlike us its growth has been due to strong state subsidies. For example, according to IES Synergy, the bus operator of the city of Shenzhen received from the state for 9 years about 60 thousand dollars for each electric bus purchased. In 2017 the bus fleet in the city was 100% electric.