Electric vehicle study CITY OF MINNEAPOLIS 1 Electric vehicles in - PowerPoint PPT Presentation

Electric vehicle study CITY OF MINNEAPOLIS 1

Electric vehicles in the city fleet Overview of presentation • Staff direction • City fleet and current market • Financial analysis • Next steps 2

Electric vehicles in the city fleet • Staff direction • Benefits • Feasibility • Reasonable exceptions • Cost benefit • Various alternatives • Recommended approach 3

Electric vehicles in the city fleet 4

Why Electric Vehicles (EV) ? • City of Minneapolis Climate Action Plan (2006)

Why Electric Vehicles (EV)? Greenhouse Gas Emissions Trend – MPLS Fleet 20,000 Metric Tons CO2 18,000 16,000 14,000 Metric Tons CO2 12,000 10,000 8,000 6,000 4,000 2,000 0 2013 2014 2015 2016 Year 6

Current electric vehicle availability Light Heavy Non ‐ Road Duty Vehicles Duty Vehicles Vehicles SUV / Trucks Light Heavy Solid Heavy Light All Sedans Mini / Cargo Pickup Pickup Waste Const. Const. other vans Vans Barclays Center, Brooklyn, New York EV Yes Yes Testing R&D Testing Testing R&D R&D Testing

City vehicle profile Light Duty Heavy Duty Non ‐ Road Vehicles Vehicles Vehicles All other Vehicles SUV / Minivans Trucks / Cargo Heavy Pickups Light Pickups Construction Construction Solid Waste Heavy Sedans Light Vans Total 297 160 16 240 191 55 29 18 3 Volvo Western Crane Ford Ford Chevy Ford Wheel Bobcat Polaris Ex. Star Carrier Focus Escape Colorado F-250 Loader S185 Ranger SB4700 LET2-40 L-90

Electric vehicles in the city fleet • Scenario Evaluation • Background • Approach • Outcomes 9

Strategies for EV Transition Terminologies Benefits • Maintenance Savings: The savings in parts and labor for maintaining the vehicle fleet and electric charging infrastructure • Fuel Savings: The savings in fueling the entire fleet, includes gasoline, biodiesel, and electricity purchases from business ‐ as ‐ usual (BAU) • CO 2 Reduction: The metric tons of carbon dioxide (MTCO 2 ) emissions reduced from BAU Costs Total Capital Costs: The cost of purchasing the vehicles and charging stations • Total O&M Costs: The total 10 ‐ year lifecycle costs for fuel and maintenance • of the fleet Lifecycle Costs: The summation of Total Capital Costs and Total O&M Costs •

Strategies for EV Transition Terminologies Net Present Value • Net Present Value: The total discounted net benefits over the analysis period and represents the value of the total benefits minus costs in 2017 dollars • Discount Rate: The analysis employs a discount rate for present value discounting. The discount rates capture the time ‐ value of money as well as uncertainty risk. Cost Effectiveness • Cost Effectiveness ‐ CO 2 Reduction: Compared to BAU, the cost to save one metric ton of CO 2 by integrating electric vehicles into the fleet for each scenario

Strategies for EV Transition Formation of Scenarios Key Assumptions • 10 year timeframe for all scenarios (2018 ‐ 2027) • Number of EV replacement in a year < Number of ICE replacements in a year • All ICE vehicles cannot be converted to EV in a 10 year timeframe City’s Existing Projected EV Plan for Vehicle Industry Assumed Replacement Pricing, Financial (i.e., how many Technology, & Constraints vehicles each Trends year) Number and Type of Priority Goals of EV to be Fleet Replaced in Conversion a Year

Strategies for EV Transition Formation of Scenarios ‐ (Including Consideration of Financial, Industrial and Technical Constraints) Scenario Objectives • Scenario 1 ‐ Maximize CO 2 reduction without financial constraints • Scenario 2 – Maximize CO 2 reduction with $5M financial constraint • Scenario 3 – Maximize Net Present Value with $5M financial constraint • Scenario 4 – Maximize Total Benefits (fuel, maintenance and CO 2 ) • Scenario 5 – Maximize total number of EV’s purchased • Scenario 6 ‐ Maximize Net Present Value while delaying EV purchase for two years to save funding (results same as Scenario 3) Key Considerations Among All Scenarios • No SUV / Minivan Vehicle Purchase Until 2020 • No Heavy Duty Vehicle, Heavy Construction Vehicle, Light Construction Vehicle Purchase Until 2022

Strategies for EV Transition Results and Comparison of Scenarios Scenario Scenario Scenario Scenario Scenario Business 1 2 3 / 6 4 5 As Usual

Strategies for EV Transition Results and Comparison of Scenarios Total Number of EVs 500 50% 45% 45% 44% 450 45% 400 40% Percent of Fleet 350 35% • # of EVs 300 30% 27% 250 25% 200 20% 8% 150 15% 8% 100 10% 50 5% 456 271 82 82 439 458 0 0% Sc. 1 Sc. 2 Sc. 3 Sc. 6 Sc. 4 Sc. 5 Number of EV Percent of Fleet

Strategies for EV Transition Results and Comparison of Scenarios with BAU Benefits [ Maintenance Savings, Fuel Savings, CO 2 Reduction ] 3 12 10.6 10.8 10.7 10 MTCO 2 in Thousands 7.7 2 8 • Million $ 4.7 6 4.7 1 4 2 0 0 0 BAU Sc. 1 Sc. 2 Sc. 3 Sc. 6 Sc. 4 Sc. 5 Maintenance Savings Fuel Savings CO2 Reduction

Strategies for EV Transition Results and Comparison of Scenarios with BAU Costs [ Total Capital, Total O&M (Fuel + Maintenance), Lifecycle ] 131.1 140 126.9 130.8 131.1 128.7 126.9 127 120 100 80 Million $ 60 Total Capital Costs Total O&M Costs 40 Lifecycle Costs 20 0 BAU Sc. 1 Sc. 2 Sc. 3 Sc. 6 Sc. 4 Sc. 5

Strategies for EV Transition Results and Comparison of Scenarios with BAU Net Present Value (NPV) [ NPV (3% & 7% Discount), Change in NPV from BAU (3% & 7% Discount) ] 0.8 1.7 1.7 0 20 0 0.6 1.4 0.6 2.5 2.5 0.8 0 ‐ 20 ‐ 40 Million $ ‐ 60 ‐ 80 ‐ 100 ‐ 120 BAU Sc. 1 Sc. 2 Sc. 3 Sc. 6 Sc. 4 Sc. 5 NPV (3% Discount) NPV (7% Discount) Change in NPV (3% Discount) Change in NPV (7% Discount)

Strategies for EV Transition Results and Comparison of Scenarios with BAU Cost Effectiveness [ CO 2 Reduction ] $ 375 $ 378 400 $ 357 350 300 $ 222 250 200 150 100 50 $ 0 ‐ $ 23 ‐ $ 23 0 ‐ 50 BAU Sc. 1 Sc. 2 Sc. 3 Sc. 6 Sc. 4 Sc. 5 CO2 Reduction (Per MTCO2 Reduced)

Costs and Benefits of EV Transition Cost Considerations Capital Costs • EV typically have lower fuel and maintenance costs than ICE vehicles, but higher capital costs • There is industry consensus that the cost of EVs are trending downward as production volumes increase and battery costs decreases Fuel Economy Estimates • EV typically achieve better fuel economy and have lower fuel costs than similar ICE vehicles • The cost per kWh of electricity tends to be lower and more stable than the cost per gallon of gasoline, diesel, or bio ‐ diesel

Costs and Benefits of EV Transition Cost Considerations Maintenance Costs • EV has less moving parts , hence lower maintenance cost • Over 5 years, EVs can save an average of 35% on maintenance in comparison to ICE vehicles Charging Infrastructure Considerations • Plan ahead and install more Electric Vehicle Supply Equipment (EVSE) charging stations than currently needed (cost effective) • EVSE should be purchased at approximately 1:1 ratio with number of EVs (All EV can be charged adequately overnight) • Planning for fleet recharging during off ‐ peak periods can add up to thousands of dollars in savings • Special tariff from power suppliers for usage during off ‐ peak hours

Costs and Benefits of EV Transition Environmental Benefits Estimated Annual Carbon Dioxide Emissions per Vehicle (pounds) Over a 10 year period (2018 ‐ 2027) ‐ 64% 70,000 60,000 ‐ 40% ‐ 50% 50,000 40,000 30,000 ‐ 40% 20,000 ‐ 63% ‐ 60% ‐ 70% ‐ 66% ‐ 56% ICE 10,000 EV 0 Ivy Station, Culver City, California

Considerations Before EV Adoption Monitor: • Electric Vehicle Usage in Winter Months • Potential Sources of Funding for EV Purchases • Industry Progress with EV Review: • Vehicle Replacement Approach for New EV Models Prepare: • Infrastructure and Maintenance Staff for EV Operations

CITY OF MINNEAPOLIS Questions 24