Feasibility study of biogas busses usage in public transportation

Assets RMP OÜ

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Aim of the feasibility study

• To assess the feasibility of future biogas busses in Tartu compared to conventional diesel busses within the Baltic Sea Region Programme 2007-2010 project Baltic Biogas Bus.

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Methods

4 scenarios:

• A) new diesel bus

• B) new (bio)gas bus

• C) used (bio)gas bus

• D) used diesel bus

... and the comparison of mentioned above

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A new diesel bus

• A new diesel bus, which corresponds to the contemporary technical requirements (exhaust fumes standard min EURO V), would be purchased. The investment object according to the scenario is Man Lions City diesel solo bus, 12 metres of length, cost 210 000 EUR (net value).

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A new (bio)gas bus

• A new (bio)gas bus would be purchased (the basis for calculations is an analogue of the new diesel bus having a gas engine – Man Lions City CNG, length 12 metres, solo bus, cost 240 000 EUR (net value)). The calculations have been relying on a bus with a gas engine, designed to use natural gas. On the other hand, the features of natural gas and biogas are similar, so that it is possible to use biogas in the same engine without having the need for technical modifications.

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A used (bio)gas bus

• A used (bio)gas bus would be purchased (having had 7 years of usage), which would have to be replaced by its equivalent (7 years of usage after the depreciation of the first bus) during a 15-year calculation period. The basis for calculations relies on a hypothetical bus, its cost has been found mathematically. In this scenario, busses working with natural gas (also biogas is possible) have been used.

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A used diesel bus

• A used diesel bus would be purchased (having had 7 years of usage), which would have to be replaced by its equivalent (7 years of usage after the depreciation of the first bus). The basis for calculations relies on a hypothetical bus, its cost has been found mathematically.

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Criteria of comparison

• “Useful life” of the bus (depending on depreciation and age of the bus at the moment of purchase)

• Depreciation (including service and repair costs, replacement investment in case of exchanging the used busses)

• Fuel consumption and price (estimated over the next years)

• Conformity with the requirements coming from the exhaust fumes´ standards

• Financial factors (size of the initial investment, self-financing, size of loan and refund period with interest rates, inflation)

• Availability of bus types on the market

• etc.

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Result 1 – A new (bio)gas bus is more feasible than a new diesel bus

• The acquisition cost of a new (bio)gas bus is ca 14 per cent higher than in case of a new diesel bus, but due to the reduction of fuel consumption (approximately 8003 euros per year) the larger investment will pay for itself in less than 4 years. When using a loan (about 70 per cent of the investment size), the payback-period is even shorter. On the other hand, it must be noted that when using (bio)gas busses, indirect investments are needed – e.g. investments into fuelling systems.

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Result 2 – A used (bio)gas bus is more cost-effective than a new (bio)gas bus, a new diesel bus or a used diesel bus

• The price of a 7-year-old (bio)gas bus is approximately 3 times lower than that of a new (bio)gas bus. Also, in case of making the replacement investment, the used (bio)gas bus scenario is more feasible than the scenario of a new (bio)gas bus.

• Compared to a diesel bus, the upkeep of a used (bio)gas bus is cheaper, due to lower fuel price. Additionally, the new and used diesel bus are both more expensive than a used (bio)gas bus.

• Though, the availability of comparatively new (less than 10 years of age) (bio)gas busses on the market is quite low, which means that the actual price of the bus can differ from the estimated figure.

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Result 3 – A used diesel bus is more cost-effective than a new diesel bus

• Considering the prerequisite that used diesel busses are readily available on the market at a significantly lower price than new diesel busses, the purchasing of a used diesel bus is economically more cost-effective. Though, a used (7 years old) diesel bus cannot comply with the exhaust fumes standards designated for new busses.