The business case for bus operators transitioning to electric power is being “eroded”, according to a new paper by UK fleet owner and operator Zenobē.
The report, called ‘Charging Forward: How electric bus fleets can energise the UK’s cities’, stated the government needed to act over the residual charges hitting low carbon bus depots across the UK.
It highlighted that rising costs came from Ofgem’s Targeted Charging Review (TCR), which, before being introduced, transmission charges were solely linked to time of use. This meant bus operators benefitted from charging overnight during low-demand periods.
But since implementation of the TCR in 2023, electric bus operators have been penalised. Research undertaken by Zenobē at three electric bus depots across the country has found that under the TCR, energy bills for EV bus operators across the country could spike by more than 500%.
The report states this could damage the transition to electric power, which alongside cost benefits of £120,000 over 15 years compared to diesel, also includes 16.4 million fewer tonnes of CO2 emitted. It also assists local supply chains through second life battery usage.
To ensure the business case for electric buses is protected and continues to attract investment into the UK, the government’s energy and transport strategy needs to be aligned, it said.
As part of its report, Zenobē has offered solutions to ensure electrification doesn’t have a false start. These include exempting electric bus operators from residual charges (as seen in the battery storage sector) and reclassifying bus depot operation as an Energy Intensive Industry (EII).
Zenobē Founder and Director Steven Meersman said:
“The Targeted Charging Review is eroding the case for bus electrification by raising costs for operators by over 500%. The Government is clear that buses are a vital part of the UK economy.
“Resolving issues around the TCR is an important step to ensure the ecologically sustainable solutions is also the financially sustainable one. Zenobē are willing to work with Government and industry to make this happen.”
