Israel mulls alternatives to diesel buses

Converting buses to compressed natural gas could save NIS 1.25 billion annually.

A sensitive explosion will be conducted at a test site in southern Israel in a few weeks. It will not be a test of a state-of-the-art weapon system or sophisticated missile, but of a simple bus. Actually, two buses to be precise, one with a compressed natural gas (CNG) engine, and the other with an ordinary diesel motor. Both buses will be bombed by Israel Police sappers to test precisely whether a terrorist bombing of a CNG-driven bus causes more casualties and property damage than an identical bombing of a diesel powered bus.

The results of the test may not affect Israel's strategic standing, but it will have repercussions for the country's public transport budget and for the quality of air breathed by the people. If the test shows that the bombing of a CNG powered bus is less damaging than the bombing of a diesel powered bus, the way will be open for Israel's bus fleet to CNG. If the test goes the other way, we will probably be stuck with a diesel fleet for years to come.

Earlier this month, a conference at the Holon Institute of Technology discussed the conversion of Israel's bus fleet to alternative fuels. This is no fantasy or futuristic plan, but a revolution that is just around the corner. Thousands of electric and hybrid electric-diesel buses are in use around the world. China is the biggest user of electric buses, and 20% of buses now sold in Europe are hybrids. Volvo AB (SAX: VOLV), the world's biggest bus maker, has announced that it will halt the manufacture of diesel buses altogether in 2014.

Israel's first hybrid bus is already in the country, and was inaugurated at a gala event by Minister of Transport Yisrael Katz. It is one of six hybrid buses ordered by Dan Public Transportation Co. Ltd. for Haifa's Metronit Bus Rapid Transit (BRT) network, in which it is a partner, and which will have a fleet of 90 high capacity buses. The Metronit will begin operations in May.

In addition, Israel's first all-electric bus will arrive in April, and will be made available to Dan for a one-year trial. The bus, built by China's BYD Co. Ltd. (HKSE: 1211; Shenzhen: 2594), will be supplied by BYD's Israeli representative Clal Motors Ltd. BYD has delivered hundreds of electric buses to customers in China, the US, Finland, Germany, Italy, and the Netherlands in the past two years. At the Holon Institute of Technology conference, Clal Motors CEO Doron Vadai said that investing in electric buses is economically better than the use of diesel and CNG buses, even though they cost twice as much as a diesel bus. "The maintenance cost of an electric bus is less, mainly because it does not have an actual engine," he said. "The energy cost of electric buses is also lower."

"Globes": How much cheaper?

Vadai: "If you calculate the total energy cost from the well to the wheel, the cost per kilometer of an electric bus is a third of the cost of a diesel bus."

Dan and Egged the unready

Dan and Egged Israel Transport Cooperative Society Ltd., Israel's two largest bus companies, are quick to pour cold water on expectations of electrified urban bus fleets. At the conference, Egged technical division chief Yossi Cohen said that the bus cooperative lacked the skills to maintain a fleet of electric buses.

"We can barely find the skilled staff to maintain our current fleet," said Cohen. "Electric buses require us to completely reorganize, such as technicians' safety and protection from electric shocks. As far as we're concerned, this is a whole new world, and we're really not there."

Dan, too, is dubious about electric buses. Its representatives at the conference said that they did not know how to deal with them. "There is no chance that we'll service hybrid or electric buses in the coming years," a professional source at one of the bus companies told "Globes". "We'll stick with diesel."

The remarks by the Dan and Egged officials were backed by Robert Steimer, the representative of MAN SE (DAX: MAN), the main supplier of buses to the two companies. He says that MAN does not manufacture electric buses because the battery is not yet efficient enough. "Batteries on the market are very expensive and very heavy. An electric battery can weigh three tons or more, and instead of carrying passengers, the bus carries a battery," he says.

Besides current battery technologies there are other power systems, such as overhead electric cables and pantographs. Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) is developing a super capacitor system which can recharge a battery in seconds every time a bus stops at a station. But these are not yet commercial systems.

"Battery prices are falling steadily," says Prime Minister's Office National Program for Oil Alternatives the acting director Sagi Dagan. "Electric buses are the best solution for urban transport, mainly because of the reduced noise and pollution, but probably another 6-7 years will pass before cheap and efficient enough batteries will come on the market. It is therefore important to begin learning about the technology now."

Saving NIS 1.25 billion a year

The main competitor to electric and hybrid buses are CNG buses. CNG is a technology first developed in the 1930s, and converting buses to CNG does not involve the massive conversion needed for electric and hybrid buses, as CNG engines are quite similar to diesel engines. World leaders in CNG use for transport are countries such as Armenia, Bolivia, Iran, and Pakistan. In 2000-09, South Korea's government pushed a bus and truck CNG conversion policy to fight severe air pollution in cities. The Korean government spent an estimated $539 million on tax breaks and financial incentives and saved $1.5 billion to date from reduced air pollution, as well as creating a $600 million CNG for transport industry.

CNG is not especially environmentally friendly, producing only 15% less pollution than diesel, but it has a critical advantage in fuel costs and because natural gas can be produced domestically. Prime Minister's Office Alternative Fuels Administration director Eyal Rosner says, "The cost of fuel for one diesel bus is NIS 160,000 a year, and the cost of fuel for a CNG bus is only NIS 90,000. Converting Israel's 18,000 buses from diesel to CNG can save NIS 1.25 billion a year."

"We're prepared to switch to CNG buses tomorrow," says a top official at a bus company. "The problem is that there is no standard for CNG for public transport."

Surprisingly, the main reason for the lack of a CNG standard is security. Three years ago, a test similar to the one described at the start of this article was conducted by Dan and Nipko Energy Ltd., and the results were abysmal. The explosion tore open the CNG tanks on the bus's roof, spreading the gas everywhere. A source involved in the test told "Globes" that, in retrospect, the test was not prepared properly. "The gas tanks should have been strengthened or protected. The test blocked progress for two years," he said.

The Ministry of Transport will carry out the new test to blow up an electric bus, probably in April. But some government officials believe that the results should not seal the fate of the alternative fuel revolution. "We must balance different public interests," a government official told "Globes". "The huge advantages to the economy and city dwellers on one hand against the fear that in the event of a terrorist attack, God forbid, there will be two or three more fatalities. In the end, a brave decision is needed."

Published by Globes [online], Israel business news - - on January 23, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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