City-wide rapid bus electrification

Location: Guangzhou, China

Population: 16,492,590 (urban population)

Climate: Humid Subtropical

Duration: 2018

Sector: Transport

Funding sources: Public-private

City networks: C40

Savings: Emissions reduction of 249,000 tonnes of CO₂.

Solutions: The implementation of a sustainable urban mobility project, including the electrification of 11,220 buses.

Multiple benefits: Social, health and economic-related co-benefits.

The year 2018 witnessed the rapid conversion of Guangzhou’s entire fleet of 11,220 buses to models run solely on electricity. This ambitious project, which also included the installation of 4,000 charging stations across the city, required an investment of $2.1 billion.

Objective – The purpose of this initiative was to make the city more attractive, liveable, and user-friendly.

Solutions – Guangzhou’s ambitious sustainable urban mobility project includes electrifying the city’s entire fleet of 11,220 buses and building 4,000 charge stations throughout the city. Because each electric bus costs roughly $266,000, Guangzhou and other Chinese cities have not been discouraged by these costly investments, as China is home to nearly all of the world’s electric buses.

Funding – $2.1 billion.

Innovation – N/A

Success factors. 1) Effective urban government is necessary: These ambitious projects require solid and effective leadership from all sectors of society, including local government, industry, bus companies, and civil society. A great engagement and collaboration between various sectors of the public sector were required to facilitate more successful public-private partnerships; 2) Using green finance tools: Guangzhou municipal officials, in collaboration with financial institutions and the bus manufacturers, operators, and transportation businesses involved, made effective use of a variety of green finance instruments. Among these are financial leasing and rental contracts for electric bus acquisitions, zero-margin benchmark interest rates, and vehicle purchase discounts.

Significant outcomes:

• Social: The city’s 30,000 bus drivers’ work life and health are now easier and better;
• Health: Guangzhou’s citizens’ health is improved by the eradication of local air pollution and the reduction of noise pollution;
• Economic: Electric buses have a lower lifetime energy cost than traditional fuel buses, saving roughly $58 million in energy costs. Maintenance costs are also reduced by about 20%;
• Environmental: The electrification of these buses is estimated to reduce CO₂ emissions by 249,000 tonnes.

Synergies with local policies:

• 2035 Strategic Planning of Guangzhou, which considers the concept of sustainable development to be a critical premise. The Planning has applied a new idea of pursuing innovative, coordinated, green, open, and shared development to meet the basic law of transformation into the high-quality stage of urban development.

Political alignment:

• New Energy Vehicle Industry Development Plan intends to assist the development of electric, plug-in hybrid electric, and fuel cell vehicles in the country between 2021 and 2022 [source].
• New Energy Vehicle Promotion Subsidy Plan establishes governmental support for 2020 to 2022 to accelerate vehicle electrification, including public transit and urban public transportation [source].
• Energy Development Strategy Action Plan (2014-2020). Its goal is to reduce China’s high energy consumption per unit GDP ratio through a series of initiatives and mandated targets to foster more efficient, self-sufficient, green, and innovative energy production and consumption [source].

Marketability:

Yes, but robust urban governance and green finance mechanisms are required.