Public and private fleet operators could save money by switching to natural gas vehicles (NGVs) using the business model that energy service companies (ESCOs) apply to energy efficiency projects, according to a guide released by the Center for Climate and Energy Solutions (C2ES).
C2ES notes that although switching to NGVs can lower costs, many fleet managers have not converted their fleets. The nonprofit says its new report helps investors and state and local policymakers make decisions about deploying NGVs in public and private fleets, which are among the most initially promising areas.
The findings are part of a two-year initiative, in partnership with the National Association of State Energy Officials (NASEO) and with funding from the U.S. Department of Energy’s Clean Cities Program, to develop innovative finance mechanisms aimed at accelerating the deployment of alternative fuel vehicles and fueling infrastructure.
The guide analyzes the cost-saving potential for switching tractor-trailer truck, school bus, and light-duty vehicle fleets. Key findings include the following:
– Incorporating NGVs into fleets can significantly reduce petroleum use and harmful emissions, especially with tractor-trailer fleets.
– The major factors affecting the financial performance of NGV fleets are the fleet’s vehicle technology and vehicle usage patterns.
– NGV projects for tractor-trailer fleets result in net cost savings under nearly every fleet size and travel scenario considered in the guide’s analysis.
– Using natural gas to fuel school bus fleets also results in net cost savings for fleets whose vehicles travel about 20,000 miles per year.
– An energy service provider can help with the transition to natural gas by familiarizing fleet managers with new technology, identifying a project’s greatest savings potential, reducing financial risk, and helping maximize financial payoff.
“Switching from diesel to natural gas is a net cost-saver for fleets in many cases. But even the most cost-conscious fleet manager can hesitate to switch to a new technology, especially in a time of low oil prices,” says Nick Nigro, a C2ES senior advisor and lead author of the report. “The fleet market can learn a lot from ESCOs and how they’ve deployed energy efficiency technologies by offering valuable services and training in exchange for a share of the cost savings.”
“Many of NASEO’s members … are eager for solutions and strategies supporting the use of domestic and clean transportation fuels,” adds David Terry, executive director of NASEO. “The strategic planning guide is an important addition to states’ toolboxes in their efforts to reduce reliance on imported oil, improve air quality, and stimulate economic growth.”
The report, “Strategic Planning to Enable ESCOs to Accelerate NGV Fleet Deployment: A Guide for Businesses and Policymakers,” is available here.