People inside a bus; People inside a bus;

Transitioning Wales' bus fleet to zero emissions, Wales

Maximising the impact of a decarbonised bus fleet

The Welsh Government’s clear targets for responding to the climate emergency include transition to a zero-emission bus fleet by 2035. With limited capacity to invest in new vehicles and facing a fragmented existing network of more than 80 bus operators across 900 routes, a robust strategy was needed to meet decarbonisation goals.

Arup was commissioned to support a task-and-finish group to gauge the workability of a new model of funding and delivery of a zero-emission bus fleet. This was followed by a separate project to develop a detailed, strategic business case. Through a comprehensive analytical process, facilitating stakeholder workshops and applying technical and economic evaluation, we presented the Welsh Government with a clear roadmap to bus decarbonisation.

During the process, we unearthed a challenge facing many public bodies – how to secure necessary funding to deliver decarbonisation commitments in the face of squeezed budgets. Solving this problem unlocked the door to opportunities to generate extra economic and social value for Wales, through investment in home-grown technologies, manufacturing, and jobs to deliver the decarbonisation programme.

Project Summary

£100 million investment in new vehicles and charging infrastructure

122,000tonnes CO² saved per year annum by 2035

2035target date to achieve a zero-emission fleet

The scale of the challenge

With four times as many passengers as rail, bus is Wales’ most used form of public transport. But buses and lorries are responsible for the country’s third-highest share of transport emissions. The cost of transitioning from diesel to zero-emission buses (ZEBs) is prohibitively expensive for operators – vehicles typically cost double the price, with additional spend needed for charging infrastructure. To achieve targets and move polluting vehicles off the road fast requires public funding. The Welsh Government has committed to replacing the most polluting 50% of Wales’ bus fleet with ZEBs by 2028, and the remainder by 2035.

Bringing our experience and insights from previous work with Australia’s Transport for New South Wales, we proposed a system that involved government ownership and leasing of vehicles. This avoided operators having to bear sizeable upfront costs of zero-emission-vehicle purchase. Wales’ Deputy Minister for Climate Change agreed to establish a task and finish group of key stakeholders to develop these proposals.

Woman entering on a bus in Wales Woman entering on a bus in Wales
Bus is Wales' most-used form of public transport. © Transport for Wales

Envisioning a future bus network

Over several weeks, we held interactive online workshops examining components of the challenge defined by our team: network design, fleet operations, infrastructure, funding and financing, technology choices, supply chain, and operating models. The broad discussion scope was matched by the diversity of stakeholders – drawn from the bus sector, energy, technology, economic development, manufacturing, academia and finance. We made sure to bring in representatives from smaller bus operators, as well as more prominent national providers.

Our specialised knowledge in transport planning and engineering significantly contributed to steering conversations beyond the here and now, enabling us to envision potential bus networks and technologies of the future. We brought in guest technical specialists such as our energy leader, who informed the group on a future role for hydrogen gas and how its use in ZEBs could fit within broader investments in technology and infrastructure. The future perspectives raised questions and encouraged visionary thinking among the whole group.

Throughout this project, Arup’s ways of working brought client and consultant together to operate seamlessly as a single team. This meant, instead of having a fixed approach, we could draw on the breadth of Arup’s skills and experience to respond directly to our objectives and timescales. Ultimately, this led to an evolution in our original brief to deliver a strategy that offers broader and more powerful outcomes for Wales. ” Robin Beckmann Head of Transport Environment and Decarbonisation, Welsh Government

Delivering decarbonisation within tight budgets

A key challenge was finding a route to secure the necessary funding to deliver bus decarbonisation in the face of squeezed budgets. Economic development opportunities for Wales became one of the essential factors for evaluating delivery models, alongside criteria such as air quality improvements, increased patronage, network resilience, affordability, and value for money.

We identified and analysed the potential gains of bringing the bus fleet back into public ownership through a purchase and lease-back scheme called Buses for Wales. This scheme would combine wider and more sustainable economic development benefits in Wales’ transport and energy sectors, a lower financial burden on smaller operators, greater support of a resilient bus sector, and greater efficiencies from centralised capabilities and bulk purchasing.

New electric bus for 2023 in Wales New electric bus for 2023 in Wales
New electric buses require public investment. © Transport for Wales

Adopting a concept called ‘value stacking’ meant public value from investment was considered as a ‘stack' in addition to benefits from a new clean and green fleet. The right delivery model would present opportunities to create new industry and employment in Wales on the back of sustained orders for bus and infrastructure components. It would be a chance to catalyse zero-emissions infrastructure and fleet investment across the broader public sector, and to ensure the competitiveness of Wales’ small and medium-sized bus operators.

This fresh approach, alongside work by the Welsh Government’s economic development team to progress mapping Welsh supply chains, was key to securing funding.

Securing investment

Our final report recommended that the Buses for Wales option be put forward as a preferred model. The programme will require long-term commitment from the Welsh Government and funding over 20+ years to the tune of £1.3bn, according to our analysis. But our economic modelling concluded that the core benefits of carbon abatement and better air quality alone broadly offset the extra costs of a zero-emission bus fleet.

Illustration about transport modes integration Illustration about transport modes integration
'Value-stacking' opportunities to integrate transport modes, share infrastructure and maximise socio-economic benefits in the transition to a zero-emission fleet.

Our strategy secured ministerial commitments to invest over £100m in new vehicles and charging infrastructure over three years. Wales’ bus network will get a fleet of quiet, clean, comfortable electric vehicles and a bigger share of the travelling public. But the country will get much more – in technological leadership, new business, and new jobs.

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