An Economic Analysis of Electric Road System Technology an Electrification of Södertörn Crosslink
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DEGREE PROJECT IN THE FIELD OF TECHNOLOGY VEHICLE ENGINEERING AND THE MAIN FIELD OF STUDY INDUSTRIAL MANAGEMENT, SECOND CYCLE, 30 CREDITS STOCKHOLM, SWEDEN 2020 An Economic Analysis of Electric Road System Technology An Electrification of Södertörn Crosslink OSCAR NILSMO ERIC WRANNE KTH ROYAL INSTITUTE OF TECHNOLOGY SCHOOL OF INDUSTRIAL ENGINEERING AND MANAGEMENT DEGREE PROJECT IN THE FIELD OF TECHNOLOGY MECHANICAL ENGINEERING AND THE MAIN FIELD OF STUDY INDUSTRIAL MANAGEMENT, SECOND CYCLE, 30 CREDITS STOCKHOLM, SWEDEN 2020 An Economic Analysis of Electric Road System Technology An Electrification of Södertörn Crosslink OSCAR NILSMO ERIC WRANNE KTH ROYAL INSTITUTE OF TECHNOLOGY SCHOOL OF INDUSTRIAL ENGINEERING AND MANAGEMENT An Economic Analysis of Electric Road System Technology An Electrification of Södertörn Crosslink by Oscar Nilsmo Eric Wranne Master of Science Thesis TRITA-ITM-EX 2020:204 KTH Industrial Engineering and Management Industrial Management SE-100 44 STOCKHOLM Ekonomisk analys av elvägssystemteknik Elektrifiering av Tvärförbindelse Södertörn Oscar Nilsmo Eric Wranne Examensarbete TRITA-ITM-EX 2020:204 KTH Industriell teknik och management Industriell ekonomi och organisation SE-100 44 STOCKHOLM Master of Science Thesis TRITA-ITM-EX 2020:204 An Economic Analysis of Electric Road System Technology An Electrification of Södertörn Crosslink Oscar Nilsmo Eric Wranne Approved Examiner Supervisor 2020-09-24 Bo Karlsson Lars Uppvall Commissioner Contact person SWECO Thomas Sjöström Abstract The following paper is a master thesis written at KTH Royal Institute of Technology in Stockholm, Sweden. This master thesis is done in a collaboration with a Swedish Consulting Company SWECO. The main focus of this master thesis is to investigate if an implementation of Electric Road System (ERS) on Södertörn Crosslink is profitable, and if so, approximate the payback period for the investment. Additionally, the costs associated with the electrification of the bus fleet, currently operating on road 259, will be determined. There are three different ERS technologies, inductive (wireless), conductive overhead, and conductive rail have been compared, looking at advantages and disadvantages, with regard to the implementation of ERS on Södertörn Crosslink. To accompany this, case study methods have been used, where the results are based on interviews, theory and calculations. The result shows that the payback period for both inductive and conductive rail, based on this study’s forecast, is 7 years and 9,3 years respectively with regard to a discount factor of 9,0 percent. However, the conductive overhead solution does not seem to be profitable as this technology is limited to heavy trucks and buses capable of connecting to the overhead wires. The inductive ERS solution seems to be the best suitable option for Södertörn Crosslink, viewed from an economical and technological perspective. while also considering other factors such as aesthetics. Key-words: Electric Road System, Electric Road Operator, Södertörn Crosslink, Profitability, Public Transport Examensarbete TRITA-ITM-EX 2020:204 Ekonomisk analys av elvägssystemteknik Elektrifiering av framtida Tvärförbindelse Södertörn Oscar Nilsmo Eric Wranne Godkänt Examinator Handledare 2020-09-24 Bo Karlsson Lars Uppvall Uppdragsgivare Kontaktperson SWECO Thomas Sjöström Sammanfattning Denna rapport är ett examensarbete skrivet på KTH, Kungliga Tekniska Högskolan, i Stockholm, Sverige. Denna masteruppsats gjordes i samarbete med ett svenskt konsultföretag, SWECO. Det huvudsakliga syftet av denna masteruppsats är att ta reda på vilka möjligheter det finns för en elektrifiering av framtida motorvägen Tvärförbindelse Södertörn i södra Stockholm, Sverige. Syftet med masteruppsatsen är att undersöka om det finns lönsamhet i implementeringen av ett elvägssystem på Tvärförbindelse Södertörn och därefter approximera hur lång den eventuella återbetalningstiden skulle vara. Kostnader för en elektrifiering av bussflottan, som kör för närvarande på väg 259, ska också bestämmas. Tre olika tekniker för elvägssystem, induktiv (trådlös), konduktiv via luftledningar, och konduktiv via spår, jämförs med avseende på deras för och nackdelar, för att därefter kunna bestämma den mest lämpliga lösningen för Tvärförbindelse Södertörn. För att jämföra dessa tekniker har en fallstudie genomfört. Resultatet visade att återbetalningstiden för de induktiva och konduktiva (via spår) lösningarna, utifrån egen prognos, är 7 år respektive 9,3 år, med hänsyn till diskonteringsränta på 9,0 procent. Den konduktiva lösningen (via luftledningar) visade sig dock inte lönsam i och med att denna teknik är begränsad då endast högre fordon, lastbilar eller bussar, kan ansluta sig till luftledningen. Utifrån olika perspektiv, bland annat ekonomisk och tekniska mognad, visade det sig att den induktiv trådlösa elvägstekniska lösningarna kan vara bäst lämpade, utifrån ett lönsamhetsperspektiv, att implementeras på den framtida vägen, Tvärförbindelse Södertörn. Nyckelord: Elvägssystem, Elvägsoperatör, Tvärförbindelse Södertörn, Lönsamhet, Kollektivtrafik Acknowledgement We would like to begin by thanking SWECO for giving us the opportunity to do our master thesis with them, especially our supervisor Thomas Sjöström who shared valuable insights. We would also like to greatly thank our supervisor, at KTH Royal Institute of Technology, Lars Uppvall for helpful guidance. We also want to thank our seminar leader, Thomas Westin, and all the other master thesis students in our seminar group, for useful feedback. Oscar Nilsmo and Eric Wranne Stockholm, Sweden, June 2020 Foreword We are originally from different engineering programs at KTH Royal Institute of Technology: Mechanical Engineering (Oscar Nilsmo) and Vehicle Engineering (Eric Wranne). We ended up in the same master’s program Industrial Management and we have chosen to do this master thesis together. List of Content 1. Introduction 1 1.1 Background 1 1.2 Problem Statement 3 1.3 Purpose 3 1.4 Research Questions 3 1.5 Delimitations 4 1.6 Disposition 4 2. Research Context 6 2.1 ERS technology 6 2.1.1 Inductive Technology 7 2.1.2 Conductive Technology 8 2.1.2.1 Conductive Overhead 8 2.1.2.2 Conductive Rail 9 2.1.3 Summary 11 2.1.4 Costs Comparison 11 2.2 Electric Road Operator 12 2.3 Payment Model 13 2.4 Electric Buses 15 2.4.1 Depot Charging 16 2.4.2 Additional Charging 16 2.4.3 Charging while Driving (ERS) 17 2.5 BRT 17 2.5.1 Advantages and Disadvantages of the BRT System 18 2.6 Batteries 18 2.6.1 Life Expectancy 19 3. Literature Review on Economic Models Used for Calculating Electric Road Systems 20 3.1 Earlier studies 20 3.2 Investment and Calculation Theory 22 4. Methodology 24 4.1 Research Design 24 4.2 Research Process 24 4.3 Literature Review 25 4.4 Data Gathering 26 4.4.1 Primary and Secondary Sources 26 4.4.2 Data 27 4.4.3 Interviews 27 4.4.4 Assumptions 27 4.5 Data Analysis 28 4.6 Research Quality 29 4.6.1 Validity 29 4.6.2 Reliability 30 4.6.3 Generalizability 30 4.7 Research Ethics 30 5. Empirics 32 5.1 The Case 32 5.2 Road 259 32 5.3 Energy Consumption 33 5.4 The Bus Traffic on Road 259 34 5.4.1 Bus and Fuel Types 35 5.4.2 Bus Line 172 36 5.4.3 Bus Line 709 37 5.4.4 Bus Line 740 38 5.4.5 Bus Line 865 39 5.5 Costs 40 5.5.1 Bus and Maintenance Costs 40 5.5.2 Battery Costs 41 5.6 General Traffic on Road 259 42 5.7 Chapter Summary 42 6. Results 44 6.1 Calculations 44 6.1.1 Electric Road Operator Costs 44 6.1.1.1 ERS Costs 44 6.1.1.2 Charges, Incomes and Forecasts 45 6.1.1.3 Payback Period and Net Present Value 46 6.1.2 Battery Capacity Requirement 48 6.1.3 Bus and Component Transitioning Costs 49 6.1.3.1 Fuel Costs 49 6.1.3.2 Battery, Receiver & Buses Costs 49 6.1.3.3 Mechanical Arm Costs 50 6.1.3.4 Pantograph Costs 51 6.1.3.5 Lifetime Cost 51 6.2 Findings 51 6.2.1 Electric Road Operator 51 6.2.1.1 ERS Costs 51 6.2.1.2 Charges, Incomes and Forecasts 52 6.2.1.3 Payback Period 55 6.2.1.3.1 Comparisons 56 6.2.2 Battery Capacity Requirement 58 6.2.3 Bus and Component Transitioning Cost 61 6.2.3.1 Fuel Costs 61 6.2.3.2 Battery, Receiver & Bus Costs 62 6.2.3.3 Mechanical Arm Costs 63 6.2.3.4 Pantograph Costs 63 6.2.3.5 Lifetime Cost 64 6.2.4 Subsection Summary 65 7. Analysis & Discussion 67 7.1 Sensitivity Analysis 67 7.2 ERS Technology, Charges, Incomes and Payback Period 69 7.3 Battery Capacity Requirement 70 7.4 Energy Saving Potential and Vehicle Lifetime Costs 71 8. Conclusion 73 8.1 Answer to the Research Questions 73 8.2 Research Contribution 75 8.3 Limitations 76 8.4 Recommendations for Future Work 76 List of References 78 Appendix 89 Currencies 89 Payback Periods 89 Bus Lines 95 List of Figures Figure 1. The Concept of Inductive ERS (Tongur, 2018) 7 Figure 2. The Concept of Conductive Overhead (Nashed, 2018) 9 Figure 3. The Concept of Conductive Rail (Bateman et al., 2018; Nashed, 2018) 10 Figure 4. The Payment Model (Hasselgren et al., 2018) 14 Figure 5. The Research Process 25 Figure 6. Tvärförbindelse Södertörn (Huddinge - Tvärförbindelse Södertörn, 2020) 33 Figure 7. Skarpnäck - Norsborg 37 Figure 8. Huddinge Station - Länna Handelsplats (Truckvägen) 38 Figure 9. Kungens Kurva - Huddinge Station 39 Figure 10. Handen - Skarpnäck 40 Figure 11. The Pricing Development (Goldie-Scot, 2019) 41 Figure 12. Payback Period for Inductive 55 Figure 13. Payback Period for Conductive Rail 56 Figure 14. Payback Period for Conductive Overhead 56 Figure 15. The Energy Consumption of Bus Line 172 58 Figure 16. The Energy Consumption of Bus Line 709 59 Figure 17.