UNDER WHAT CONDITIONS DO CLEAN FUEL BUSES PROSPER MASTER THESIS By Ovidio Hensley Savalie Djoe 1545000 in partial fulfilment of the requirements for the degree of Master of Science in System Engineering, Policy Analysis and Management at the Delft University of Technology, to be defended publicly on Wednesday February 15 th, 2017 at 15:00. An electronic version of this thesis is available at http://repository.tudelft.nl/. Thesis committee: Dr. ir. Z. Lukszo, Delft University of Technology Dr. ir. I. Nikolic, Delft University of Technology Dr. W.W. Veenman, Delft University of Technology A. Ashkenazy Delft University of Technology ii | P a g e MASTER THESIS HENSLEY DJOE PREFACE This thesis is the final requirement for me to finish my master System Engineering, Policy Analysis and Management. It is the result of years of personal development and dedication throughout my bachelor and master studies. Studying at the faculty of TPM has helped me learn how to get the best out of myself, reach my personal study goals and made me the person I am today. Finishing this study means that I have reached my academic goal, an achievement that I will always be proud of. I would like to take this moment to express my deepest gratitude to the people that helped me throughout the past few months. I would like to thank my thesis committee for their valuable time and support. I wish to thank Zofia Lukszo for offering to support my thesis already before I started. I enjoyed following your classes during the master which helped me refresh my mathematical skills at the very end of my studies. I appreciate the fact that you were always sharp during our feedback sessions which kept me consistent and forced me to critically reflect on my work. I wish to thank Wijnand Veeneman for sharing his expertise in the field of public transport. I appreciate your efforts in improving my analysis of the public transport system and critically reflecting on the assumptions and modelling decisions I have made. I wish the thank Igor Nikolic for supporting me throughout the thesis, and introducing me to the subject. I admire your passion for ABM and thank you for introducing me to the field of ABM. Your advice has been extremely valuable throughout my master thesis and helped me through my job search as well. I wish to thank Amit Ashkenazy for his unconditional support throughout my thesis. Your knowledge on policy, the case study and your academic experience, have greatly improved the quality of my thesis. I enjoyed working with you for the past few months and I am very grateful for your guidance. Finally I would like to thank my friends and family for their support during the last months, and the last few years. Your support has helped me through difficult and turbulent times, and inspired me finish my studies and graduate. Your efforts will forever be remembered and I will always be there for support in case you need it. After finishing my thesis I wish to spend much more time with you than I have done in recent years. H. Djoe Delft, January 2017 iii | P a g e MASTER THESIS HENSLEY DJOE And now for my final trick………….. iv | P a g e MASTER THESIS HENSLEY DJOE EXECUTIVE SUMMARY Public transport plays an important role in satisfying transportation demand, though its social and environmental benefits are much wider. Travelers switching from automobiles to public transport can save on costs of vehicle ownership, help cities reduce air pollution and public expenditure on health care, and reduce congestion in the city. Reduced costs and increased productivity can even affect international competitiveness. The public transport industry nevertheless faces serious challenges. Urban transport is one of the main causes of air pollution. Reducing exhaust emissions from individual motorized vehicles has been a major policy goal, as motorized vehicles emit greenhouse gas emissions (GHG) and pollutants like CO, NOx, SO2 and particulate matter. Israel is currently facing serious issues with air pollution from public bus transport according to the Israeli Ministry of Transport. The World Health Organization has ranked air pollution levels in Israel among the highest in the West and 34th worldwide with air pollution as its biggest contributor. Electric buses can contribute to a cleaner city environment, and indeed many big cities like London, Sao Paolo and New York have installed some form of low carbon buses. However, the full electrification of urban bus fleets so far has been limited. In order to better understand the potential of electrification and its possible impacts on the city environment and infrastructure, the Ministry of Energy and National Infrastructure in Israel has engaged an international research team to build several models that simulate and weigh the different scenarios for electrification over the coming years. This thesis is a part of that concerted effort. This research will address the knowledge gaps concerning the benefits of electrification in relation to policy measures, and the impacts of electrification on operational performance in both the transport and energy systems. The main research question is: How does transport policy and technology affect the market penetration rate of electric mobility in Tel Aviv, and it’s electricity consumption? In order to answer the question, a literature review was conducted as well as interviews with experts in the public transport sector. The obtained knowledge on bus fleet replacement and the public transport system were used to create an agent-based simulation model capable of answering the main research question. A simulation period of 16 years was chosen and a second case study (Noord- Brabant) was included. Agent-based modelling (ABM) has proven to be a suitable method to model the market penetration of EVs in the consumer market and can be used to model market penetration of clean fuel buses in public transport as well. It is capable of modelling heterogeneous stakeholders and interactions between those stakeholders in a dynamic environment. The answer to the main research question, is that: In general, the market penetration of electric buses is likely to increase steadily over time regardless of subsidies, as their total cost of ownership (TCO) steadily drops due to technological developments. Subsidies do increase the market penetration rate compared to no subsidies, in case the TCO of electric buses and diesel buses are a close match. A subsidy of 25% of the TCO was enough to stimulate the diffusion of electric buses. The modelling experiments indicated that the diffusion of electric buses in bus fleets can result considerable amounts of additional electricity demand due to charging of v | P a g e MASTER THESIS HENSLEY DJOE batteries. Additional energy demands beyond 10MW were measured in peak times in bus fleets containing around 1200 electric buses. Ebuses were generally found more attractive in both case studies under different diesel price scenarios. The market penetration rates of electric buses in the Noord Brabant model were on average considerably lower than they were in the Tel Aviv case. This was likely caused by differences in daily kilometre range between diesel buses and electric buses, and an absence of subsidies. vi | P a g e MASTER THESIS HENSLEY DJOE TABLE OF CONTENT Executive summary ................................................................................................................................. v Table of content ..................................................................................................................................... vii list of figures ........................................................................................................................................... xii list of tables ............................................................................................................................................ xv list of abbreviations ............................................................................................................................... xvi 1 Introduction ..................................................................................................................................... 1 1.1 Israel case ................................................................................................................................ 1 1.2 Research problem ................................................................................................................... 2 1.3 Problem statement .................................................................................................................. 3 1.3.1 Expected outcome of the model ......................................................................................... 3 1.4 Research question and sub questions ..................................................................................... 4 1.5 Research method .................................................................................................................... 4 1.5.1 Agent-based modelling method .......................................................................................... 4 1.5.2 Modelling and analysis tools ............................................................................................... 6 1.6 Thesis outline........................................................................................................................... 7 2 What are the considerations that affect governments’ decisions to subsidize electric mobility and other clean