Electric Avenue: Two Case Studies on the Economic Feasibility of the Electrification of Transportation (Solar Charging Stations in CA & University Buses in NC)
Date
2010-04-30
Advisors
Pratson, Lincoln
Gravatt, Claude
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Abstract
The 2007 IPCC report solidified that global climate change is occurring due to the
release of greenhouse gases (GHGs) by the anthropogenic activity of burning of fossil
fuels. The effects reach beyond the realms of the environment and into health, public
policy, national security and the economy. In the U.S., transportation is the largest
energy user by end-use sector and I have chosen to focus on the electrification of
transportation as one of the more promising approaches to the sector that addresses
at the same time multiple facets of the environmental crisis. This is accomplished
through the building of bottom-up, spreadsheet-based financial models because economic
considerations are the main drivers of the adoption of these kinds of alternative
solutions. Two types of solutions are considered: (1) solar charging stations for
plug-in hybrid electric vehicles (PHEV) and electric vehicles (EV) in California,
and (2) a comparative look at diesel hybrid vs. electric buses for Duke University.
The Financial Feasibility Model (FFM) for solar charging stations in California shows
there are many combinations of user-selected inputs that yield profitable investment
outcomes. This is applicable for all three scenarios with Scenario 1 achieving the
break-even point quicker than Scenario 2 and, in turn, Scenario 3 due to the higher
upfront costs of the latter scenarios. The option of financing the project with user-specified
loan parameters can yield added Net Present Value (NPV) if the interest rate for borrowing
is below the discount rate. The FFM for university buses in North Carolina indicates
that switching from traditional diesel buses employed on university campuses such
as Duke to alternatives like diesel hybrid or electric buses also makes financial
sense. Over the life of the service of the vehicles, a comparative cost-benefit analysis
indicates that both technologies come out ahead of diesels with diesel hybrids breaking-even
first before electric buses due to the higher upfront cost of the latter.
While air quality, noise pollution, branding, public relations and other intangible
assets have clear value, they are not included in both models due to the difficulty
of assigning monetary values to such variables. The take away from the project is
that both models use conservative parameters to underestimate the benefits for better
financial decision-making for the stakeholders, that the results show that there are
many avenues towards profitability and that these models are some of the first, if
not the first, publicly-accessible of their kind.
Type
Master's projectSubject
Electrification of TransportationFinancial Feasibility Model
Solar
PHEV
Electric Buses
Diesel Hybrid Buses
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https://hdl.handle.net/10161/2223Citation
Kolomeets-Darovsky, Daniel B. (2010). Electric Avenue: Two Case Studies on the Economic Feasibility of the Electrification
of Transportation (Solar Charging Stations in CA & University Buses in NC). Master's project, Duke University. Retrieved from https://hdl.handle.net/10161/2223.Collections
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