Jun 5, 2023
The electrification of vehicles has been top of mind for not only personal use, but also commercial. What does transitioning traditionally fossil fuel-powered engines—like delivery trucks, buses, and taxis—over to electric power look like, and why are cities pushing for this change? In today’s episode, we speak with Jim Pegg, Director of Infrastructure Products and Services at Envari Energy Solutions to discuss the environmental and economic benefits of fleet electrification.
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Dan Seguin 00:06
This is thinkenergy, the podcast that helps you better understand the fast changing world of energy through conversations with game changers, industry leaders, and influencers. So join me, Dan Seguin, as I explore both traditional and unconventional facets of the energy industry. Hey, everyone, welcome back. Today we're moving into the fast lane and talking about converting vehicles that are used for commercial purposes, such as delivery trucks, buses, and taxis away from traditional fossil fuel powered engines to electric power. That's right. We're learning about fleet electrification. So start your electric engines, they're so quiet, and fasten your seat belt because we have a great guest to explore more about this topic. So why are cities greening their fleet. Not only does this shift help reduce greenhouse gas emissions, but it also packs a punch in the fight against climate change. The transportation sector is one of the largest contributors of GHG emissions accounting for more than 20% of global emissions. The shift towards EVs, electric vehicles in commercial fleets can significantly reduce these emissions. In fact, the City of Ottawa finds to have an entirely zero emission bus fleet by 2036. While fleet electrification is still in its early stages, it has the potential to play a crucial role in helping Canada reach its 2050 netzero targets, especially as demand speeds up. So here's today's big question: In addition to producing fewer life cycle emissions than traditional vehicles, what are the economic benefits of fleet owners and operators? So buckle up friends today, we have Jim Pegg, Director of Infrastructure Product and Services at Envari Energy Solutions, here to talk to us about the new Star Fleet. Jim, it's a pleasure to have you on our show again. Now, we've been hearing a lot about electrification of vehicles. It's no secret that the government has set some ambitious goals, like the mandate for all new passenger vehicles and light duty trucks to be zero emissions by 2035. But here's what I'm curious about. Jim, what's the scoop when it comes to fleet? I'm talking about city buses, school buses, delivery vehicles and the likes are organizations who manage fleets making that transition as well. And most importantly, why is this shift in the fleet industry so crucial?
Jim Pegg 03:08
Well, it's a great question. So let's say more and more municipalities and large fleet operators are making the transition to electric vehicles, or at least starting to seriously plan out the change. Municipalities are definitely early adopters transitioning to electric vehicles, starting with their late duty fleets. And of course, the big buses. Buses are a big contributor to GHG emissions. So it has a big impact on their pathway. And that zero plans, converting them to zero emission vehicles. You know, it's just a big part of that whole journey. School buses are an important fleet to talk about as well, we can all agree less diesel fumes for our kids, less fumes they breathe in each day that better. There's actually a few studies out there that talk about health benefits for kids switching to electric buses. So you know, light duty fleets, such as delivery fleets are also starting to make the switch. There's definitely more vehicle options available for light duty fleets right now, making it a great place to start and get comfortable with electric vehicles. And importantly, the charging infrastructure that goes with them. And see, you know, the big driver there right now is GHG reduction. So as a result, you know, government grants are out there to accelerate the transition. So it's a good time for any fleet operator to start looking at the change and planning out when it will make the most sense for them. Not only from an environmental point of view, but also from a cost perspective. The grants aren't going to be around forever. And I think that's a big part of the business cases. Right now. There are their savings as well going to electric vehicles. We all see the price of the pumps going up. And there's also operational savings that can be seen with electric vehicles. Bottom line, I'd say fleets produce a huge amount of GHG emissions, converting them to zero emission vehicles will have a tremendously positive impact with lower total cost of ownership. So it's a win-win at the end of the day, the trick is making sure that EVs will meet your fleet's needs. And that's, that's a big part of the questions out there right now.
Dan Seguin 05:07
Now, with all of the benefits described, it sounds like a no brainer to make the transition to an electric fleet. So what's the catch? What are some of the actual challenges that municipalities and businesses are grappling with when it comes to electrifying their fleet vehicles?
Jim Pegg 05:27
Well, with any big change, there's always challenges. In this case, there are a few but with good planning, they are manageable. I'd say, you know, basic conversations we have typically there's seven or so key things that you need to consider. If I were to go through those, I'll try to be brief. But you know, let's start with cost. So electric vehicles, in most cases, do cost more initially. That is why understanding the total cost of ownership is important. Comparing things like maintenance costs over the life of the vehicle, energy cost, gas or diesel versus electricity. Understanding your current costs, versus what they will look like, is important to help justify that increased initial investment. Next up, I'd say vehicle availability. Is there an EV that is comparable to the vehicles that the fleets are using now that will provide the same or better operational functionality? At the end of the day, fleet operators need a solution that allows them to continue successful operation of their fleet, which takes us to the next point, EV charging with EVs. You need to think about how your charging infrastructures are going to work, work physically, do you have the capacity? What charging strategy will you use understanding when you can charge disrupting your operational needs, the cost of EV infrastructure is an important consideration. You know, many fleet operators will need to increase their electricity capacity from their utility. But this needs to be carefully planned, capacity upgrades evolve assets that last 40, 50 and sometimes 60 years. The last thing you want to do is make an investment only to find out you didn't install enough capacity for future projects like building GHG reduction projects, or that you oversize your new service and wasted money at the start. The good news is there are, you know, well thought out ways to approach these problems, proven steps to take you know, those were things to consider and strategies to allow for a phased approach to converting movies. The truth is I could go on for a while on this specific topic. But let's just say, you know, I'd highly recommend any fleet operator out there to talk to someone that does this every day that has an eye for the full picture, not just the EV power needs. But experience will be helpful on this topic. You will learn about things like preconditioning or vehicles in winter and to increase your range and winter for example. So from there, I'd say let's talk about range anxiety. It's another other piece that people think about, and this is a big one. The last thing fleet operators want us to have is vehicles stranded with no power. This is another good reason that the planning stage is so important. Looking at your fleets usage, dwell times, best case and worst case scenarios like winter operation when range is reduced. Modeling your fleet's usage is an important part of the planning process. Bus fleets are a great example of routes, or overall distance traveled in a day that can be somewhat managed and evaluated at the same time. Working to consider changes in fleet needs also important fleets and their usage patterns change every year. And they will, you know for many years to come. Some very good news is there are more and more chargers being installed around the country. This won't replace the need for fleets to have their own chargers, but it will help with some of the fleets that have more unpredictable usage patterns. You know, at the end of the day, let's face it, you have to get to where the work is. So there's lots of things to think about there. Next up, I'd say there's energy cost and reliability, you know, so switching from gas or diesel to electricity means you'll become dependent on your local utility providing electricity in a reliable way. That's why it's so important to connect with your local utility or have a partner that can do that on your behalf. Other strategies such as, you know, on site battery storage, which is great to support cost management, but it may not be the solution for you know, critical fleet reliability, because you know, batteries have very short duration output to them. So onsite power generation may come into play. Again, many things to consider that all work together and understanding your new electricity bill is what's going to look like and ways to reduce those costs will become an ongoing operational need. Having a good energy advisor will support this need and could save fleet operators a significant amount of money. And let's not forget the various grants and funding streams available. Two more that I'd want to touch on would be - maintenance and tooling. EVs require less overall maintenance. But some different expertise might be required. So training staff in a timely manner on how to maintain your fleet, if you do the maintenance in house is an important transition piece, right. Most importantly, how maintenance can be done safely. Electricity can be seen, but proper steps need to be taken to ensure safety. With any new technology or anything related to electricity, safety has always got to be top of mind. And that's a big piece of operators need to make sure they're thinking about depending on the size of their fleet and, and what's going to have to go in the planning around safety to make sure people go home safely at the end of the day. The last thing I think I've talked about I'd say is driver training. Driving an EV, and knowing how to manage your power usage can have a big impact on the success of your fleet. So knowing how to take advantage of regenerative braking, understanding the impacts, they have features such as heating, cooling of your battery, your battery life itself, hard accelerations versus smooth accelerations, I say simply put some of the simple lessons and training can have a really big impact on your fleet success. There's a lot of thought that goes into planning of fleet conversion to electric. But I say that is why experts you know, and maybe a little self plug here - such as Envari, can be relied upon to take on that transition and make that transition as smooth as possible. No two fleets are the same, but combining a fleet operator's knowledge of what they do with an organization that knows and understands electricity is a great way to start to change.
Dan Seguin 11:39
Jim, given these considerations, are there certain types of vehicles that are more suitable for electrification than others? And if so, why?
Jim Pegg 11:50
Well, I would say they're fleets that have vehicles ready now, for electrification. And I'd say there, there are fleets that are still a bit off in the future. You know, at the same time, converting a full fleet day one isn't always a great idea. Dipping a toe in the water sometimes works best. And parallel to that planning and working with a partner who understands the options out there listens to the fleet operators needs. And I can't stress that enough, you have to really take the time to understand the needs of the fleet and all their unique characteristics and understand how they use their fleets. That's a very important piece that needs to be a very collaborative approach. But you know, fleet operators are experts in how they run their fleet. And having someone that knows the electrical side of things is going to help them through those planning studies and implementations can make a really great recipe. Apart from that battery improvements are being developed, new Evie vehicles are on the way. And it won't be long before there are options out there for every fleet - big and small. But I'd say I'd say the vehicle selection, and that analysis is certainly a step that needs to be taken.
Dan Seguin 12:57
What is the current state of charging infrastructure for fleet vehicles? Is the technology there?
Jim Pegg 13:04
So yeah, so it's a charging technology has come a long way. You know, I can remember as far back as maybe 12 years ago installing so many chargers and and they've certainly come a long way since then. You know, the good news, too, is that they're constantly improving. I would say that the charging technology available today is in a good place to support fleet electrification. Options like parallel charging, AC charging DC charging, sequential charging, actually, for large overhead pantograph charging, which is often used on on bus fleets, there's a new standard that was just released that includes sequential charging for pantograph style chargers. And that's that's a big step in the right direction. And even talking about RFID tags, so I mean, the standards and so on are constantly evolving. And there are lots of different industry partners in that ecosystem, trying to make sure things get standardized because that benefits everyone at the end of the day. Bottom line, there are lots of charging options out there. The trick really is understanding which one will work best for your needs, and how to ensure it's flexible so that you can incorporate different chargers down the road. Being a technology agnostic organization, such as ourself [Envari] has really helped us find the best solution for specific applications. And to be clear, often there's a need for a mix of charger sizes and in a strategy behind you know, DC versus AC charging. Often with fleets, you want to rely a lot more on DC charging rather than relying on the rectification on the vehicle. DC does not have to mean big fast chargers people often think of level three, you know 100 kilowatt, 50 kilowatt chargers with DC chargers, you can get you know 24 kilowatt DC chargers there that are reliable and made by very reputable OEMs, so...
Dan Seguin 14:55
Being an EV owner myself, I can confirm that our cold Canadian winters pose certain challenges when it comes to battery life. Is this something to be aware of? And how can organizations mitigate any issues?
Jim Pegg 15:11
So I would say yes, it is true that the cold weather has an impact on batteries, you know, depending on where you are on the globe, there are different weather patterns and so on. But cold weather certainly has an impact on batteries, and the range needed of those batteries. Currently, there are a few ways to tackle this. One is something called preconditioning, meaning having your vehicle plugged in while it's warming up in the morning, and you can actually automate that to take place at a certain time. And it can help maintain the battery's range for that day. So that that can have a really big impact. The other factor, you know, is what we talked about a little bit earlier was a driver training. Simple things like understanding the impact of few degrees of heat can have or how people actually drive smooth versus hard accelerations.All those things have an impact on the range you get out of your battery. The good news is with upfront planning, these issues can be managed to a point where they're not issues at all, and if if more public chargers come along each year, the certainty around getting from point A to B, to C to D to E to F, and G o get stronger and stronger. There's also a lot of work going into battery technology itself that will help with cold climates as well as the speed at which batteries can be recharged without causing increased battery degradation. The risk right now is if you know fleets of vehicles are out there and they're constantly having to use fast chargers and higher power chargers on their vehicles on the smaller size fleets that can have a damaging impact on your battery life. But there's a lot of technology going into working on that. But again, with good planning and understanding of a fleets needs, there are certainly ways to plan around those issues.
Dan Seguin 16:56
We're all aware that electricity rates can vary based on the number of different factors such as time of day, the season, the customer class, etc. How can fleet operators effectively manage these fluctuations to optimize charging and minimize costs?
Jim Pegg 17:15
So you know, electricity rates are going to be a changing landscape over the coming years as, as I'd say, governments and regulators look for ways to encourage electrification, while at the same time managing infrastructure costs related to distributing power. So, you know, that said, we're also in a time of machine learning and in AI, meaning software is going to play a big part in optimizing charging schedules. There are some great organizations out there that specialize in this exact type of software, you know, pair that with the knowledge of the electricity rate structure in your area, and you can find some very effective ways to manage your electricity costs. The risk is also there, you know, if you do not plan for electricity costs and manage them on an ongoing basis, your cost could quickly increase versus an optimized scenario. You know, for example, in Ontario, there's something called global adjustment. And knowing how to manage your global adjustment costs will have a big impact on your electricity bill. Now, there's a balance. First, and most importantly, a fleet needs to operate as a fleet. So you know, a good partner will work with you to optimize your costs based on your fleet needs, and then work to educate and support fleet operators on what changes they could make to their fleet operations. That would result in some cost savings or significant cost savings. But with the changing landscape, it's something that has to be an ongoing effort for sure.
Dan Seguin 18:45
Okay, Jim, how do government policies and regulations impact the electrification of fleets?
Jim Pegg 18:53
Yeah, well, I guess I'd say there's a few ways one of the big ones is government noting that all vehicles sold as of a certain date and time will need to be zero emission vehicles, which means fleets will have to look at vehicles other than the gas and diesel options that they use now when as their fleets come to end of life. So as they're looking to replace their fleets, they're gonna have to think about what vehicles are actually going to be sold and available as they get to those different points in time. You know, the cost of electricity and distribution rates and rate design will have an impact on the total cost of ownership as we just talked about for EV fleets. You know, in other areas such as manufacturing, you know, different Import/Export policies, trade agreements with other countries, mining policies, all those different things can impact the production of EV vehicles. And, you know, right to its core, the availability of vehicles, which is obviously a big need.
Dan Seguin 19:50
Okay, sir, how about funding? Are there any incentive programs out there and how can they help those who might be considering like implication
Jim Pegg 20:01
There is funding out there right now for things such as charging infrastructure, and in some cases to support the cost delta between traditional vehicles and EVs. A couple of examples, I'd say we have the Zero Emission Transit Fund, which supports municipal bus fleet electrification, as well as school bus electrification. There's actually two parts to that one in particular, I believe it's up to 80% of the planning costs covered. And for your actual capital investments, I believe it's up to 50%, with some fairly high caps there. So there's quite a bit of funding available there. Another example would be the Canadian Infrastructure Bank is offering low interest loans to help with that initial upfront investment that's required. And we're seeing other various grant programs. There is NRCan, there's ZEVIP program which has had various phases to it as well to help support electric charging. So I mean, there's different programs coming out. And that is also a bit of an ongoing thing that we have to watch constantly and, and be ready for. And it can be a bit of a process to go through some of the applications. But once you understand the process, it becomes much simpler. And I mean, having someone to work with to do that with you, you can have a lot of success there. Each program has its own rules and requirements to apply. But I can say from firsthand experience, the funding is there. It is accessible, we've had great success, getting many of our customers some, some really great funding.
Dan Seguin 21:36
Okay, now, time to take out your crystal ball, Jim. What's the future of fleet electrification, and how do you see it evolving in the coming years?
Jim Pegg 21:49
Yeah, I mean, this is one that the engineering team and everyone loves to chat about while having the morning coffee. I think we'll see more and more advancement in battery technology. And I touched on that a bit earlier, and the charging technology along with that, and more creative ways to leverage the stored energy of multiple vehicles connected at multiple locations. I really think there's going to be some sort of an overlay where we're really able to leverage all of these different, essentially battery packs, all over the place. And then on top of that, I think as we touched on earlier, more and more vehicle options and innovation and vehicles. And in some cases, people may have to think about reframing how they use their vehicles. And hopefully, it's always for the positive, right? At the end of the day, fleet operators need to be able to run their businesses, and then continue moving forward in a profitable way. So the technology needs to be there to support that, ultimately, to help with that transition.
Dan Seguin 22:51
Lastly, we always end our interviews with some rapid fire questions. Jim, are you ready?
Jim Pegg 23:00
Let's go for it.
Dan Seguin 23:01
Okay. What are you reading right now?
Jim Pegg 23:04
Spare by Prince Harry.
Dan Seguin 23:06
Jim, what would you name your boat? If you had one?
Jim Pegg 23:11
The Tin Can.
Dan Seguin 23:13
Now, who is someone that you admire?
Jim Pegg 23:17
To give a shout out here to my wife. She's an incredible spouse. She's a mother. She's a business owner, and she does it all! She does it very well.
Dan Seguin 23:26
That's cool. What is the closest thing to real magic that you've witnessed?
Jim Pegg 23:34
Oh, I think there's real magic that happens out there every day. But I'm going to fall right into the birth of my son, I think will always be at the top of my list. Seeing that happen. That's magic.
Dan Seguin 23:48
What has been the biggest challenge to you personally, since the pandemic began?
Jim Pegg 23:54
So on a personal level, I think it's probably something a lot of people can relate to that have young kids, I think it was a tough couple of years and keeping my son on track with, you know, sort of the progression of education, missing a couple of really crucial years in there was it was difficult, but happy to say we've got some awesome teachers in the school system here and he's just getting back on track. And I think that though it was a big challenge.
Dan Seguin 24:26
Okay, now, we've all been watching a lot of Netflix and TV lately. What's your favorite movie or show?
Jim Pegg 24:35
Oh, anything Star Wars, anything Star Wars at all! I watch the whole series, you know, the Mandalorian? All of it. I love it all!
Dan Seguin 24:45
Lastly, Jim, what's exciting you about your industry right now?
Jim Pegg 24:50
Yeah, this is where I would geek out a little bit and say "what's not exciting?" Right now, you know, we're going through some major transitions. I'd say with the technology that we have, and on all the changes happening, there's collaboration like never before, really. Seeing new technology coming out constantly. It's an exciting time, I'd say to be an engineer, and to work with a team of engineers. And I have to say, I have the pleasure of working with the greatest group of engineers there is. Everyone from building mechanical lighting, electrical engineers, all the drive and passion for their work like no other group I've seen. I think it's just an exciting time.
Dan Seguin 25:28
Jim, this is it. We've reached the end of another episode of the thinkenergy podcast. Thank you for joining me today. If our listeners want to learn more about you, or the organization, how can they connect?
Jim Pegg 25:42
Yeah, well, thank you for having me, I'd say check out our website: envari.com. And just reach out through there and we're happy to reach out and have conversations. Always happy to discuss this topic and many more.
Dan Seguin 25:57
Again, thank you so much for joining me today. I hope you had a lot of fun. Cheers.
Jim Pegg 26:03
Absolutely. Always a pleasure.
Dan Seguin 26:05
Thanks for tuning in for another episode of the thinkingenergy podcast. Don't forget to subscribe and leave us a review wherever you're listening. And to find out more about today's guests or previous episodes, visit thinkenergypodcast.com I hope you will join us again next time as we spark even more conversations about the energy of tomorrow.