Electrified public transport – Case Turun Kaupunkiliikenne Oy and Oy Turku Energia

BACKGROUND

Procurer

Turun Kaupunkiliikenne Oy and Oy Turku Energia - Åbo Energi Ab

Object of procurement

Acquisition of electric buses, charging solutions and maintenance monitoring for the Turku 1 line.

Value of procurement

EUR 3.8 million

Objective of procurement

The objective of the procurement is to reduce emissions:

• The switch to electric cars replaced the consumption of fossil fuels (approx. 2,500,000 litres of diesel in 10 years) mainly with electricity produced using Finnish energy forms. Turku Group’s electricity contract obligates the electricity supplier to supply CO2-free energy.
• Reducing well-to-wheel emissions, that is, emissions linked to oil refining and distribution
• Cutting down noise emissions: The noise created by an electric bus is drastically lower than that of a conventional diesel bus. This way, electric buses reduce noise pollution in urban environments.
• You can read more about the estimated emission reductions in Finnish here (opens in a new window).
• Read Janne Lankila’s 2017 thesis labelled “Sähkö- ja dieselbussin TCO- ja hiilijalanjälkivertailu Fölin linjalla” (The TCO and carbon footprint comparison of electric and diesel buses on the Föli line) via this link (opens in a new window).

Parties and operators participating in procurement 

• City of Turku: procurement expertise and the practical implementation of the procurement; the political decision-making and Group steering of the Turku Group; the public transport agency FÖLI, which buys the transport service from Turun Kaupunkiliikenne Oy
• Turun Kaupunkiliikenne Oy, procurement unit: electric buses and maintenance service
• Oy Turku Energia - Åbo Energi Ab, procurement unit: charging solution and maintenance service
• Turku University of Applied Sciences: research partner and student thesis coordinator
• VTT: Research partner
• Municipality funding: leasing financier

Procurement procedure

Limited procedure

Procurement – background

Developing urban areas play a particularly important role in steering mobility services towards a more sustainable direction. With an ever denser social structure, the issues related to providing effective public transport come to the fore. It is no longer possible to increase the use of private cars in urban centres in a sustainable way, for example, due to infrastructure costs and problems related to well-being and air quality. Cities have also agreed to reduce their carbon footprint, and in this, too, the issues related to organising transport play a central role (Aho, 2017).

Turku Region Traffic Föli provides services for the residents of Turku, Kaarina, Raisio, Naantali, Lieto and Rusko. The revamped public transport system shared by the six municipalities started its operations on 1 July 2014. After this, the whole region has had access to shared ticket products, discount groups, etc. 2015 was Föli’s first whole year of operation, when a total of 24.4 million journeys took place. The majority of Föli’s traffic has been competitively procured from private operators in addition to which some of the lines are serviced by Turun Kaupunkiliikenne Oy, the subsidiary of the City of Turku. (Föli 2014, 2015)

The board of the City of Turku decided on 8 October 2013 (§412) that the city will actively steer its fleet and its service providers’ fleets towards electric and biogas-operated vehicles, offer parking benefits for the users of cars that run on climate-friendly fuels and favour climate-friendly transport services. When it comes to Turku’s internal public transport fleet, the objective is to gradually switch to the use of electric and electric hybrid buses in connection with the invitations to tender. The City of Turku has been using electric hybrid buses since 2010 on Turku’s internal 3 and 30 lines.

A Master’s thesis commissioned by the City of Turku from the Tampere University of Technology that looked into the possibilities for introducing fully electric buses to Turku was completed in 2014. The thesis identified several potential bus lines that could be used for electric bus transport. Lines 1, 3, 30, 4, 40 and 18 were chosen for a more detailed analysis. They were comprehensively analysed both from the aspect of technical feasibility, financial viability and urban development. (Lehtinen, 2014)

On 1 June 2015, the board of the City of Turku approved the start of the electric bus pilot project on line 1. It was considered to be an essential core line of Turku’s internal traffic as well as a key development area. It also formed a suitably sized production entity from the aspect of the pilot project’s effectiveness and risk management. That said, it was also deemed that the line’s operating logic required some specific changes to enable electrification. The 15-metre six-wheelers previously used to operate the line are not available as electric, so it would be necessary to add buses to reach a similar passenger capacity. (Board of the City of Turku, 2015)

When the electric bus project was started, a decision was made to transfer the operations to Turun Kaupunkiliikenne Oy, a subsidiary of the City of Turku. The decision was based on the project’s susceptibility to technological and operative risks arising from its experimental nature as well as the fact that there was no previous experience of inviting tenders for or operating electric buses on market terms in the Finnish conditions. Using the subsidiary as the operator enabled the flexibility required to develop a suitable operating contract model. (Board of the City of Turku, 2015)

PROCUREMENT PROCESS

Procurement preparations and market dialogue

During the preparation stage, the City of Turku engaged in market dialogue with several operators in the sector. 

Requirements and benchmarks of object of procurement

Fleet requirements, performance requirements, energy consumption, maintenance contract

Terms of contract

Terms of operation for the operator, fleet requirements for the equipment supplier and maintenance requirements for the charger.

Potential challenges

The procurement challenges were linked to the deployment of the new technology and finding the right operating models. Electric buses should be seen as a system and an entity. For instance, a broken charger will quickly affect the operation of the whole system. The transport-related operating and contractual models needed to be revamped. It was also necessary to consider the contractual distribution of responsibilities in case of error situations.

Benefits/results/effects

The entire line 1 was electrified in the project. The line is operated by 6 electric buses on a daily basis. By the spring of 2019, the buses had clocked nearly a million kilometres in total. The carbon dioxide emissions have been cut by more than 800 tonnes.

The project provided a wealth of information and experience on the operation of electric buses, both from the aspect of the customer, the operator and the charger. The information is used in new invitations for tenders for electric buses. The project was closely and regularly monitored by the steering group, which comprised members of the customer, operator, equipment manufacturer, charger maintenance provider and research partner.

Procurer’s comment

The object of procurement was a new kind of technology, which involves risks. In addition, the supplier was a new company, so there was relatively little experience available of its deliveries. However, the risk was alleviated by the supplier’s experienced network of subcontractors. 

Method sharing

The experiences gleaned from the project have been shared, for example, via the national eKeko group with all operators in the sector as well as other cities.