School bus company First Student, public transportation company First Transit, and NextEra Energy Resources are working toward a joint venture to pursue the electrification of tens of thousands of school and public transportation vehicles in the U.S. and Canada.
The goal of the agreement between the transportation companies and the North American electricity supplier is to foster innovation and accelerate the mass adoption of zero-emission vehicles, according to a news release from the companies.
First Student and First Transit are part of FirstGroup PLC, a transportation services provider located in the U.K. and North America.
The transition to electric vehicles for the school and public transportation sector is expected to play a critical role in helping communities improve air quality and environmental health for student passengers, transit riders, and area residents. In addition, utilizing the sizeable batteries of school and public transportation electric vehicle fleets for distributed energy storage and grid services has the potential to make a significant contribution to long-term sustainable clean energy transition in North America.
Student Transportation Market
The U.S. and Canada combined represent the largest homogeneous student transportation market in the world, according to the companies, with approximately 520,000 yellow school buses in total. This market has remained consistent in size over time, with certain favorable factors driving fleet conversion to electric vehicles and potential vehicle-to-grid (V2G) development:
- Increasing demand for pollution-free school buses from schools, communities, parents, and student passengers.
- Strategic location of school bus depots for installation of necessary charging, storage, and grid connection infrastructure.
- Low utilization and predictable daily schedules of school buses, providing greater opportunity to optimize power charging and balance the grid.
The companies are collaborating to address these market opportunities by first capitalizing on First Student’s fleet of 43,000 yellow school buses, the largest fleet in North America, and nearly 500 depots located across 40 U.S. states and seven Canadian provinces. Combining this scale with the expertise of NextEra Energy Resources is anticipated by the companies to help accelerate electrification from individual pilots to broader fleet rollout across the U.S. and Canada.
The U.S. and Canada combined represent one of the world’s largest public transit markets, with approximately 160,000 buses and other vehicles in total, according to the companies. In addition, there are significant fleet opportunities in shuttle services that address a variety of passenger transportation needs.
These markets have demonstrated long-term stability servicing a range of clients such as municipal transit authorities, airports, and universities, according to the companies. The transit market is equally anticipating a shift to electric vehicles, driven by an increased emphasis on delivering clean, pollution-free transit solutions.
The collaboration intends to focus on First Transit’s base of more than 300 customers to create new business opportunities and revenue streams associated with fleet electrification.
“We have found a world-class partner in NextEra Energy Resources, who shares our vision of the importance that electrification and zero emission technologies will play in the future of student transportation,” said Paul Osland, president of First Student. “The electrification of school buses has already started and is poised to accelerate rapidly. This collaboration will position First Student as North America’s leading owner and operator of electric school buses.”
“With battery and electric vehicle prices falling rapidly, and with an increasing focus on sustainability, many fleets are preparing for wholesale electrification,” said Brad Thomas, president of First Transit. “The collaboration with NextEra Energy Resources will position First Transit as the leading provider of sustainable passenger transportation solutions in North America.”
“The growing shift away from internal combustion engines is expected to drive over one-fifth of U.S. energy demand by 2050,” said John Ketchum, president and CEO of NextEra Energy Resources. “Working with First Student and First Transit will enable future investments in electrification upgrades and charging stations, as well as energy management services.”
Rothschild & Co. acted as the sole financial advisor for the agreement.
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