Breaking Down Alternative Fuel Infrastructure Costs

Powering school buses with alternative fuels is gaining momentum in pupil transportation. For some, the change comes amid local government pressures. For others, switching to traditional alternative fuels is a simpler way to curb emissions than switching to electric school buses.

Whatever the reason, the transition to any alternative fuel comes at a cost. School Bus Fleet talked to experts on several alternative fuels and has a basic breakdown of what pupil transportation providers can expect to pay when making the switch.

Propane: a “Relatively Seamless” Switch

Perhaps the most popular alternative fuel in pupil transportation is propane — sometimes known as propane autogas. According to the U.S. Department of Energy’s Alternative Fuels Data Center, propane is a clean-burning alternative fuel. It is stored under pressure inside a tank as a colorless, odorless liquid. As pressure is released, liquid propane vaporizes and turns into gas that is used in combustion. An odorant called ethyl mercaptan is added for leak detection.

Todd Mouw, Executive Vice President of ROUSH CleanTech, called the switch from diesel — which most traditional school buses are powered by — “relatively seamless.”

Diesel-powered school buses can be converted to propane using a conversion kit.

The Basics of Propane Infrastructure

Propane refueling infrastructure includes a fuel storage tank, a pump, a meter, and one or more dispensers, according to Steve Whaley, former director of autogas business development for PERC, or the Propane Education & Research Council (Editor's Note: Whaley began working for Blue Bird after this article was produced in print).

Whaley said most districts choose to install propane infrastructure in a convenient, centralized location — often the bus depot. However, some larger or more rural districts covering a larger area may choose to have more than one refueling location.

When it comes to calculating how many fueling stations you’ll need, Superior Energy Systems Engineer Scott Daugherty suggests less than 25 buses per hose. Some fueling stations have dual hoses, meaning a fleet of 50 buses would more than likely be okay with a single fueling station with a dual hose setup and an island or some other configuration that allows for multiple buses to fuel at once.

The key is mapping out an efficient fueling station so that bus drivers aren’t backed up trying to fuel their buses before and after their routes. Daugherty also recommends pupil transportation departments split up who fuels their vehicles when, so drivers aren’t all trying to fuel their buses at the same time.

A standard propane refueling station with a 1,000-gallon water capacity tank and dispenser costs approximately $40,000. That’s according to Brian Raygor, national autogas business manager for Ferrellgas. The price can vary depending on the tank size, with larger stations equipped with larger tanks costing as much as $350,000. The number of pumps and dispensers, as well as whether fuel management is included, can also impact cost.

In the standard refueling 1,000-gallon tank example, the tank itself would represent 10-15% of the total cost. The dispenser could represent around 50% of the cost, and the pump and motor can represent another 10-15%. The remaining costs generally come from miscellaneous parts and fittings, Raygor said.

Installs featuring larger tanks, 12,000- to 30,000-gallon water capacity, can see the tank represent up to 50% of the cost.

In some cases, the propane retailer will cover the cost of the refueling station installation in return for a fuel contract lasting three or more years.

Transportation providers should expect to cover the cost of the site prep, which includes electrical work and supplying crash protection bollards.

Typically, the school district or contractor is responsible for site work and electrical costs; the distance from an electricity source and site condition contribute to those costs. Pupil transportation providers should consider budgeting at least $10,000 for these upgrades, Raygor suggested.

Despite the up-front infrastructure costs, propane can lead to cost savings for transportation providers.

“Ultimately propane buses are easier to maintain, save a district up to $4,000 per bus per year, heat up quicker, offer better off-the-line performance, and are much cleaner to operate,” Mouw said. “Those details have to be shared so the team understands the ‘why’ behind the transition.”

There is also a high availability of propane across the country, so transportation providers are more likely to have easier access to propane than they are with some other alternative fuels.

What About Renewable Propane?

Renewable propane is made from non-petroleum feedstocks like natural fats, vegetable oils, and various types of grease, according to the Alternative Fuels Data Center.

Renewable propane is chemically the same as traditional propane. This means districts that already have propane infrastructure installed don’t have to make any changes to their existing infrastructure.

Advice on Converting to Propane

The conversion process is fairly simple, as long as transportation providers choose the right propane provider, Mouw said. He recommends looking for propane marketers that have a focused effort on autogas with dedicated people and resources.

“Ultimately, understanding the deployment plans and future potential will help the propane provider spec the right equipment that can ‘scale’ as more propane buses are added to a district’s fleet. This will prevent unnecessary re-work on infrastructure, which will reduce headaches and costs,” Mouw explained.

Whaley also echoed this, urging transportation departments to give their propane provider and Authority Having Jurisdiction (AHJ) ample time to review the installation plans.

If you’re not yet sold on propane and you want to learn more, PERC provides resources for school districts, including a refueling guide with cost estimates, what to expect during installation, and more.

Biodiesel: Easy to Adjust Seasonally

Biodiesel is manufactured from vegetable oils, animal fats, or recycled restaurant grease. Transitioning from diesel to biodiesel requires no engine modifications.

According to Scott Fenwick, Technical Director for Clean Fuels Alliance America, said that current engine technologies — as well as several future technologies expected to be used in 2027-2030 engines to meet tightening emissions requirements — have been demonstrated to be compatible with biodiesel blends up to at least B20 and likely even higher blends of renewable diesel (more on this fuel in a minute).

Because no changes are needed either on the vehicles or fueling infrastructure, fleets are able to adjust the biodiesel blend concentrations seasonally and geographically as needed to help meet their own requirements, Fenwick explained.

Depending on the blend, the cost per gallon of biodiesel can range from being several cents cheaper than conventional diesel, to being around 30 cents more than conventional diesel.

Caring for Fuel Storage Tanks

For transportation providers with onsite diesel fueling, no changes to the tanks are required — so long as the materials are compatible and are not more than a couple decades old. However, it is considered a best practice to clean the tanks prior to introducing biodiesel.

“The use of traditional diesel fuel over years of fuel storage tends to leave precipitates, sediments, and water accumulation on the bottom of the fuel storage tanks,” Fenwick explained. “Fleets and fuel managers should have a proactive fuel management system to manage these contaminants in the fuel tanks and remediate those to prevent performance issues. Biodiesel is also a great solvent that will solubilize these sediments and could lead to vehicle filter plugging if the tank is not cleaned prior to biodiesel storage.”

Whether storing conventional diesel or biodiesel, Fenwick stressed that care must be given to keep all fuels clean and dry.

“If utilizing a public retail facility, ensure that they have a fuel management program that routinely checks for water and cleanliness of the fuel,” Fenwick added.

Another cost fleets won’t have to deal with: no additional training for technicians. The same diesel technicians and their capabilities work for biodiesel blends in the marketplace.

Fenwick suggests fleets consider alternative fuels like biodiesel and renewable diesel when they are facing pressure to reduce GHG emissions.

“Being available today means that fleets don’t need to wait for future years when electric buses and vehicles may be more affordable and can meet the performance demands. While improving a fleet’s carbon footprint, biodiesel blends can also help to reduce tailpipe emissions and improve the air quality and health of the occupants they carry,” Fenwick said.

Clean Fuels Alliance America provides research and other resources for fleets looking to decarbonize.

Renewable Diesel: An Overnight Change

While sometimes used interchangeably with biodiesel, renewable diesel is different in that it is a hydrocarbon that is chemically equivalent to petroleum diesel. Because of this, buses do not require a conversion kit. Renewable diesel is made from fats and oils like soybean oil or canola oil.

The Beaverton, Oregon, school district has been converting its school buses to different kinds of alternative fuels for several years. Craig Beaver, Administer of Transportation, said that the district has switched some of its diesel-powered school buses to electric ones. The district has also replaced 67 of its diesel-powered buses to renewable propane. Using renewable diesel was just another step in reducing greenhouse gas emissions, Beaver said.

“The cost was just a few cents more per gallon, but we were able to extend our service schedule from 7,500 miles to 10,000 miles because of the cleaner-burning fuel,” he added.

For the Beaverton School District, there were no infrastructure installation costs. That’s because its fuel provider was able to use the same tankers to deliver fuel to the district each day.

Renewable diesel is a “drop-in” fuel. Thus, the switch can virtually be made overnight.

Beaver’s school district does not have fueling stations. Instead, it uses a wet-hose system, and its vendor comes every day to fill whichever buses need fuel.

Compressed Natural Gas: Good to Go After Conversion

Compressed natural gas is produced by compressing natural gas to less than 1% of its volume at a standard atmospheric pressure, according to the Alternative Fuels Data Center.

Unlike biodiesel and renewable diesel, transitioning from conventional diesel to CNG requires a conversion kit; CNG also cannot be stored in the same tanks.

According to Marc Rowe, General Manager of Fuel Sales for Trillium Energy Solutions, the total cost of developing a CNG fueling station depends on a few factors: the fuel demand from the fleet, the site conditions, the complexity of equipment installation including the permitting processes, and the availability of utilities.

A 2014 report by the National Renewable Energy Laboratory states that a medium station serving 50-80 school buses fueling 10 gge (gasoline gallon equivalent) per night can cost between $550,000-$850,000. Again, these costs can vary depending on several factors.

CNG is cost effective for fleets, costing significantly less per gallon than conventional diesel. According to the most recently data available from the Alternative Fuels Data Center as of Dec. 2023, the gasoline gallon equivalent for CNG is nearly two-thirds the price of conventional diesel.

Pros and Cons of CNG

CNG is considered to be one of the most cost-effective alternative fuels for medium- and heavy-duty vehicles, Rowe said. CNG-fueled buses also have decades of practical, real-world deployments.

However, they do have a longer fueling time. Still, this may not be an issue for school bus fleets given the hours of operation. Buses have time to fuel throughout the day between routes.

Another disadvantage to CNG is the lack of easily accessible CNG filling stations. CNG is not as widely used as some other alternative fuels.

Still, CNG-fueled buses can save fleets money, reduce maintenance costs, and improve environmental performance, “which is a great benefit for local air quality in the communities where children go to school, play and live,” Rowe said.

Electric School Buses: Grant Opportunities Aplenty

Electricity can be used to power electric school buses. The buses can charge their batteries by drawing electricity directly from the grid and other off-board electrical power sources, according to the Alternative Fuels Data Center.

You don’t need us to tell you that electric school buses have taken the spotlight in the alternative fuel conversation in the last several years. Electric buses cost less to charge than their conventional diesel counterparts cost to fuel. However, they cost approximately three times as much as diesel buses, Highland Fleets CEO Duncan McIyntre said.

Grant programs like the Environmental Protection Agency’s Clean School Bus program, as well as public-private partnerships like Highland can significantly lower the cost, or distribute it over a contract term so the up-front cost is not as high. Even a distributed cost totals less than what fleets currently pay to purchase, operate, and maintain diesel buses.

McIyntre: Electric School Buses Require Proper Planning

Building a fleet of electric school buses involves more than just buying the buses themselves.

“It is a complex civil and electrical engineering project that includes project planning, equipment procurement, engineering, construction, utility interconnection and permitting, training, managed charging, EV fleet optimization, demand response, vehicle to grid (V2G) — and more,” McIyntre said.

Working with companies like Highland can help fleets through this process.

Electric School Bus Charging Infrastructure Costs

Up-front charging equipment costs average around $30,000-$40,000, but can vary depending on the equipment, fleet size, route length, duty cycle, utility upgrade requirements, and overall project scope.

Preparation and planning are key, McIyntre stressed.

“Without prior experience with these types of projects it can be difficult to anticipate all the costs associated with construction and installation of charging equipment. That’s why the initial site assessment and the pre-groundwork phases are so important, along with developing a close relationship with the local utility from the very beginning,” he said.

McIyntre suggests having one charging port per school bus when possible to eliminate any need to shuffle and repark buses to manage charging. There are many options to achieve this, including having multiple satellite charging points linked to a single power control system, for example.

“The right approach will vary depending on the needs of the buses’ duty cycles. But in all scenarios, having the right charge management software is essential to properly control and prioritize charging sessions,” McIyntre said. “Ultimately, making the right decision on charging infrastructure requires a detailed analysis of a fleet’s needs and is essential to saving money and ensuring vehicle uptime.”

What About V2G Tech?

Vehicle-to-grid (V2G) technology enables energy to be pushed back to the power grid from the battery of an electric vehicle to help supply energy during peak demand times, SBF has previously reported. Some school bus fleets have invested in this technology to reduce the load on their local power grid.

According to McIyntre, the costs of a V2G electric school bus project are largely similar to the costs of non-V2G projects, with the exception of a higher up-front cost for the V2G charger.

More About EPA Clean School Bus Funding

The EPA Clean School Bus funding has played a significant role in moving GHG reduction efforts forward in pupil transportation fleets.

Currently, funding can only be used for battery-electric, CNG, or propane drivetrains. Biodiesel and renewable diesel are not included as eligible replacement technologies.  

The Bottom Line

Transitioning away from diesel always requires some kind of effort — whether it’s through cleaning fuel tanks before storing biodiesel, planning infrastructure changes, or applying for grant funding to cover some of the costs. However, some alternative fuels can be more cost-effective for fleets.

Ultimately, it often comes down to funding and fuel availability.