Electrification is poised to turn school buses into money-making arbitrage assets

Across much of the U.S. this summer, as temperatures soared nearly every afternoon, air conditioners clicked on again and again, sending electricity demand through the roof. Just north of Boston, the normally temperate coastal city of Beverly was no exception. Since the Fourth of July, the city has experienced nearly 20 days when temperatures crested 90 degrees Fahrenheit, 10 degrees above the average high.

When electricity demand surged, the city’s small fleet of electric school buses sprang to life, sending electricity stored in their massive batteries back into the grid to prevent brownouts and blackouts. So far, the buses have contributed 10 MWh of electricity on 30 separate occasions to National Grid, the regional utility, according to Highland Electric Fleets, which supplies and manages the buses.

The test, while small, hints at the massive potential for school buses to stabilize a grid that’s being increasingly threatened by extreme weather wrought by climate change. There are nearly half a million school buses in the U.S., and many of them sit idle for more than 18 hours per day, a number that’s even higher in the summer.

“These electric buses can do a lot more” than diesel buses, said Sean Leach, director of platform management at Highland. “They can move the students however many times a day they need to, and then in other times of the day, they can become resiliency assets to support the community.”

Today, there are only a few thousand electric school buses in the U.S. But that’s about to change. States like Maryland and Maine have laws mandating their adoption, and others like Colorado and New Jersey have been running pilot programs. In addition to being cheaper to operate over time, the buses don’t pump out pounds of diesel pollution next to vulnerable children’s lungs.

Zūm wants to use its electric school buses to send power back to the electrical grid

Zūm, the startup that provides child transportation for school districts and families, is aiming to use its fleet of electric school buses to deliver power back to grid when it’s needed most. 

The company is partnering with AutoGrid, which provides energy management and distribution software, to transform Zūm’s fleet of electric school buses into one of the largest virtual power plants in the world, according to a statement from the companies. Zūm eventually plans to have a fleet of 10,000 electric buses by 2025. Once Zūm hits that 10,000 EV bus goal, the company says it will have the capacity to send one gigawatt of energy back to the grid. To put that to scale, that’s enough to power 110 million LED lightbulbs or 300,000 homes. However, Zum is far short of that 10,000-bus goal. Currently only 10% of the company’s buses are electric due to a shortage of supply, CEO and co-founder Ritu Narayan told TechCrunch.

“School buses are the largest battery on wheels,” said Narayan. “Interestingly, they are not utilized when there is a peak time for electricity, so either in the evenings or in summertime. So our bigger plan is not only what we are actually using the vehicles for during the daytime.”

This scope of the partnership, while a creative way to repurpose school bus fleets, is becoming more common in the electric vehicle industry. As EV ownership increases, companies like Zūm are recognizing the need for a give-and-take when it comes to an increasingly strained energy grid. This week, mobility company Revel announced it would work with GridRewards, an app that offers similar services to AutoGrid, in order to adjust its e-moped fleet charging schedule so it can provide power back to the grid if needed. 

School buses do present a big opportunity for such energy sharing, today more than ever. The Biden Administration has proposed a $25 billion investment in electric school buses. There are more than 500,000 yellow school buses transporting over 27 million students everyday.

The companies plan are launching the partnership in San Francisco, where Zūm has a fleet of 206 school buses, and in Oakland Unified School District, where it has 70 buses, according to Narayan. Zūm does have aspirations to expand nationwide. The company already works with schools districts in California, as well as Seattle, Chicago and Dallas, and it’s targeting Washington D.C. next.

“The transition to EVs for the school transportation sector will play a critical role in helping communities improve air quality and environmental health for student passengers and area residents,” the company said in a statement.