ITEM NO: 9 ENERGY PANEL. Report To: 24 th July Date:

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1 ITEM NO: 9 Report To: Date: Reporting Officer: Subject: Report Summary: Recommendations: Links to Community Strategy: Policy Implications: Financial Implications: (Authorised by the Borough Treasurer) Legal Implications: (Authorised by the Borough Solicitor) ENERGY PANEL 24 th July 2008 Mike Thompson Director of Operations and Performance Paul Jennings Engineering Operations Manager GREENING THE FLEET FUEL SAVING THROUGH USE OF: i) FUEL ADDITIVE ii) TRACKER/ROUTING EQUIPMENT The report identifies an action plan to help reduce fuel consumption and improved carbon emission management across the Authority s fleet. This report is produced in line with the Engineering Operations/Transport business plan reference numbers TRA02/07 and TRA That Transport Services procures a system on behalf of the Authority following a key decision if required for funding through normal procurement arrangements (for a minimum of 60 months lease or outright purchase which ever is deemed best value for the Authority), and that the Authority commits Service Areas to the use of vehicle tracker equipment on a minimum 150 units (to be funded from increased hire rates allocated to each vehicle fitted with this system). 2. That a further report, on the use and benefits from fuel additives, is presented at a future meeting of this Panel. Energy reduction initiatives support the Community Strategy and helps mitigate the effects of climate change at a local level. Energy reduction initiatives are undertaken in accordance with Council policy. All initiatives must be undertaken within existing service user budgets and/or through agreed capital allocated spending. Clearly the information set out in this report are indicative prices to enable a cost benefit analysis to be undertaken. If the funding required for this initiative is not already allocated and identified within existing budgets or a capital bid is required then it will be necessary to make a key decision, prior to any procurement process commencing. It will also be necessary to ensure that a rigorous procurement process is undertaken with a very clear, comprehensive specification in order to ensure that the Council gets exactly what it needs and is not exposed to claims from disgruntled suppliers.

2 Risk Management: Access to Information : Risk management is in line with Engineering Service and Council policy. Any background papers or further information can be obtained from the report author, Paul Jennings, Engineering Operations Manager, who can be contacted on: phone: paul

3 1.0 Introduction 1.1 A Green Fleet review undertaken by the Energy Saving Trust (published August 2007), and a subsequent report was presented to the Energy panel in August This identified a number of recommended actions within an improvement plan to be implemented over 3 years. As a result of the significant increased cost of fuel over the last few months, this report now details how two initiatives can be quickly implemented to begin to save fuel costs. 2.0 Fuel Additives 2.1 Measures have already been introduced as a trial to help save fuel through the introduction of a ChemEcol fuel additive, which claims savings of up to 6% on fuel usage. However, based on the age and profile of Tameside s current fleet, a realistic estimate of 3% is perhaps more realistic. This additive is mixed with normal diesel and red gas-oil fuel when deliveries are made to the storage tanks based at Tame Street, and therefore all vehicles should see miles per gallon improvements. To monitor the effects of the additive, Transport Services will accurately monitor 30 items of fleet that have been selected as a cross section of the fleet, and a cost comparison analysis prepared from usage over the next 6 months. Users can of course monitor their own vehicles from the information already provided by Transport Services, in respect of miles travelled and fuel used to determine if this additive has been successful. 2.2 The savings improvement) equates to approximately 28,000 at current fuel costs for an initial outlay of 7,000 treatment cost. This is a saving of 21,000 across the fleet. Councils who have already introduced such a system believe that these savings figures are achievable and realistic and that the treatment causes no long-term damage to engines or equipment. 2.3 A further report, detailing the findings from use of this additive on our own fleet, will be brought back to a future meeting of this Panel. 3.0 Tracker / Route Planning Systems 3.1 A high priority identified within the Energy Savings Trust 3 year proposals was to introduce vehicle tracking / Telematics systems. Such systems can contribute to energy savings (CO2 Tonnes per annum) and financial savings through improved vehicle utilisation route planning and accident management. In addition to this, a tracker system can be used as an anti theft deterrent, which may in turn lead to a possible reduction in the Council s insurance premiums. 3.2 Since 2005 escalating fuel costs have increased the Authority s fuel bill across all services by 82k. Fuel reductions would also reduce the level of CO2 emissions generated by its fleet thus reducing its carbon footprint. A 2.5% fuel saving would reduce our carbon footprint by 62 tonnes of carbon. 3.3 Currently, some Engineering Service vehicles have a tracker type system fitted to help improve route management and defend third party claims. These have proved useful tools for the Multi-lift vehicles ( Gritter fleet) and Gully emptying vehicles, which has helped in an internal review of the service and a proposed reduction in fleet numbers. This reduction in fleet, is expected to be implemented by September 2008 and contributes to service expenditure savings. The engineering fleet review is targeted to achieve 50k per annum through this analysis of vehicle utilisation. 3.4 A significant amount of preparatory work has already been undertaken to explore the market for a suitable cost effective system that will give the necessary information for

4 supervisors and managers to make efficient route decisions and be more proactive in the management of the council s fleet and their own service vehicle movements. 3.5 Any system proposed would be required to have the following facilities: User Access / report information The system must be capable of being accessed by the remotes of operating centres in order that the managers of drivers can access the system regardless of their location (e.g. from local depots, via web access). Real time reporting the system must be capable of reporting in real time to a minimum of 60 second intervals. Exception reporting is essential (user defined). The reports must have an export facility into a Microsoft application (e.g. Excel / Access). Mapping- The system must be capable of route mapping to street level and display route information. Historic information must be readily accessible. All information must be retained in a secure manner. All information must be accessible to the Authority (even after any equipment leases expire) for a minimum period of seven years. A support service must be capable of providing bespoke reports if requested. Essential Vehicle Information Speed; Journey times start and finish; Vehicle mileage travelled; Driver identification (although not necessarily as standard); Fuel usage; Vehicle mounted equipment operation. (Minimum of two input ports, e.g. links to PTO systems); Ignition on and engine running (idling times); and Ease of transfer of tracking equipment between vehicles. 3.6 In addition to the above requirements any system would have to be user friendly in that it must be basic and simplistic in its operation. 3.7 An initial investigation into the types and extent of vehicle tracker systems now in the market place, led to an initial 9 companies being asked to provide indicative prices on a theoretical 150 vehicles (i.e. approximately half of the Authorities vehicle fleet). Both purchase and lease indicative costs were explored, and revealed considerable price ranges (with varying system specifications). 3.8 Lease Costs ranged per month to per month. Using Best value evaluation this would be equivalent to around 270 per annum. (Based over 5 years) 3.9 Purchase costs were equivalent to around 253 per annum (over a 5 year life) Use of tracker equipment is estimated to provide management with operational data that if acted upon should save fuel consumption equivalent to 2.5% (quote from the Energy Savings Trust). This is around 23,750 litres (equivalent to 1.27 per litre) This fuel saving is therefore equivalent to around 160 per vehicle, however should fuel costs continue to escalate further to say 1.50 per litre diesel (the current trend suggests this may be the case), the effective use of tracker systems could save 190 per vehicle.

5 3.12 The shortfall (to break even) on fuel savings alone (based on installation costs of 270 per annum) is therefore approximately 110 per vehicle per annum ( 16,500) However there are potential other benefits for users through use of improved management information on vehicle utilisation and operational effectiveness: Manager s knowledge of driver s whereabouts / location at any given time will assist duty of care for lone workers. Route mapping and planning of rounds will also be vastly improved and could contribute to service area overall service delivery improvements. Accident management information / third party claims Potential insurance premium reductions 3.14 The potential use of 150 units to be allocated as follows: Engineering Service: 28 Community Transport: 15 Environmental Services: 34 District assemblies: 36 Other(TBA) Recommendations 4.1 That Transport Services procures a tracker system on behalf of the Authority (subject to a key decision, if required). The system to be based on a minimum of 60 months lease or outright purchase over whichever is deemed best value for the Authority. The Energy Panel to endorse this acquisition to help save fuel and commit Service Areas to their use on a minimum 150 units. The funding of these units to be found through increases in hire rates as appropriate. 4.2 That a further report, on the use and benefits from fuel additives, is presented at a future meeting of this Panel.

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