Financing Sustainable Public Lighting

• Tool: Public Lighting Calculator
• Victorian Statewide Business Case for bulk change from 80W mercury vapour
• Tool: Revolving Energy Fund Guidelines
• Tool: Cost Effectiveness Comparison - Green Power Versus Energy Efficiency
• Case study: Joint Electricity Supply Contract with GreenPower, South Australia, 2006
• Case Study: Ownership Approaches, Salisbury City Council, South Australia
• Case Study: Life Cycle Cost Analysis by Sundsvall, Sweden
• Case Study: Engaging Consultants, New Zealand
• Tool: Forming Partnerships, United Kingdom
• Case study: Lighting Derby Private Finance Initiative, UK
• Case Study: LED Traffic Signal Purchasing Strategy, New York, 1999

Financing is sometimes perceived as a barrier to large scale replacements of lighting stock, or even spot replacements. There are, however, many ways to approach it:

• Build the business case for actions by performing a cost-benefit analysis of your options based on sound data and understanding of the technologies involved.
• Develop support internally within council over a period of time so that everyone understands the value of this investment.
• Partner with other public lighting stakeholders.
• Pursue regional opportunities for bulk purchasing and increased bargaining power. Collectively, local government is the largest public lighting customer in Australia. In deregulated markets, councils can use their position to negotiate renewable electricity purchasing, energy efficient lighting, improved maintenance and service levels, and access to public lighting data. Working on a regional level is a particularly effective way to negotiate desired outcomes.
• Pursue grants and other funding opportunities. See ICLEI Oceania's list of grants and check for funding in your state or territory. Potential financing models include loans, grants, private public partnerships, energy performance contracting, using internal council revenue (eg an environmental levy in rates), or negotiate incorporation of upfront capital into ongoing charges (e.g. modified standard tariffs).

The Public Lighting Calculator is designed to assist council officers and energy managers to enter existing lighting asset data and assess upgrade scenarios in terms of lighting levels, energy use, energy costs, and greenhouse gas emissions. For Category P (minor road and pedestrian area) lighting, you can model upgrades to T5 fluorescent lights, high pressure sodium lights, metal halide, or compact fluorescent lights. For Category V (major road) lighting, you can model upgrades to high pressure sodium lamps only. Technical data is provided on lighting performance for upgrade scenarios, together with information on the impact of pole heights on ongoing maintenance costs.
The calculator works best when downloaded to your computer, and does not take into account state/distributor specific variables such as bulk maintenance schedules, operation and maintenance costs, capital costs for replacement lighting and residual capital values of existing street lighting assets. Expert advice and financial modeling should be used in this regard.
The calculator was developed in collaboration with the Northern Alliance for Greenhouse Action (Victoria) and Sustainability Victoria, with the support of the former Australian Greenhouse Office in the Department of the Environment and Water Resources.

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In June 2008 modelling of the business case to replace 80W mercury vapour (MV) lights was funded by the Victorian Government. This modeling considered a changeover to 2x14W T5 over the next five years compared to a business as usual where changes didn’t happen until 2020 and to the purchase of Green Power. The report provides a comprehensive analysis of the opportunity to reduce emissions in Victoria from a specific bulk change program.

The report builds on several years of technical research and capacity building (including the completion of Sustainable Public Lighting Action Plans by many Victorian Councils and regions) and modeling work completed by two Victorian regional greenhouse alliances (Northern Alliance for Greenhouse Action (NAGA)) and Western Port Greenhouse Alliance (WPGA)) during early 2008.
The financial modeling has led to strong interest by many of the Councils to complete bulk changes to replace their 80W MV’s with more efficient fittings. Additionally it has built upon work with local distribution businesses to develop costings and work with Councils on win-win outcomes for bulk changeovers.

The final report can be accessed via the State Developments section of the Victorian page of this Toolbox.

For more detail contact Paul Brown, Ironbark Sustainability, Dan Pleiter, WPGA or Judy Bush, NAGA.

These guidelines illustrate how Penrith City Council established and formalised a revolving energy fund process within Council operations. The guidelines provide a framework for the administration of the fund, outline its purpose and indicate how it is to be managed.

Note: this resource is only available to CCP councils. To access it, login via the CCP Australia homepage, then click on Project Management in Action Resources.

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To help you decided whether to purchase green power for your public lighting, see pp. 14-15 and Appendix 2 of Public Lighting in Australia - Energy Efficiency Challenges and Opportunities (Australian Greenhouse Office, 2005), which provides a comparison of the cost effectiveness of two different strategies for reducing the greenhouse gas emissions of public lighting: purchasing green power and installing energy efficient lighting equipment.

In many cases, it is more cost effective to install energy efficient technologies rather than purchase green power. If, however, you are interested in investigating green power options, the relevant regulatory body in your state or territory provides a list of licensed electricity retailers in your area. See the stakeholder section of your state or territory's page in State Information for a link to this list. To find out which of these offer green power, see the official Green Power website.

Note: To ensure that the green power product you purchase is environmentally sound, see the Green Electricity Watch's 2006 Report, which provides an independent comparison of the green electricity products in your state or territory.

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In 2002 a joint electricity supply tender was negotiated by the Department of Administrative and Information Services on behalf of State and Local Government for unmetered public lighting and general metered sites.

The Local Government Corporate Services re-negotiated this contract on behalf of councils. Commencing 1 January 2007, this new contract included a percentage of renewable energy into the standard contract (i.e. 20% renewable + 80% non-renewable).

The “Across Government Electricity Supply Contract for 12 hour and 24 hour Unmetered Lighting Assets” covers street lighting and traffic signals. It is contracted to AGL Pty Ltd until 31 December 2009, including the availability of 20% GreenPower. Currently 38 councils purchase 20% GreenPower for street lighting. The process is also assisting to simplify administration and improve data management.

For more information contact Local Government Corporate Services on Ph: + 64 (0)8 8223 8501 or Email: admin@lgcs.com.au

Salisbury Council developed specifications on the right of council(s) to own maintenance and determine fitting types for council-owned land subdivisions. This has resulted in a great reduction in maintenance costs. Contact Colin Pitman, Salisbury City Council, Ph: +61 (0)8 8406 8204.

Sundsvall Council in Sweden utilised a life cycle cost (LCC) analysis to develop more energy efficient public lighting. The analysis examined price and energy efficiency amongst other measures such as maintenance costs. The council has since installed 16,200 Thorn ‘Streetus’ fittings as a more energy efficient options using an internal funding model.  For more information see the Centre for Analysis and Dissemination of Demonstrated Energy Technologies (CADDET) website.

North Shore City and Marlborough Councils in New Zealand have utilised consultants to review their public lighting requirements and develop best value solutions.

In Marlborough, Trans Tasman Tariff & Fuel Consultants (TTTF) established appropriate consumption and other details to issue a combined tender for all council’s electricity consumption. The review resulted in significantly lower public light charges and improved billing efficiencies.

TTTF reviewed North Shore’s public lighting operations systems and maintenance costs resulting in the introduction of a new public light control system that both reduces cost and liability exposure for council.

Contact: Craig Marshall, TTTF, Ph: +64 (0)409 531 130

A partnership between Walsall Council and Amey Highways in the United Kingdom will result in the replacement of Walsall’s 26,000 aging public lights with more efficient versions. The partnership was undertaken as part of the council’s Public Private Finance Initiative (PFI) contract.

The Street Lighting Procurement Pack, published by the 4Ps Public Lighting and Highway Management Group, is based largely on Wallsall's experience. The procurement pack provides guidance for other authorities hoping to develop similar partnerships. For more information, see:

• Council helps other authorities improve street lighting
• Street light!

In August 2007, after much debate, the whole of the Derby City Council's street lighting was taken over as a PFI (Private Finance Initiative) contract, with Balfour Beatty Power Networks being the chosen contractor. The company, in partnership with the City, will carry out all new works and maintenance as part of a multi-million pound contract to improve lighting on City streets, lasting until 2032. During the first five years of the contract, 75% of existing lighting units will be replaced with the installation of nearly 25,000 new units. It will involve the installation of new columns, electricity supply cables and then the removal of the old columns. For more information on the PFI programme, visit the Lighting Derby website.

Since 1999, New York State Department of Transportation (NYSDOT) has been the largest buyer of LED signals in New York (US), accounting for approximately 90 per cent of the 41,500 LED signals purchased across the state through the New York State Office of General Services’ procurement program. Between 1999 and February 2001, annual energy savings grew from 4.7 million kWh to almost 17 million kWh. Based on an average energy cost of $0.10 per kWh, NYSDOT estimates its annual energy savings from the LED signals to be nearly $1.5 million. Reference

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