PROMOTION & FINANCING OF INNOVATIVE GREEN TECHNOLOGIES ... · PDF filePROMOTION & FINANCING OF...

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PROMOTION & FINANCING OF INNOVATIVE GREEN TECHNOLOGIES “STREET LIGHTING” Leo McKenna Chair, UNECE TOS PPP International Centre of Excellence & Specialist Centres Bishkek, 08 November 2012

Transcript of PROMOTION & FINANCING OF INNOVATIVE GREEN TECHNOLOGIES ... · PDF filePROMOTION & FINANCING OF...

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PROMOTION & FINANCING OF INNOVATIVE GREEN TECHNOLOGIES

“STREET LIGHTING”

Leo McKenna

Chair, UNECE TOS PPP

International Centre of Excellence & Specialist Centres

Bishkek, 08 November 2012

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Street Lighting DiscussionLeo McKenna

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Street Lighting Discussion

1. Street Lighting in the UK

2. Typical Challenges

3. Potential solutions to address the challenges

4. Proposed Model

5. Case Study: Birmingham

6. Other Case Studies – including videos

Agenda

3Street Lighting Discussion

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1. Street Lighting in the UK

Agenda

4Street Lighting Discussion

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Street Lighting in the UK 1/4

OVERVIEW

Around 7.5 million Street Lights in the UK

A high profile front line public service Often taken for granted

Attracts attention when lights not performing or out

No legal duty to provide public lighting – BUT once lighting is provided (installed & in use) there is a legal duty to maintain it…

This is usually discharged by following recognised standards: British and European Standards;

Code of Practice / Well Lit Highways;

Good industry practice, etc.

Key increasingly is more effective Asset Management

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Street Lighting in the UK 2/4

OVERVIEW (Cont’d)

History of underfunding for lifecycle replacements (Major Issue) Legacy of old lighting and capital funding needs

Design life of typical lighting column is 25 to 30yrs. E.g: Stock of 50,000 units would require 2,000 replacements p.a.

Typical replacement cost = £1,000 / £1,500 per unit

Capital required (year on year) – £2m to £3 (every year)

Budgets unable to support this – Shortfall over many years

Strategic Asset Management key to managing and maintaining an effective and efficient service; become proactive not reactive

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Street Lighting in the UK 3/4

BENEFITS OF THE LED SOLUTION (LIGHT EMTITTING DIODE)

Compliant solutions - to standards

Better quality lighting solutions – “white light” / robust in-service life & performance

Better lighting level control – individual lights

Reduced energy requirement & carbon emissions – Delivery of cost savings & climate change commitments iro standard discharge lights

Reduced maintenance Outages

Detection

Vehicle Journeys

Replacement lamps & components

Reduced total cost of ownership

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Street Lighting in the UK 4/4

THE PPP MODEL

Successful model for Street Lighting in the UK Attracts major Private Sector Capital investment even in

challenging conditions (e.g. Birmingham and Sheffield PPPs)

Long Term Contracts Typically 25 years

Risk Transfer

Capex/Opex - Phases of the Contract Core Investment Period (CIP or Capex) – Initial 5yr major

investment

Post Core Investment Period (PCIP)

Opex – ongoing operation & maintenance

Output Specification (OS) with robust Performance Standards (PS)

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2. Typical Challenges

Agenda

9Street Lighting Discussion

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Typical Challenges 1/3

Increasing Focus on Asset Management Systems

Risk Management (Risk Assessments & Control Procedures)

Industry Guidance Institute of Lighting Professionals (ILP) Technical Report (TR22)

Health & Safety implications U-turn and lamps being turned back on (i.e. following road accident

deaths and attacks under switch off policy)

Duty of Care Legal/Cost Implications

Developing a replacement strategy

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Structural integrity of columns/poles: Risk of collapse

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Typical Challenges 2/3

Continual annual price increases predicted for future Municipalities have seen Energy prices rising dramatically in recent years

Volatile & increasing supply & demand pressures – focus on reducing energy consumption (reduce base load)

Some authorities are considering drastic actions - such as switching off lights (part night lighting / selective switch off)

Global warming (UK Carbon Reduction Commitment – CRC) Carbon Tax Scheme (Legal requirement – £ Incentives & Penalties)

Local Authority Carbon Leadership

Commitment to Reduce Carbon Footprint (CO² emissions)

Modern Lighting Standards Better control of obtrusive light - LED

Increased energy consumption National review and Re-rating of existing discharge lamps

Energy crisis and environmental issues

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Typical Challenges 3/3

Funding - need to modernise old, out dated and expensive lighting systems

Spend to Save

Investment in more efficient equipment - luminaires, electronic control gear, more efficient lamps & new lamp technologies (LED)

Longer life columns (50yr design life) – extra over cost

Third party revenue generation initiatives Column advertising

WiFi on columns

Funding

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3. Potential solutions to address the challenges

Agenda

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Possible solutions to address the challenges 1/4

All municipalities should have a documented street lighting policy which sets out: How they intend to provide all aspects of the street lighting service

What levels of service they aim to achieve

Things to include in the policy documents: Light levels - careful selection of lighting levels utilising flexibility in new

standards (energy savings via lighting to lower levels when applicable)

Equipment selection incl. increased life i.e. columns and lanterns

Switch times, Dimming & Trimming regimes

Lamp technology (LED / white light)

All equipment to be switched i.e. signs and bollards, i.e. not “on” 24hrs

De-illumination of signs & bollards (specify when & where)

Careful consideration of light control (Glare & G)

Planning Ahead

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Possible solutions to address the challenges 2/4

Effective management systems (more proactive than reactive)

Accurate / detailed inventories (managed & maintained) How they intend to provide all aspects of the street lighting service

To support interventions (planning & budgets)

Maximise asset service life (asset sweating)

To support Municipal reports and Business Cases

To support customised maintenance regimes

Targeted replacements (on needs basis)

Identifying & sharing best practice With other municipalities & partners

More effective forward programming and planning Robust information to support budgetary needs

Effective Asset Management

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Possible solutions to address the challenges 3/4

Refined maintenance standards, systems & methods of working Lighting standards

Response times

Maintenance requirements & regimes

Trimming & Dimming (Dynamic control - Variable light levels) Trimming (Switch on later – Switch off earlier – 15mins each side)

Variable light management & control – reduce levels to suit traffic and activity levels

Review processes Reduce duplication & overlap

Use of Innovation – Intelligent Control System New techniques & technologies

Review Standards

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Possible solutions to address the challenges 4/4

Funding Prudential Borrowing - Accessed by Public Bodies

Green Investment Initiatives - Priorities towards Energy Efficiency and other renewables projects

IFIs – International Donor Community for capex

Energy efficiency debt/equity funds - This option could provide a quick and convenient financing route, although equity returns required may make this more expensive source than prudential borrowing

Corporate support - Part of an overall outsourcing delivery structure, where the private sector would pay for the assets and the Municipality would make repayments through a deferred payment plan

Funding Alternatives

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4. Proposed Model

Agenda

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Proposed Model

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Subcontracts

Replacements

Maintenance

Energy

Investments

Energy management

contract

Savings

Traditional Model Proposed Model

Transferred Risks

Investment Risk

Efficiency enhancement risk

Energy Contractor Guarantees

Brightness Level

Stable energy consumption

Management simplification

Availability commitment

On-going compliance with regulations

Economic, energy and carbon savings

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5. Case Study: Birmingham

Agenda

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CASE STUDY - Birmingham PPP Contract

Overview

UK Largest Authority Highways PPP

£2.7 Billion, 25 Years, June 2010 start

Covers all roads, footways, lighting, trees, etc.

Lighting Requirements

Modernisation – to improve lighting through innovative solutions

Robust asset management

Effective & proactive energy management capability

Reduce crime, fear of crime & night time accidents

Improved service levels – reduce outages & public complaints

Sustainable solution – long life, low maintenance, reduced waste, etc

Local supply chain and increased local community involvement

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CASE STUDY - Birmingham PPP Contract

Core Investment Programme (Year 1 to 5)

Major Street Lighting Renewal: Remove & replace over 41,000 street lights with LED

Operational Maintenance (Year 1 to 25)

On-going operational maintenance:

Asset Management

Inventory updates

Planned Maintenance

Cyclic works

Periodic Electrical Testing

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Structural Assessments

Outages & Repairs

Emergency Attendance

Energy & Carbon Management

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CASE STUDY - Birmingham PPP Contract

Key Features Of The Lighting Solution

Energy management, control and cost savings

“Harvesting” of energy – e.g. reduce over lighting & energy associated with maintenance factors.

Maintenance benefits from LED strategy & solution (Cost effective over life of contract)

Full flexibility, management & control through the City wide deployment of the CMS

Variable light output & levels using electronic dimmable equipment

High performance optics - high pressure sodium (initially on main traffic routes)

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CASE STUDY - Birmingham PPP Contract

Also LEDs for Major Tunnels & Traffic Routes

Continuous efficient LED lighting

Energy & carbon savings

Full, flexible control & management

Improved driver comfort

Low maintenance solution (long life, robust, reliability benefits….)

Reduced traffic disruption, vehicle related incidents & maintain traffic flow

Improved Road Safety

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CASE STUDY - Birmingham PPP Contract

Comparison

Sky glow

Light pollution

Obtrusive light

Light spill

Inconsistent & Variable (low) uniformity

Variable lighting quality

Improved visibility, light quality, robust service with major energy & carbon savings

Sustainable solution (long life, low maintenance)

Fully flexible responsive lighting system

Low overall circuit power

Improved service levels

Reduced vehicle journeys, lamp & component replacements

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BEFORE AFTER

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CASE STUDY - Birmingham PPP Contract

Surveys

What do Birmingham Residents Think?

Overall very positive feedback

Light level perception improved

Safety perception improved

Light colour and appearance improved

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Conclusion

Carbon savings exceed Government targets for 2035

One of the most advanced lighting solutions in the world

Attracting widespread global interest & publicity

Helping Birmingham on the journey to being a “World Class” City

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6. Other Case Studies

Agenda

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CASE STUDY – Sheffield Highways PPP

Project’s street lighting overview

Maintenance of more than 60,000 street lights

25 year contract

58,000 new street lights with LED

Improved visibility, light quality and service

Remote management system for individual lighting columns

Circa 80% energy savings

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CASE STUDY – Soto del Real (Madrid, Spain)

Project overview

Maintenance of more than 3,000 street lights

20 year contract

3,300 new street lights with LED

Improved visibility, light quality and service

Remote management system for individual lighting columns

Circa 80% energy savings

Tailored website for local community involvement

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CASE STUDY – Torrejón de Ardoz (Madrid, Spain)

Project overview

Maintenance of more than 13,000 street lights and 49 public buildings (50% of total)

20 year contract

4,500 new street lights, 2,500 with LED

Improved visibility, light quality and service

Circa 30% energy savings + 17% cost reductions

Full guarantee with just EUR 5M core investment

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THANK YOU FOR LISTENING

Leo McKenna

Chair, UNECE TOS PPP

International Centre of Excellence and Specialist Centres