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Public Lighting

Public lighting is a key service provided by public authorities at the local and municipal level. However, many public lighting networks are outdated and inefficient. For municipalities which have outdated systems, street lighting can account for as much as 30 to 50 percent of their entire power consumption.

Modern public lighting systems have a host of benefits:

  • enhanced road traffic safety
  • improved nighttime visibility, resulting in decreased criminal activity and an improved sense of security among citizens
  • increased productivity due to a rise in legitimate activity after dusk, and a longer workday that allows people to travel safely at later times
  • a reduction (sometimes drastic) in cost due to reduced electricity consumption resulting from energy efficient technology
  • an effective and highly visible way for municipal governments to show commitment to their constituents

Public lighting projects have been effectively delivered through public-private partnerships over the past few years. Through the PPP, government contracts a private provider for the service—light—as opposed to an asset—the luminaire itself.  

Issues

  • PPP contract bundling

    A public lighting PPP bundles together:

    • the decision of the most appropriate technology;
    • the purchase and installation of the energy efficient lamps and brackets;
    • in some projects, the installation of the posts (although in many, the project...

    A public lighting PPP bundles together:

    • the decision of the most appropriate technology;
    • the purchase and installation of the energy efficient lamps and brackets;
    • in some projects, the installation of the posts (although in many, the project uses existing post infrastructure);
    • the routine (keeping the lamps clean and ensuring they aren’t encumbered by foliage) and unscheduled maintenance of the lamps; and

    the use of modern maintenance management system to identify and manage assets and well-designed processes, like public call centers, to ensure responsiveness to customer complaints.

  • Financial impacts

    With rising energy prices, and for municipalities where energy costs are not subsided nationally, energy efficient public lighting generates cost savings. The savings from efficient lighting depend on the technology being replaced (replacing...

    With rising energy prices, and for municipalities where energy costs are not subsided nationally, energy efficient public lighting generates cost savings. The savings from efficient lighting depend on the technology being replaced (replacing older technology such as high-pressure mercury results in the highest savings) and the related reduction of energy used, and the efficiencies gained from preventative maintenance. The majority of the cost of a public lighting network results from operations and not from the investment itself. The total cost of a typical public lighting installation over a period of 25 years is split approximately as follows: 85 percent maintenance/operation (including power supply) and 15 percent capital cost.

    A striking example from Europe shows that, according to estimates made by Philips, Europe could save EUR 3 billion in energy costs per year by switching from old to new street lighting technology: energy savings equivalent to 45 million barrels of oil or 11 million tons of emitted CO2. McKinsey has estimated that a city of one million inhabitants, which contracts the supply and maintenance of LED public lighting to a third party, could generate energy savings of around 22 percent.

  • Technology issues

    Technological upgrades reduce energy usage (and therefore cost), and those savings can cover the cost of the installation and maintenance of the new equipment. This depends on the starting price of energy: in markets where energy is highly...

    Technological upgrades reduce energy usage (and therefore cost), and those savings can cover the cost of the installation and maintenance of the new equipment. This depends on the starting price of energy: in markets where energy is highly subsidized, the same benefits may not apply.

    Much of the world’s public lighting is generations old, even in the developed world. This means that the potential for energy efficient improvements is substantial. In Europe for example, about 32 percent of public lighting remains at the 1930s standard.

    Older technologies such as high-pressure mercury or metal halide bulbs, do not match the capabilities of LED and other more advanced options. In older technology incandescent bulbs, 90 percent of the energy consumed goes into producing heat and only 10 percent goes into light. In contrast to a conventional 100-watt incandescent light bulb, which generates visible light at around 17 lumens per watt, compact fluorescent light bulbs can generate 60 to 75 lumens per watt and LED bulbs more than 100 lumens per watt. LED also has a long service life, three to five times longer than conventional lighting technology.

    Since the majority of costs related to public lighting accumulate during the operational period, the longer expected service life means LED’s higher upfront cost can become more economic than those of the shorter-lived compact fluorescent lights.

    Intelligent control systems can create additional savings as the lighting level can be adjusted depending on the time of day and other requirements, contrary to traditional systems that only enable lights to be either on or off. 

Tools & Guidance

    • 2013
    • Government of Scotland

    Street Lighting Toolkit

    How to assess the impact of anenergy efficiency investment in the street lighting asset

    This Toolkit and the two accompanying business cases have been developed to assist Local Authorities to assess the impact of investing in energy efficiency measures within their street lighting asset. It covers measures such as LED lighting, control systems and the use of dimming and trimming. It is designed as an initial feasibility assessment i.e. a pre-business case tool. The Toolkit has been developed with technical expertise provided by Ove Arup & Partners and in consultation with the SCOTS street lighting team. It has focussed on upgrading to LED street lights however there are alternative technologies which can also be considered as part of a business case study

    • 2015
    • World Bank Group (WBG)

    India: Energy-Efficient Street Lighting

    Implementation and Financing Solutions

    There has been a clear need for energy-efficient technologies that could be applicable in the municipal street lighting sector. This manual is written with the objective of supporting the preparation and implementation of street lighting projects in India, using performance contracting and other Public Private Partnership-based delivery approaches. This manual draws upon global best practices, including practices that have been tried and proposed within India and South Asia; and draws from their failures and successes to document the major lessons learned. The manual should be useful for its readers for assessing options and developing practical solutions for scaling up the implementation of large street lighting programs in cities...

    • 2013
    • Price Waterhouse Coopers (PWC)

    LED street lighting

    Climate Group Document - Financial Section

    In the past the lack of available funding to cover the initial costs of converting to LED technology has been a significant barrier to starting sizable projects. However, in many regions the range of options for obtaining the necessary finance has increased. There has been a greater focus from central governments on the need to implement projects that both reduce greenhouse gas emissions and lead to urban regeneration, which has led to new sources of government funding. In addition, structures involving private finance, including potentially from energy companies or LED equipment manufacturers, have further developed.

Projects & Case Studies

    • 2013
    • World Bank Group (WBG)

    India: Bhubaneswar Street Lighting

    PPP Brief

    Street lighting infrastructure in Bhubaneswar, the capital of the Indian state of Odisha, is outdated, inefficient, and in poor condition. As a result, the city’s municipal authority, the Bhubaneswar Municipal Corporation, asked for IFC’s assistance to design and structure a PPP transaction, and manage the tender process to identify a qualified private sector partner to upgrade and manage the street lighting system. The transaction was conclude on October 5, 2013.

    • 2014
    • World Bank Group (WBG)

    India: Rajasthan Public Street Lighting

    PPP Brief

    Jaipur Municipal Corporation (JMC) operates and maintains over 100,000 public street lights within the city. However, the public lights system was facing problems owing to old, energy-intensive technology and a lack of capacity to operate such a large network. Under the umbrella of a Knowledge Partnership between the Government of Rajasthan and IFC, JMC engaged IFC as the transaction advisor to structure a PPP for financing, upgrading, operating and maintaining the public lights system in Jaipur. As a result, a consortium led by a large Indian energy services company and manufacturer of LED lightswon the bid for a 10-year energy performance contract. The agreement was signed in December 2014.

Lessons & Analysis

    • 2013
    • European PPP Expertise Centre (EPEC), European Investment Bank (EIB)

    Energy Efficient Street Lighting

    Energy efficiency (EE) is at the heart of the EU’s transition to a resource-efficient economy and the realisation of its 2020 strategy for smart, sustainable and inclusive growth. This includes three complementary energy and climate headline targets by 2020: to lower greenhouse gas emissions by 20% relative to 1990, to generate 20% of primary energy from renewable sources and to achieve 20% primary energy savings relative to the 2007 projections for 2020. One key area for investment in EE is street lighting, where there are not only major opportunities to significantly reduce electricity consumption, but also additional benefits associated with phasing out environmentally harmful technologies, reducing maintenance costs and achieving...

    • 2014
    • PPIAF

    Improving Energy Efficiency in Street Lighting in Brazilian Cities

    PPIAF, in partnership with The World Bank and The Energy Sector Management Assistance Program (ESMAP), recently undertook a viability study for investments in energy efficiency in the public street lighting sector of Rio de Janeiro and Belo Horizonte. These studies looked at the existing institutional and regulatory arrangements for the public street lighting sector in Brazil. The study identified enormous opportunity for investment in energy efficient public street lighting in Brazilian cities, consistent with current global trends. The study also revealed a number of systemic changes happening in the policy and market landscape in the Brazilian public street lighting sector making it particularly attractive for energy efficiency...

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