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Intelligent Street Lighting

WSP Environment & Energy has collaborated with Lund University in Sweden on a degree project that reveals that the average Swedish municipality, with 50,000 inhabitants, could save around SEK 4 million per year by investing in new 'intelligent' street lighting.

The degree project is by Simon Engdahl and Petter Karle, who have been studying on the Technology Management course at Lund University.  Daniel Svensson of WSP has been supervising the degree project.  Daniel brings particular commercial expertise to the study as he leads WSPs delivery of an Energy Performance Contracting service and helps companies, municipalities and regional authorities achieve energy savings from buildings.

The cost of street lighting

The basic premise is that new 'intelligent' street lighting will pay for itself and enable municipalities to become safer and more energy efficient, saving money as a consequence.

The study at Lund University declares that one street light costs between SEK 250 and 1600 per year at current prices, depending on its efficiency.  According to Ljuskultur, the Swedish information facility for the lighting industry, there are around 2 million road and street lights in Sweden, with an average cost of SEK 450 for the energy alone.  On top of that is the cost of operation and maintenance.

According to various sources, up to 50% of Sweden's street lighting uses older mercury fittings, which consume more energy, are more expensive to operate and maintain and give off less light compared to high-pressure sodium fittings, for example.  Just updating these lights would represent a major advance.  Grästorp Municipality, for example, has replaced the majority of its street lights with more energy-efficient high-pressure sodium fittings and has reduced its energy costs by over 50%.

The concept of 'intelligent' lighting

In the City of Gothenburg, a new kind of 'intelligent' street lighting has been tested, which can be controlled using wireless communication.  

The system automatically reacts to external factors, such as traffic density, road conditions and the weather.  For example, the level of lighting can be increased when there are a lot of cars travelling on a specific stretch of road.  It is also possible to dim the lighting at night when fewer cars or other road users are on the roads.  This new technology is highly energy-efficient and therefore also cost-efficient as it provides light when and where it is needed most.

Lund Municipality, one of five municipalities studied as part of the degree project, has 18,500 lights. If these lights were all replaced with the same technology used in Gothenburg, the municipality would be able to save almost SEK 140 million over a 20-year period with a repayment period of around nine years.  The investment would cost around SEK 60 million.

The degree project, in collaboration with WSP, also applied the same calculation to the whole of Sweden, which has around 2 million lights.  This revealed that for an investment of around SEK 6 billion, the saving could be in the region of SEK 16 billion!  

Aside from the major financial savings, there are also environmental benefits.  Carbon dioxide emissions would be reduced by around 5 million tonnes, which is equivalent to taking more than 1 million cars off Sweden's roads.

The cost / benefit challenge

With such obvious potential, why are not more Swedish municipalities replacing their street lighting?

According to interviews with municipal officials, the view is that the investment funds required are not available.  The degree project has examined this and believes that this is a weak argument, but believes the problem is instead a short-term investment horizon resulting from the fear of financial risk that an investment of this size entails.

In addition, the municipalities that Simon Engdahl and Petter Karle studied believe that an investment of this volume cannot be made without affecting the year one income statement, which would be in breach of the requirement for a balanced budget.  However, with WSP's support, Engdahl and Karle have shown that there are business models which the municipalities could apply that show that these factors need not be an obstacle to carrying out this kind of investment.

Energy Performance Contracting

Energy Performance Contracting (EPC) is one such model.  In simple terms, the business model works on the basis of the customer (the municipality) purchasing a function, such as the compliance of the street lighting with standards and laws applicable to the street lighting, such as lux/m².  The purchase is for a turnkey contract, which includes project management, implementation and follow-up.  The contractor undertaking to install the new equipment guarantees a certain level of energy saving over a specified period, but only if this exceeds the capital costs of the investment.  This means that the municipality's income statement is not affected.

If the company does not succeed in reducing the energy consumption as specified in the contract, a penalty is imposed corresponding to the shortfall in energy saving and the financial risk is therefore transferred in its entirety to the contractor.  The result is that municipalities can extend their investment horizon.

Further information

You can read more about Energy Performance Contracting at: www.epec.se 
Contact Daniel Svensson:  daniel.svensson@wspgroup.se