Streetlighting Contestability Victoria’s Experience Victor Waveluk

The Sustainable Energy Authority Of Victoria Statutory semi-government body Objectives are to: facilitate energy efficiency and the development and use of renewable energy achieve environmental and economic benefits for the Victorian community contribute to the reduction of Greenhouse gas emissions

Genesis / Lightlab Report “Energy & Cost Savings Opportunities In Streetlighting” – August 1999 Commissioned by SEAV and SEDA Technological options available Conclusion: astronomical scope for improvement

Report Key Findings Illumination quality (light colour and useful light) is much lower than can be achieved Low energy efficiency Consumption can be at least halved!

Report Key Findings (cont.) More efficient lamps (eg mercury vapour Vs metal halide and modern fluoro’s) More effective lanterns (eg reflector design, diffuser losses, better light distribution) More efficient ballasts (eg electronic) Better control of on/off times (eg PE cells rather than cadmium sulphide cells) Better application of light types (depreciation and programmed lamp replacement)

Case Study 80W mercury vapour Vs 35W metal halide 60% reduction in energy use 74% return on initial premium (takes into account equipment life, efficacy, electronic ballast, depreciation and PE cell)

3 Distinct Types of Public Lighting Services Supply of Electricity - fully contestable -Constitutes approx 30% of bundled price Use of Distribution System (DUoS) - regulated Ongoing operation, maintenance and replacement (OMR) – regulated if owned by DB, fully contestable if owned by council (ie new installations)

Major Issues to Overcome Bundled tariff – price fixed, is not transparent, not cost reflective Which components are contestable and to what extent Audits of lights - inventory Non-standard lighting installations How to treat unmetered supplies Who owns infrastucture

Public Lighting Reference Group Responsible for the development of the new public lighting framework Convened by ORG as a result of lobbying by SEAV and MAV Comprises DB’s/retailers, MAV, VicRoads, SEAV and DNRE

Market Preparation Inventory (No., type, location, infrastructure?) Ownership (contest?) Cost of Public Lighting ($ pa, billing history, capital contributions) OMR service levels (design, efficiency, maintenance, replacement time/strategy, records, data up-dating)

Market Preparation (cont.) New lighting schemes (design std, service levels, performance measures) Market knowledge (other providers apart from DB’s) Nature of contract for energy and/or OMR issues

Public Lighting Code Released Sept 2001 by ORG Facilitates the negotiation of Public Lighting services Obliges a DB to make “fair and reasonable” offers Specifies minimum service standards Only applies to monopoly DB’s Free to depart from Code by negotiation

Public Lighting Code - Shortcomings Does not “drive” energy efficiency & innovation Sets minimum standards only No environmental considerations Does not allow for equipment selection

Opportunities Capex premium for energy efficient lights is small and justified by very high returns Upgrade cost low because most Vic/NSW minor road lights are due for replacement now or next 3 years

Buying Options Single council (all contracts for all energy with one supplier) Joint tender – individual contracts (group of councils) Cooperative – joint venture (one contract for all councils) Broker (negotiates on behalf of councils; councils have principal agreement with broker)

Information Day - MAV 1 August 2001; energy charges only - not OMR “Energy Brokers” invited by MAV Maps, Trans-Tasman, Energetics, NUS and UMG Maps & Trans-Tasman: “no obligation” public tender Maps (Energex): 53, TT (Citipower): 17 out of 78 50% savings ($60/MWh peak, $30/MWh off-peak

Information Day - Outcomes Total streetlighting load: 250MW 25% purchased as Green Power and growing $30/MWh Green Power premium Reinvestment of savings Dandenong 100%, Manningham 50%, Geelong 35%, Melbourne 30%

MAV Survey 2001 - General 78 Vic councils; 73 responded Total council PL expenditure $40M Average expenditure $0.5M 1.1% of annual budget Councils with PL policy: 36%

MAV Survey – Retail Contestability 100% entered contestable market 89% purchased through buying group 44% based on “Information Day” 97% satisfied with buying group offer 20% average savings, $120Kpa, 3%-40%

MAV Survey - Greenpower 4% of respondents bought Greenpower prior to purchase Increase to 40% after purchase Average Greenpower purchased: 19% (3.5% - 100%)

Inventory - Consumption Inventory Working Group established by ORG Needed to “unbundle” energy consumption of light fittings from OMR components = Load Table Historical SECV research and further tests by NATA lab Accepted by Metrology Coordinator – Policy Division of DNRE

Inventory - Infrastructutre No. of lights Location of lights Type of lights Type of asset on which lights are fixed All of the above are critical

Suggested Actions Develop guidelines and a recommended process for councils Prepare info for councils from which to negotiate with DB’s Identify purchasing options available to councils Identify buying groups Prepare detailed spec ie data format, services, billing terms, etc.

Suggested Actions (cont.) Develop purchasing strategy for all new installations Consider contract duration (eg 2 yrs + 2yrs at council discretion)

Field Trials Necessary for the development of a “Technical” Code Nationally coordinated approach is needed Trials to cover: type of area serve, lamp height, lamp/luminare type, lamp spacing, lighting levels, area specific issues

Field Trials – Expected Outcomes Lighting set-ups measured, monitored and analysed for: light output, lighting effectiveness, energy efficiency, running/capital cost Generation of model specification

Issues to Consider The capacity of councils to choose and specify non-standard fittings Ownership of assets if councils pay capital costs Ensure no barriers to the provision and increase of energy efficient PL Promote regulatory and competitive regime which fosters innovation