Agenda Item No. 13(b)








C207              Street Lighting Energy Reduction Strategy – Salix Application for Loan Funding (NST) (SCRUTINY COMMITTEE – ENVIRONMENT AND REGENERATION) -


Cabinet was advised of the current position with the 'Street Lighting Energy Reduction Strategy' and approval was sought for further measures to support the transition to full LED street lighting.


In order to address increasing street lighting energy costs since 2011/12, Cabinet considered a report entitled 'Street Lighting Energy Reduction Strategy', at its meeting of 20 October, 2014 (Minute C2497 refers). At the meeting it was resolved to implement a full move to LED lighting over time as funding became available, with part-night lighting to be introduced immediately for all appropriate areas of conventional street lighting in the interim. It was identified in the report that this Strategy would provide the Council with the greatest savings, estimated at £371,862.71 per annum in street lighting energy costs and 1,338 tonnes per annum of CO².


The move to part night lighting was implemented between June 2015 and December 2015 throughout the Vale of Glamorgan's local highway network. Whereas, the Cabinet report of October 2014 envisaged that 70% of the Council's conventional street lighting stock at the time could be converted to part-night, following the development of risk assessment criterion and methodology, it only proved possible to part-night 65% of conventional lighting stock equating to some 6,819 units. As a consequence, the projected full year energy cost saving was £217k with a reduction in CO² emissions of 1042 tonnes. Cabinet considered a further report entitled 'Street Lighting Energy Reduction Strategy Update and Next Steps', at its meeting of 25 April, 2016 (Minute C3160 refers). At the meeting it was resolved to agree a strategy to dim existing LED lights at midnight and invest £1.2m in 2016/17 and £100k in 2017/18 and 2018/19 in LED residential street lighting which were also to be dimmed at midnight (Option 3). The payback period for this investment was identified as 7.54 years.


The proposed project to dim LED lights at midnight and convert all residential street lighting to LED (Option 3) was nearing the installation stage. The project involved the conversion of a total of 6,277 conventional street lanterns to LED in residential streets comprising of some 5,366 standard lanterns and a further 911 ornamental or decorative street lighting lantern units. A detailed and robust procurement for the new LED lanterns was progressed during financial year 2016/17 with the successful supplier appointed in April 2017. In order to address ongoing issues in relation to the colour temperature of the new LED lanterns a trial installation was subsequently planned in July 2017 of two variants of the LED lantern with different levels of blue light, i.e. cool white or warm white light, to establish which was the most visually advantageous to install.


The trial and consultation in the Pencoedtre area for two types of LED lantern was extended to the end of August 2017 to allow residents adequate time to observe the lighting and respond to the questionnaire. Following completion of the trial, the Council received only four responses from some 20 households who were asked to take part along each street involved, however, the majority of respondents identified a preference for neutral white colour temperature of the LED lanterns. This low response rate was attributed to the fact that residents likely recognised that LED lanterns, which were exempt from part-night lighting, offered a significant benefit over street lights being turned off between midnight and 6am under part-night lighting. The neutral white LED lantern was also consistent with previous LED lanterns that had been installed throughout various areas of the Vale and was considered to offer better colour rendition within the street scene as well as providing optimum energy savings and reduced CO² emissions.


The procurement process for appointing a suitable contractor to install the new LED units had concluded and the contract was due to be awarded before the end of January 2018. This would enable the Council to proceed with the move to full LED throughout all residential areas in accordance with the Council's previously agreed Street Lighting Energy Reduction Strategy, using the neutral white LED lanterns with dimming to 50%, between 12 p.m. and 6 a.m. which would create a significant improvement in the quality of light in residential areas. A detailed installation programme was being developed with the successful installation contractor and would be distributed to all Ward Members to advise of the installation schedule, which was planned to be undertaken from February 2018 through to May 2018.


The financial challenges for the Council associated with maintaining street lighting infrastructure in the future remained a concern with some 4,570 street lighting lanterns on main roads representing close to 30% of the Council's lighting stock remaining as old style high energy usage street lighting units. Whilst some 2,022 of these street lights were be subject to energy savings from part-night lighting, the number of old style high energy use lanterns would continue to add to the financial burden of the Council in future years unless measures were identified to fund the future replacement of these units to complete the conversion of all street lighting within the Vale of Glamorgan's local highway network to LED.


The Council did not however have sufficient funds to implement conversion of the remaining main road lanterns to LED in the short to medium term and the need to maintain progress in street lighting cost savings was imperative given the potential increase in street lighting energy prices. Therefore alternative options for funding full LED lighting arrangements to achieve the necessary energy and maintenance efficiency improvements had been under consideration for some time.


Welsh Government was working with Salix Finance Ltd to provide interest-free loans for energy efficiency projects in the public sector. Loans were provided for energy efficiency measures, subject to meeting certain lending criteria, which included maximum payback periods for projects. The closing date for the next round of applications for this funding was 16 March, 2018 though Welsh Government officers have indicated that a funding application prior to the end of January 2018 would be preferential to ensure the best opportunity of success in the forthcoming funding round.


The Council submitted an expression of interest to Salix Finance Ltd on 20 September, 2017 to seek funding to replace an estimated 4,728 existing street lighting lanterns with LED lanterns on main roads under the abovementioned funding proposals with no commitment on the Council to submit a formal application. At the time of submission, this represented the estimate of the remaining street lights within the Council that were not already being converted to LED. The project figures for capital investment were estimated at £3.74m and the project was to be delivered over a 2 year period with provisional completion in February 2020. The expression of interest also included the replacement of some 610 'end of life' street lighting columns on main roads to safely accommodate new LED lanterns, and the installation of a Central Management System (CMS) to enhance dimming regimes further improving energy efficiency savings associated with the proposal. The expression of interest identified the intention to submit a formal application by 31 January, 2018 to allow further refinement of the business case and accurately determine lantern, CMS and replacement columns costs within the whole project package.


Two business case options to support a proposed bid for funding to Welsh Government via Salix Finance Ltd had been developed and were detailed in the report. Both Options 1 and 2 were shown, for illustration purposes, to have the same energy and CO² savings, however in practice this would not be the case as, Option 1, which incorporated the CMS system, was of significant future benefit to the management and maintenance of the street lighting infrastructure and would assist in making further energy savings by allowing remote access to vary the dimming options / lighting levels as required by the service, with the possibility of dimming levels greater than those shown for certain locations. The CMS system would also reduce the costs associated with ongoing management of the system which would otherwise have had to be met by the authority.


This was a matter for Executive decision


Cabinet, having considered the report and all the issues and implications contained therein




(1)       T H A T the current position with the 'Street Lighting Energy Reduction Strategy' be noted, and approval be granted for the submission of an interest free loan application to Salix Finance Ltd. for funding to convert main road lighting to LED with a Central Management System (CMS), as outlined in Option 1 of the report.


(2)       …………….


(3)       …………….


(4)       …………….


(5)       …………….


(6)       T H A T for resolution 1 above, the use of Article 14.14 of the Council's Constitution (urgent decision procedure) be authorised.


Reasons for decisions


(1)       To obtain agreement on the current position of the street lighting energy reduction strategy and obtain authority to submit a bid to Salix Finance Ltd for future funding.


(2)       …………….


(3)       …………….


(4)       …………….


(5)       …………….


(6)       To meet the funding application deadline of 31 January, 2018.