Incentivizing the adoption of LED lighting by US cities and utilities

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7 October 2016

NEW YORK: As part of this year’s Climate Week NYC, The Climate Group hosted two key events on September 22 to assess the main challenges to the adoption of light emitting diode (LED) street lighting as identified through our ongoing Global LED Consultation.

Following a morning session that explored the issue of financing LED street lighting in developing countries, the afternoon focused on driving the adoption of LED lighting by US cities and utilities as part of The Climate Group’s LED scale-up program.

The eighth annual Climate Week NYC was convened by The Climate Group from September 19-25 and the issue of how to accelerate the adoption of energy efficient LED lighting globally was a central topic throughout the week.

Implementing the Paris Agreement

LED lighting has been recognized as a key technology to focus on over the next decade following the ambitious climate targets set out in the Paris Agreement in December.

LEDs have the potential to achieve energy savings of between 50-70% and have been recognized as a leading technology ready for implementation at scale as we transition to a low carbon global economy in the wake of the historic climate deal.

A special event hosted by Philips Lighting and the World Green Building Council on the opening day of Climate Week NYC - RAISING THE STANDARD – a High-Level Progress Review and Call to Action on Buildings and Renovation - highlighted the urgency of adopting LED lighting systems and Bill Bien, Head of Strategy, Philips Lighting, emphasized the role of LEDs in driving down global emissions and delivering better quality lighting to citizens around the world. He also reaffirmed The Climate Group’s call to action for all street lighting around the world to be LEDs (or as energy efficient) by 2025.

Number one technology

From The Climate Group’s Global LED Consultation, it is clear that the vast majority of cities around the world want to adopt LEDs and benefit from the energy savings. In the US in particular, a survey carried out in 2016 revealed that US city mayors consider LED lighting as the number one technology to implement to meet their commitments on reducing carbon emissions over the coming two years. However, the survey also reveals that when it comes to street lighting, issues around complex asset ownership of the lights remains a major challenge to adoption in the US. Statistics reveal that up to 60% of lights in the US are wholly or partly owned by investor owned utilities who may have little incentive to switch.

To address this particular issue, The Climate Group convened a roundtable focused on the challenges around the complex ownership of lighting assets in the US. Participants included a wide range of stakeholders from city representatives, utilities, regulators, Public Utilities Commissioners as well as lighting manufacturers.

Building on last year’s call to action at Climate Week NYC 2015, where The Climate Group urged all utilities and cities in the US to explore the benefits of LED lighting by the end of 2016, the event this year looked at the progress made towards the 2016 target and showcased successful examples, how these have been achieved and how they can be replicated elsewhere.

Amy Davidsen, Executive Director North America, The Climate Group, opened the roundtable highlighting how LEDs can potentially halve electricity consumption from lighting and is a solution that risks staying on the shelf if key stakeholders do not acknowledge the benefits of adoption. It is therefore vital to find solutions from which cities, utilities and consumers can all benefit from LED lighting upgrades. In her opening remarks, Amy Davidsen emphasized how the discussion convened by The Climate Group was therefore particularly timely and vital in bringing key stakeholders together to discuss strategies to drive LED adoption in the US.

Progressive cities

Examples of progressive cities included Los Angeles which has replaced over 140,000 fixtures with LEDs and is now saving 63% in their energy bills whilst reducing emissions by over 47,000 tons CO2 per year. New York City is also currently replacing 250,000 street lighting with LEDs. The upgrade, which is due for completion by 2017, will result in savings of approximately US$6 million in energy bills and US$8 million in maintenance annually.

Despite a growing number of successful case studies from progressive states and utilities in Vermont, New York and California, challenges remain around stranded lighting assets which are linked to the value of the lighting system in place prior to the upgrade and can play a key role in discussions around the tariff of the electricity consumed after switching to LED sources. Understanding the monetary value of any existing lighting assets and finding ways to compensate utilities for monetary loss from the upgrade is critical. Options have been discussed by which the savings from LED lighting are not entirely passed on to the consumer at the time of the upgrade but phased to help utilities recoup the cost of investment. Other barriers identified are linked to finding alternative ways to make use of any spare generating capacity at night which may include storage options.

Civil society has been identified as potentially being able to play a key role by demanding directly that utilities consider adopting LEDs and initiating conversations over fair tariffs for both parts. Such bottom-up initiatives could act as a trigger for broader conversations between utilities and the public and lead to solutions that benefit both utilities and consumers.

Peter Curley, Program Manager of the Led scale-up program, The Climate Group said: “Climate Week NYC provides an excellent forum to bring together key US stakeholders to discuss the challenges around adoption of energy efficient technologies such as LEDs. The adoption of energy efficient solutions and who ultimately pays for them can represent a key challenge for cities and utilities exploring infrastructure upgrades, and mutually beneficial solutions and new approaches to lighting LED tariff setting are needed to address stranded assets, and share savings so all stakeholders see benefit.”

by Arianna Tozzi

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