Less than 5 years instead of 7: energy service contracts in street lighting successfully completed ahead of schedule

The first energy service contracts to replace street lighting were signed in 2015. But they all continued in different ways. Today, contracts have already been completed early in some cities.

The first project on that list was a project in Kovrov, Vladimir Oblast, by Lighting Technologies ESCO. The final acceptance certificate was signed in March 2019 for the contract ending on December 31, 2022. Instead of seven years, the contract savings were achieved in four and a half years. The contractor pulled out of the project, and the city gets the full savings two and a half years early.

The contract value exceeded 65 million rubles. The contractor invested this amount by replacing more than 3.5 thousand lighting fixtures at their own expense and installing an outdoor lighting control and commercial metering system. While the target savings were 60%, the actual value reached 68.59%.

Another project was carried out in Aleksandrov. The acceptance certificate was signed in June 2020 instead of August 2020 as planned, with the savings meeting the target of 70.71%. Over 2 thousand lighting fixtures were replaced, and the lighting control system was deployed—for the total cost of over 60 million rubles.

Last but not least, the third city in Vladimir Oblast and in Lighting Technologies ESCO's portfolio, where the contract was complete due to early achievement of the target savings value, is Gus-Khrustalny. Instead of November 2022, the acceptance certificate was signed in February 2020. The average savings reached 67.2% with the target value of 60%. Investments totaled more than 40 million rubles, making it possible to replace almost 2,300 lighting fixtures and deploy a control system.

A series of factors helped the company complete the contract early:

·         High-quality, power-efficient, and reliable equipment with stable properties

·         Competent lighting and economic calculations to ensure high illumination with compliance with all standards and predictable savings

·         Growing electricity pricing

With that, fixtures have been working properly all these years. Annual illumination measurements proved zero change of parameters, while the warranty will continue for another three years.

"Some ESCOs wait for a contract to expire to get paid for the savings further—by increasing the electricity price above the contract price. We do things differently. We only return our investment within the stated price. However, we don't leave the site and the customer: instead, we continue to deliver on our obligations," says Aleksey Anikin, CEO of Lighting Technologies ESCO.

Following the first cities that successfully completed energy service projects, we can expect to see more in the future. Over the past time, Anapa, Nevinnomyssk, Ivanovo, Kursk, Smolensk, and other cities received modern urban lighting, and high-quality and safe lighting environment on the streets.