Are Councils and Distribution Businesses Like a Married Couple?
The who’s who of lighting gathered again for the third Annual Australian Smart Lighting Summit 2015 on 8th and 9th September 2015 in Melbourne. As always, the line-up was strong with representatives from lighting suppliers, manufacturers, roads authorities, councils, state government and distribution businesses.
This year’s speakers include Victorian Minister for Energy and Resources, The Hon. Lily D’Ambrosio, City of Melbourne’s Ian Dryden, Ironbark’s Paul Brown and CEO or the Lighting Council Australia, Bryan Douglas.
Light in Motion
Bruce Rasmus's presentation on "Light in Motion" made the connection between rock n roll and LED lighting with images and video from U2, the Sydney Vivid festival, and the Digital Wall in Sydney demonstrating all of the possibilities of LED. Bruce discussed the balance between lighting for public spaces, livable spaces and light pollution and explored the interactive Lumimous building in Sydney, stating, "this is fun, this is playful, this is what our cities can be like".
We heard from Paul McCartney from the Clean Energy Finance Corporation (CEFC) talking about Financing Strategies for Streetlight LED Retrofits. It was great to get an update on financing options, leasing, performance contracting and Public Private Partnership (PPP) models from an organisation that has been brilliant for councils in demonstrating how lighting projects can be financed. Since their days as Low Carbon Australia (LCA), the CEFC has shown the way and have really put financing for street lighting projects on the map for councils.
Council Projects Galore
The local government presence was stronger than it has ever been with presentations from councils on Lighting the Regions, Watts Working Better and the Great South Coast Street Smart Lighting Programs. These three projects alone represent the changing of 44,000 street lights.
There were also presentations from the City of the Sydney and the Goldfields Voluntary Regional Organisation of Councils (GVROC) and it was fascinating to hear the common threads and challenges such as how to manage and line up the timing of dozens of council budgets, plans and preparation.
According to Tom Brown from the Goulburn Broken Greenhouse Alliance (GBGA), "one of the keys to a successful outcome was careful procurement. When we evaluated the tenders for materials, installers and project managers it wasn’t too highly weighted around price. It was based around experience, qualifications and quality. Quality was key and we subsequently got quality outcomes".
Another standout was the community and social enterprise component of the Watts Working Better which involves working with members of the community who were otherwise socially isolated. For example, the recycling of old lights with ConnectGV.
Councils and Distribution Business Are Married
The panel discussion on Implementing Energy Efficiency was facilitated by our very own Paul Brown who was joined by Philip Hewitt from the City of Charles Sturt, Noel Twyman from CitiPower/Powercor and Craig Marschall from Trans Tasman Electricity (TTEG).
The panel looked at the energy efficiency projects that have been completed (around 10% of Australia's street lights have now been changed over) and what was to come. From the Distribution Network Service Provider (DNSP) viewpoint, Noel explained that the reason Powercor were the first Australian council to implement bulk LED changeovers (Warrnambool was the first) was because customers asked for it. He stated, "there had been an eagerness from councils as customers to install LEDs and reduce costs and that's been the key driver".
Noel was asked about how street lights were approved for use on the Powercor network, an area of confusion for many lighting suppliers who are new to the Australian market. He confirmed that, "in Victoria we invite tenders for the approval of fittings and we’ve recently gone to the market for standard (and decorative) LEDs based on a specification released earlier in the year. We could be looking at 2, 3 or 4 manufacturers and we'll negotiate with the manufacturers to ensure we get the best price for ourselves and for councils". So watch this space.
Philip reflected on the experience of South Australian councils and how councils had been trying to engage with SAPN (formally ETSA Utilities) since 1998 with few results. Councils and SAPN are currently in mediation to determine SLUOS prices for the 2010-2015 period and beyond. He said, "we're still trying to resolve that... a lot of opportunities have been missed" however a group of councils including Charles Sturt "got together in 2013 to undertake a project to look at the benefits of LEDs in the state. We focused on cost savings, energy savings, reduction in emissions, improving public value and sharing the knowledge". He said, "the relationships councils have with SAPN has improved in the last 12 months" and they wanted a group of councils to take the next step and be involved in the first LED bulk changeover in SA.
The issues around conflict in managing hundreds of millions of dollars of projects was then addressed by the panel. This was a controversial topic and did not disappoint. Craig was asked about TTEG's advice of urging councils to argue with the DNSPs over pricing.
TTEG are a somewhat controversial organisation in Local Government land and have even actively attempted to prevent energy efficient street lighting projects from proceeding. They have been involved in challenging the Regulator at the Australian Competition Tribunal and councils, after being charged hundreds of thousands of dollars in legal and consultant bills, were told "you have failed to make out any of the grounds for review".
Given the success of consultative approaches (i.e. the hundreds of millions saved for councils through energy efficiency projects), Craig was asked if he would change his approach. Craig’s response was that "he wouldn’t consider it arguing" and that "as customers, councils haven’t done enough".
Phil had a different take stating that, "councils and network providers are always going to be married to each other. You can’t avoid that. There’s a time and a place for a more adversarial approach but collaboration is required to get things done". Phil said, "councils need to be a little more mature in my state... we aren't doing as well as we possibly could when we're dealing with power authorities, however things are improving".
Paul summed up the balancing act that councils have to play stating "there's a time for carrots and a time for sticks but at the end of the day nothing has been achieved without a collaborative approach. No projects. No benefits. It's hard to argue and collaborate at the same time in your own head so write a list of all the things you want to achieve and then note what requires collaboration and what requires dispute. There's a legitimate role for both but if you let argument rule the day you don't replace 2.3 million street lights throughout the country."
A Word from Tassie and a Nightmare Tale
Darryl Munro from TasNetworks talked about the Hobart and Glenorchy LED project that has faced its share of challenges over the last 2 years. Implementation started slowly and one of the big challenges is that technology changes so quickly. This slow pace ended up as an opportunity with the technology finally installed being more efficient than what was initially planned.
Darryl also discussed the challenges in different jurisdictions, explaining that "in Tasmania we have a negotiated service between councils and the distribution business. I’ll just say one word: Nightmare". A timely reminder for councils who recently dodged a bullet in Victoria around negotiated service. The idea was scrapped due to substantial concerns raised by Victorian councils and the potential for unforeseen circumstances that would result in councils being worse-off.
It looks like some of these predictions have come home to roost in Tasmania.