1. Segments within the Roads Sector suitable for LED Street lighting
When we talk of Streetlights, we essentially include the following sub-segments under Street lighting which account for over 90% of Street lighting in India. The remaining 10% uncovered segment would be the Rural Roads, which in all probabilities will be only conventional Lighting and has no potential for LEDification in the Near to Mid-term. The key focus segments are:
- All City / Urban Roads
- National Highways
- NH Expressways
- NH Bridges
- NH Toll Plaza
- And State Highways
The most common form of Lighting in National & State Highway projects are the High Pressure Sodium Vapour Lamps and Metal Halide Lamps.
While in City / Urban Roads, the usage of multiple varieties of Street lighting is in progress – HPSV, Metal Halides, Tube Lights (40 W), CFL’s and most recently LED is gaining importance.
So broadly, the opportunity for LED Lighting in the Roads segments seems to be largely from the City Roads / Urban Roads segments in India.
Urban City Roads Segment is the most complex of all and it has the highest potential for LED Street lighting in India. The below sections details out the various routes in which Street Lighting is done in India.
2. City Roads Street Lighting in India – the background:
The City / Urban Roads lighting is the main responsibility of the local government body – the Municipal Corporations or Urban Local Bodies (ULB’s). There are 269 such bodies in India.
The Electricity Department in most of these bodies undertakes the Lighting responsibility.
Earlier (5 years back), the MC/ULB’s used to undertake the complete responsibility of setting up Street lighting and taking care of its maintenance in India. The local electricity utility (mainly government owned) used to subsidize power supply to these bodies.
As the power consumption grew for Public Lighting, there was an increasing awareness on the electricity efficiency side of the business and Public Lighting was considered as one major area for immediate action.
As per the 18th Electric Power Survey of CEA, the estimated energy consumption in Indian public lighting sector with 2009-10 as the base year is about 8478 million KWh in 2012-13. The sector will grow at a CAGR of 7% during the XII and XIII plan periods.
Seeing this growing trend, the Ministry of Power, through its energy efficiency body – Bureau of Energy Efficiency (BEE) started looking at this sector in detail and helped the MC’s and ULB’s to improve the energy efficiency here.
During the 11th five-year plan (2007-12), through detailed energy audits, BEE supported DPR development for 134 municipalities across the country. In addition, the BEE programme helped enhance the understanding of the opportunity among various Municipal Administrations. This enabled MCs to use DPRs and implement projects on ESCO (Energy Services Company) mode at no budgeted investment. The accrued savings were expected to pay for the investments made by the ESCO.
However, this model did not work during the 2008-2012 period for various reasons given below and the MC’s & ULB’s were unable to get good ESCO’s to partner with them.
Then, came the new initiative by the UPA 2 Government to take this to a new level through an entity called as EESL.
3. City Roads Street Lighting in India – the emergence of EESL:
The Ministry of Power introduced a new entity in 2012 called as EESL – Energy Efficiency Services Ltd – EESL is promoted by Ministry of Power, Government of India as a Joint Venture company of four Central Power Sector undertakings viz NTPC Ltd, PFC, REC and Power Grid. EESL was set up to create and sustain markets for energy efficiency in the country.
EESL works closely with Bureau of Energy Efficiency (BEE) and is leading the market related activities of the National Mission for Enhanced Energy Efficiency (NMEEE), one of the 8 national missions under Prime Minister’s National Action Plan on Climate Change.
EESL seeks to unlock market for energy efficiency in India estimated of Rs. 74,000 crores resulting of about 15% of present consumption. It seeks to create market access, particularly in the public facilities like municipalities, building, agriculture, industry etc., implement innovative business models, handhold private sector Energy Service Companies (ESCOs) in an effort to ensure replication.
EESL helps increase the uptake of efficient street lighting programs at local and regional levels in two ways:
- Provide comprehensive turnkey solution, by designing, implementing and monitoring the project using its own funds or
- Provide transaction support to municipalities to develop and design projects, develop contract documents, provide project management service and undertake monitoring and verification
EESL had done a comprehensive study at a MC/ULB level and it estimates that in 269 ULBs, there is an opportunity of annually reducing the energy consumption by 711 million KWh, which is about 52% of the current consumption. The savings in terms of recurring costs to ULBs is Rs. 345 crores and the investment required is about Rs. 2500 crores. The simple payback for the investments is a little over 7 years.
The other significant highlight that comes out, particularly from the standpoint of aggregation of demand is that there is a potential replacement of ~3.5 mn streetlights.
This is as on 2012-13 and for select ULB’s only, and now the estimate for an all India level is close to 300 mn street lights and our estimate is that around 5.5 to 6 mn street lights will be in the top 100 cities.
4. City Roads Street Lighting in India – the emergence of Prakash Path:
On January 5th, 2015, Prime Minister Mr. Narendra Modi launched the “National Programme for LED based Home and Street lighting” with the aim to replace incandescent bulbs (ICLs) with LED lights for residential and street lighting. The aim is to install LED lamps for household and street lighting in 100 cities by March, 2016.
Given what has happened so far, we feel that this could now stretch up to 2018. This opportunity could be worth Rs. 40 bn over the next 2-3 years.
Based on this guideline, the EESL is primed up to work with MC/ULB’s to facilitate a business model which other private entities could also follow and achieve target. There has been a lot of work which has happened so far on this.