ECSO Streetlight in municipality of Middelfart - ENNEREG Good Practice in Energy Services

The municipality of Middelfart has made the first EPC/ESCO contract on energy renovation, operation and maintenance on streetlight in Denmark. ESCO is a concept where, through a third party, renovation and modernization tasks are accomplished without financial risk for the municipality. The goal is to save more than 30 mill dkr. (approx. 4 mill euros), save energy and to give the public better streetlight.
The ESCO contract runs for 15 years.

Summary

[EN - English]

The ESCO contract runs for 15 years.

Aims and Objectives

The street light was in poor condition and the municipality was about to re-invest more than 28 mill. Dkr. (approx. 3.8 mill. euro). Due to good experiences with ESCO in municipal buildings, the municipality decided to use the ESCO model on street light.

The overall objectives were to:

Save money on the municipality budget
Save energy and reduce the CO₂ emissions
Improve the effect of the light and expand the time the light is on.

Qualitative project objectives in the ESCO tender (see results):

Change all electric fittings based on mercury before 2015 (approx. 5200 fittings)
Change all electric fittings within the contract period (approx. 10.000 fittings) and implement electric meters on each fitting.
Remove all airborne conduits
Lower operation and maintenance cost

Results and Impacts

Start Date: Nov. 2011 (tender)
End Date: 2027 (contract period)
Investment 4.000 kEuro
Energy savings 1.2 mill. kWh year,
Municipality savings approx.: 3.8 mill. euros.

All fittings (both normal and mercury) will be changed and meters will be implemented on each fitting during the ESCO period.

Fixed energy prices on street light
Fixed budget for 15 years.

Technical and Financial Implementation

In the municipality of Middelfart, Street lightning includes more than 10.000 electric light fittings. More than 5000 are based on mercury and are not very energy efficient. They are old and some of them are more than 40 years old. There are more than 22 km of wood and metal electricity pylons. Only 20 % of them has meters, so it is difficult to measure and control the consumption. To face these challengers, the municipality decided to use the ESCO model.

The price of the renovation were approximately 30 million Danish kroner (approx. 4 mill euro) and is financed by the municipality obtaining a bank loan which is then provided to the ESCO company. In return, the ESCO Company is supposed to accomplish the specified tasks. If the expected savings every year are not achieved as guaranteed, the ESCO Company must pay the difference. If up to three percent more savings are achieved, they go to the municipality. Further savings are divided between the ESCO Company and the municipality. After the guaranty period, all future savings go to the municipality.

Lessons Learnt

The ESCO model is a flexible model, that can easy be transformed into other areas. After experiences with the normal ESCO on buildings, the municipality has learned how to use the model in other areas.

It is important to give the tender and the parameters from which you choose your supplier an extra focus. Try to implement incentive structure, so the supplier gains from optimize the energy renovation and operation. E.g. if the supplier performs better than the contract, them spilt the profit between the supplier and yourself.

The Partners and Stakeholders

The project is owned by the Municipality of Middelfart but is developed as a partnership between the municipality and 2 private companies: Spectras (tender and contracting) and Fredsted Consulting (technical support and quality control). The contract was given to Energimidt (a Danish energy company).

How this Action could be Replicated

The main barriers for replication to other regions in EU are different national rules.

The model is simple and easy to replicate and Middelfart is happy to tell others about their experiences and what they have gained from their different ESCO projects.

Related Information on the Regions 202020 Website:

Sustainable Energy Theme(s): Energy Efficient Products : Energy services (ESCOs, Building Performance Contracts, etc)
Region(s)/Community(ies): : DK: Triangle
Country(ies): Denmark

Last updated: 18/02/2013 7:54pm - Contact: Jakob LORENZEN -