Croatia modernizes public lighting in 57 municipalities

LightingBusinessSouth-East European INDUSTRIAL Мarket - issue 2/2019 • 08.07.2019

The platform Balkan Green Energy News, supported by the Center for Promotion of Sustainable Development in the Balkan region, recently announced that Croatia is currently retrofitting public lighting in 32 municipalities under a large-scale project called Newlight. The initiative, implemented by the Regional Energy Agency of the North-West Croatia (REGEA) and two Croatian counties (Krapina-Zagorje and Zagreb), plans to eventually modernize the public lighting infrastructure in all the 57 municipalities that joined the project through signing agreements with the counties in 2015.

The retrofit has so far managed to secure EUR 22 million (162 million Croatian kuna – HRK) in investment in public lighting in the first 32 administrative units. As a result, electricity savings worth EUR 2,2 million have been reported so far. “The project has also created tools that facilitate data collection, energy audits, and Energy Performance Contracting (EPC)”, the news platform further informs.

Project presentations are being held in northern Bosnia and Herzegovina (BiH), Serbia and North Macedonia, which aim to showcase the campaign as a positive model for further lighting and energy efficiency projects implementation not only in Croatia but in South-East Europe in general.

 

Objectives

The Newlight project was successfully registered under the European Investment Bank (EIB)’s ELENA program in October 2015 by REGEA based on the agreements between the municipalities and the two Croatian counties. Since then a 710 000 euro grant has been secured for the preparation phase of the project with the obligation at least EUR 15,8 million in investment to be secured over the next three years.

Newlight is aimed at the modernization of public lighting systems in all of the 57 participating municipalities. The project is focused on increasing the energy efficiency of lighting by replacing lamps with more efficient technologies and implementing advanced controlling and management systems. Reconstruction of lighting poles and replacement of power cables is also planned as a part of the project activities. It is estimated that energy and cost savings of 60% can be achieved through implementing the retrofit.

“Electricity consumption will be reduced by about 22,2 GWh per year. Modernization has been carried out or is under way on 54,830 lamps, which represents about 76% of the total number of lamps in the area of municipalities involved in the project. Total energy savings are estimated at 22 GWh and reduction in installed capacity at 5,113 kW.
The annual reduction of costs through electricity savings alone is estimated at more than EUR 2,2 million, and there are significant savings in maintenance that are not monetized. CO2 emissions will be reduced by 5200 tons per year”, Balkan Green Energy News reports.

 

Financing schemes

The Newlight project was completed in October 2018. So far a total of EUR 22 million in investment has been initiated in the two Krapina-Zagorje and Zagreb counties. As previously mentioned the reconstruction of public lighting has been initiated in 32 of the municipalities. The other 25 found financial indicators poor and decided to wait and use European Structural and Investment Funds (ESIF) for the modernization.
“Out of the 32 municipalities, 16 used EPC to finance modernization, 10 funded modernization under the traditional contract for the purchase of goods, 5 used lease agreements, and 1 used the design and build model.

All investments under the Newlight project were implemented without any kind of grants or subsidies which is quite unique for energy efficiency projects in Croatia. EPC contracts developed within the Newlight project are recognized in the country and all across South-East Europe as the most transparent, robust and complete documentation of its kind so far”, the Balkan Green Energy News platform announced.

 

Investment activities

REGEA organized and conducted public procurement for the completion of detailed energy audits of public lighting for local authorities as a precondition for carrying out investment activities. Over the 2015-2018 period REGEA coordinated and jointly implemented with its subcontractors the following activities:

  • The screening of the current state of public lighting (in all 57 municipalities, using the methodology created by REGEA, more than 72 000 lights were screened).
  • The preparation of action plans for the reconstruction, modernization and management of public lighting (based on the action plans, decisions were taken on the optimum scope of the reconstruction and financing models).
  • The preparation of tendering documentation (three basic types of procurement documents were developed: Design and Build, EPC, and Public-Private Partnership - PPP).

 

Opportunities on a national scale

The Newlight project set a new standard for documenting project activities and procedures such as energy audits and EPC contracting. This new standard is now widely used in Croatia.

A GIS based application was also developed specifically for the purpose of the Newlight project. The tool created by REGEA was aimed at facilitating inventory data manipulation and making this process more effective.

“The GIS based application is now widely used by energy auditors for data collection in other street-lighting reconstruction projects. The Newlight project has a mayor impact on the development of the EPC market in Croatia and South-East Europe”, the news platform further informs.
The good practices that arised with the implementation of the project are now evolving into a national scheme which is planned to function as a combination of the European Fund for Strategic Investments (EFSI) and ESIF and will be funded by innovative financing instruments.

“The proposed national investment platform of public lighting modernization envisages establishing a financial instrument for financing the real estate sector (ESCO service providers) by ensuring quasi equity, guarantees and similar financial products as well as co-financing of a monthly fee (payment) for public bodies. In the second half of 2018, EPC contracts developed under Newlight project were already widely used by other Croatian cities in their new projects”, Balkan Green Energy News summarizes.

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