Streetlight LED Energy Efficiency ESCO project

Developed in 2019 by the Oeste Regional Energy Agency – Oeste Sustentável, the OesteLED streetlighting ESCO project was implemented in 12 municipalities who constitute an Intermunicipal Community, a NUT III region in Portugal, with a population of approximately 365,000 inhabitants. It is the biggest LED streetlighting project ever launched in Portugal, and one of the biggest in the world.

The project was characterised by the replacement of 68,487 high pressure sodium luminaires with LED lighting technology with an overall estimated 84% reduction in the streetlight electricity consumption in the region.

Supported by a financing model based on an ESCO energy contract, the project is a result of approximately €12,5 M. investment over a 12-year contract. The contract enables an annual €3,4 M. in energy savings where 58,85 % is kept for the beneficiaries, the 12 municipalities who were free of any capital investment. The investment benefited from the large critical mass due to the big extent of the project which on the other side ensured a high luminous efficacy requirements. These circumstances shaped the appropriate conditions for an improved feasibility of the project, fact that resulted in better and more attractive conditions for potential investors and for more competitiveness.

On the technical perspective, the technological risk was minimised by the compliance of streetlighting standards, also other national references as well as those recognised by the current streetlight management and maintenance municipal concession. This scenario resulted in large energy savings and therefore more space and more capacity to distribute a higher percentage of savings as a benefit to municipalities. In fact, the 58,85 % distributed to municipalities was the biggest percentage of savings ever signed on an ESCO contract in Portugal. The average in Portugal has been around 30 %.

This project represents a major stepping stone in the outlook of energy performance contracting in Portugal, as for the first time it enabled a cooperation between several municipalities for a common investment in an ESCO model and established 12 independent concerted contracts for 12 local authorities. Its immense environmental benefits avoid each year around 10,000 tons of GHG emissions, contributing enormously to the Covenant of Mayors’ targets. It was an important step towards the Sustainable Energy Transition in the Oeste Region in Portugal.