Ealing has so much money in can commit to projects with 13 year pay-back periods. Not

LED Lamps-BIn the real world you have to think very hard about committing £6.8 million to a project with a 13 year pay back period. That is what the council is doing with its scheme to replace all of the bulbs in our street lighting with LEDs. Superficially this is a very attractive scheme. It ticks all of the green and cost saving boxes. It does though tie up large amounts of capital for a long time and like all forms of financial resource capital is a very limited commodity right now.

Next Tuesday at full council we will be debating an update on the council’s Corporate Plan. On page 26 it says:

Developed the Business Case for investment in LED street lighting which was approved at April cabinet.

The paper backing this says that the payback period for this investment is 13 years. If you dig around the budget papers you will find that the capital value of this project is £6.8 million. You might feel that the council should wait for this technology to mature before irrevocably committing £6.8 million of scarce capital to a technology that might be half the price next year.

£6.8 million would allow us to expand a primary school or to significantly add to our road resurfacing programme which Labour has cut back from £25 million ’s when the Conservatives were in power to £15 million under Labour (a 40% cut). This project will use imported lightbulbs and take away the jobs of people who change the lightbulbs in our streetlights (because the bulbs have a longer life). Investment in roads and schools at least ensures that jobs are produced close to home.

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2 Responses to Ealing has so much money in can commit to projects with 13 year pay-back periods. Not

  1. Eric Leach says:

    Interested in this but confused by this.

    In 2005 LBE secretly entered into a PFI with EDF (who subsequently sold it to SSE). This PFI transferred ‘ownership’ and stewardship of Ealing’s Street Lighting to SSE up until 2030. The first five years of the deal required SSE to effectively replace all the on-street lighting kit. Now only three years after all columns, lighting technologies and lanterns were changed we are to have another change of the lighting technology. And we, the rate payers (and not SSE), are going to pay for it?

    And what will happen to the 700+ recycled heritage columns and lanterns in W13 and W5. Will they be upgraded to LEDs?

  2. Phil says:

    Eric,

    The council still picks up the electricity bills and is exposed to increasing fuel costs like anyone else. I assume this is a contract renegotiation where SSE gets £6.8 million to replace the bulbs with LEDs and the council gets savings on its fuel bills which add up to break even in 13 years. I guess if the council owned the street lights it could take the savings in reduced labour costs and the payback period would be rather shorter.

    Only the conventional lights will be done. Any fancy heritage stock will not change.

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