Agenda Index City of Vancouver

ADMINISTRATIVE REPORT

TO:

Vancouver City Council

FROM:

General Manager of Engineering Services

SUBJECT:

BC Hydro Light-Emitting Diode (LED) Traffic Signal Proposal

 

COUNCIL POLICY

On June 6, 1995, Council approved the CityPlan which emphasizes the need for increased co-ordination and efficiency in the delivery City services.

On April 23, 2002, Council adopted Principles for Sustainability which emphasize reducing the use of resources.

PURPOSE

The purpose of this report is to seek Council's approval of the agreement with BC Hydro to retrofit the City's traffic signals with Light-Emitting Diode (LED) technology.

BACKGROUND

Presently, almost all signals in the City use incandescent light bulbs to illuminate the traffic signal head. This proposed program would replace the incandescent bulbs with more energy efficient LED lights.

An LED is an electronic device commonly used for displays (such as clock radios), and for brake lights on cars and trucks. Until recently, the light output from an LED was too low to be considered as a source of light to replace incandescent bulbs. However, recent advances in LED technology have resulted in the development of lights for traffic signals.

Although LEDs are more expensive than incandescent bulbs, there are advantages to this technology which can lower overall maintenance and operational life cycle costs. These include:

· Can last 6 to 10 times longer (approximate 7-10 year life-cycle), reducing annual maintenance costs due to increased reliability;
· Do not burn out like incandescent bulbs; and
· Produce light directly without filters.

The use of LED technology in traffic signals can result in significant operational and maintenance savings for the City. However, LED lights are substantially more expensive than incandescent bulbs. The average cost of an LED light is $150 and for an incandescent bulb it is $2.

DISCUSSION

BC Hydro proposes an arrangement with the City to replace all green, red, and don't walk incandescent bulbs with LEDs. Amber and walk signals would not be included in this program because they are on for short times, and use less electricity. Therefore, they would not provide a return for investment over the life-cycle of the LED. As a result, the light source for amber and walk signals would remain as incandescent bulbs.

Based on the inventory of the City's traffic signal plant, it is estimated that the material costs for the proposed program would be $2.2 million. BC Hydro would provide this initial funding and the City would pay BC Hydro fifty percent of the $2.2 million ($220,000 annually) over a period of five years, without interest.

LED lights have an estimated life-cycle of at least seven years. As part of this program, the City would be responsible to continue using LED lights and fund the total costs to replace the LEDs at the end of their life-cycle.

Electricity Costs with LED Lights
The current annual Traffic Signal Electricity Budget is $322,500. Based on the Business Case Analysis, as shown in Article 2 of the Appendix, the City's cost for electricity with LED lights is estimated at $75,000. Therefore, the annual savings in electricity costs would be $247,500, which is more than the $220,000 annual payment to BC Hydro.

Installation and Maintenance Costs for LED Lights
The City would provide the labour to install and maintain the LED lights. Two trial locations, Cambie at Broadway, and Dunsmuir at Hamilton, have recently been retrofitted with LEDs. Based on the trial, it was determined that the labour and equipment rental costs to retrofit an intersection are approximately $570. With 670 signalized intersections in the City, the total cost to retrofit the entire City's signal plant with LED lights is $380,000.

The City's current budget to re-lamp all incandescent bulbs and for random trouble calls to replace burned out bulbs is $170,000, annually. LED lights have a longer life-cycle and are more reliable than incandescent bulb. Therefore, based on the LED trial, it is estimated that the maintenance budget could be reduced by 65% or $110,000.

The Appendix shows a detailed business case analysis which evaluates four different scenarios for traffic signal lighting in the City. These include: A) The City does nothing and remains using incandescent bulbs as a light source for traffic signals; B) The City accepts the proposals from BC Hydro to subsidize the replacement of all green, red, and don't walk signals with LEDs; C) The City installs LEDs at our own pace without assistance from BC Hydro; and D) The City replaces all incandescent lights with LEDs. The objective of this analysis is to determine which program would provide the most cost savings for the City over a period of 3 life-cycles of using LED lights.

From the business case analysis the program proposed by BC Hydro, scenario B), provides the most cost savings in the examined time period.

As mentioned previously, the proposed BC Hydro LED program would require the City to fund the total replacement of LED lights after the end of their life. Therefore, staff recommend that the savings in electricity and maintenance budgets be set aside to fund the

replacement costs. As a result, existing budgets would not be reduced during the first life-cycle of LED lights. However, budgets could be reduced after about 2010; the analysis in Figures 1a and 1b estimates this saving to be $20,000 per year.

Figure 1a - LED Replacement Reserve for the First Life-cycle

Figure 1b - LED Replacement Reserve for the Second Life-cycle

Based on the analysis shown above, the proposed LED program is sustainable and can potentially provide substantial savings for the City in the future. As a result, staff recommend that Council approve the proposed agreement between BC Hydro and the City

to install LED lights for all green, red, and don't walk signals.

FINANCIAL IMPLICATIONS

As part of the program, BC Hydro would provide the initial capital funding of $2.2 million for all the LED materials. The City would be responsible for the installation and maintenance costs, and would be required to pay BC Hydro fifty percent ($1.1 million) of the initial costs over a period of five years ($220,000 annually), without interest.

In addition, the City would fund the total replacement costs for LED lights at the end of their life. Staff propose that the savings in electricity and maintenance budgets, that would be received through using LEDs, be set aside in a capital reserve to fund this replacement. This reserve would initially be in a deficit position. Therefore, during the first life-cycle, existing electricity and maintenance budgets would not be reduced. However, after the first life-cycle, the City would begin to accumulate more than enough savings to replace the LEDs and so, electricity and maintenance budgets would be reduced by approximately $20,000 annually after 2010. There are uncertainties about the length of service of the bulbs, and their replacement cost in 2010, which could affect these savings. This analysis reflects conservative assumptions.

CONCLUSION

Recent advancements in Light Emitting Diode (LED) technology have resulted in the development of LED lights for traffic signal applications. This new light source consumes 80% less energy, last 6 to 10 times longer than conventional incandescent bulbs, and provides increased safety and visibility for motorists and pedestrians.

A detailed business case analysis shows that the proposed agreement with BC Hydro to retrofit the City's signals with LED traffic lights is sustainable and will provide substantial cost savings to the City though reduced energy consumption and maintenance costs.

Therefore, staff recommend that Council approve the proposed agreement with BC Hydro to retrofit the City's traffic signals with LED lights.

Link to Articles 1 to 5

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