Green Apple Award 2019

4 years ago

Connect were approached by various Local Authority Clients, from the East Shires to the North East, to assist in achieving their ‘spend to save’ initiatives driven by budget constraints and ongoing financial pressures. Connect, as a responsible portfolio asset holder of c.267,000 street light units, signs and bollards; and in line with our corporate sustainability ethos, explored the opportunity and collaborated with our Local Authority Clients to deliver carbon reduction, energy and maintenance cost savings totalling £32m over the remaining contract period for our clients by way of introducing energy efficient LED lighting. As a result, we collaborated with Balfour Beatty Living Places and its supply chain to deliver the LED schemes and have successfully commercially generated intercompany turnover for BBLP of c.£19m across our 5 street lighting projects with further LED schemes in the pipeline.

With improving LED technology and confidence in the long-term performance of LED products the SPV seized the opportunity to negotiate commercially favourable warranties from the supplier, thus reducing lifecycle risk by way of securing 20-year warranty on LED products (usually 5-10 years but negotiated 20 years due to large scale orders). The warranty covers the duration of the PFI contracts including Handback, thus significantly reducing lifecycle risk and reduced maintenance visits (and carbon - a sustainability aspiration for our Clients) contributing to the maintenance savings shared with clients.

Each project required a collaborative approach between all stakeholders - clients, shareholders, funders, legal experts and technical advisors. All parties needed to accept a Deed of Variation to the contract to change the asset inventory. The result being a tangible benefit - a more reliable asset which benefits from a 20-year manufacturer warranty, a favourable risk profile which in turn delivers maintenance savings which is shared with clients.

Standardising contract variations for LED upgrades has been beneficial in engaging funders, technical and legal advisors from across our street lighting portfolio, to the benefit of the clients and BBLP. Our approach has reduced contract variation cost by c.£15k and also reduced the time taken to implement a contract change which has further benefitted the Local Authorities as LED lanterns are installed quicker thus realising the benefit of reduced energy consumption earlier. Connect has further collaborated with Lenders and Clients to create an innovative Framework Deed of Variation approach which will simplify the process and enable a swifter, even more financially viable route for LED lantern switchover.

Collaboration with all relevant stakeholders is key to delivering a solution that meets our Client requirements. We constantly review LED technology with the view to deploy on the remainder of the network, particularly on traffic routes which require a greater technical lighting solution. We liaise with suppliers and attend Research and Development events to keep at the forefront of lighting technology particularly with Smart Cities on the horizon which will offer further opportunities for Balfour Beatty.

Click here to read about our Green Apple 2019 award.