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The Economics of
Low Carbon Cities
Kigali, Rwanda (2018)
Andy Gouldson, Sarah Colenbrander
and Andrew Sudmant, University of Leeds
Natasha Chilundika, University of Oxford
Lea de Melo, London School of Economics
and Political Science
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Funded by the International Growth CentreThe Economics of Today
Low Carbon Cities Today 10.1% of city-scale GDP – USD
301 million – leaves the local economy every
Kigali, Rwanda
year through payment of the energy bill.
mmyy
ocnononoomy 10.1% of
ececo
aleallee e
c a c GVA leaks
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-
out of the
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cciittiyt
c
economy
Tomorrow
Investing
0.6% of 0.4%
Investing GVA
Leads to...
p.a. leads to... Leads to...
Energy
0.6% of GDP or $17 million could reductions in the energy bill of 1.5% of GDP p.a. or savings of $203m in 2032
be profitably invested, every year
Financial Viability
for ten years, to exploit 6.9 years for measures to pay for themselves
economically attractive energy
Employment
efficiency and low new jobs and skills in low carbon goods and services
carbon opportunities.
Wider economic benefits
reduced energy expenditure, improved energy security, extra GDP
Wider social benefits
improved energy access, better indoor air quality, less congestion
Potential to reduce greenhouse emissions relative to business as usual
Potential to reduce CO2 emissions
Business as
usual in 2032
2000 2025 39.0% GHG reduction 42.5% GHG reduction
24.2% CO2 reduction 25.1% CO2 reduction 45.4% CO2 reduction 46.6% CO2 reduction
Through exploitation of Through exploitation of
profitable options no net cost options
After cost-effective After cost-effective After cost-neutral After cost-neutral
2 The Economics of Low Carbon Cities: Kigali, Rwanda The Economics of Lowinvestments in Kigali,
Carbon Cities: the city.Rwanda investments in the investments in the city. investments in the 1
electricity sector. electricity sector.Table of Contents Figures
The Economics of Low-Carbon Cities: 1 Sector Focus – The Buildings Sector 33 Figure 1: Indexed energy bill, energy use, Figure 15. Indexed energy consumption, energy
The Impacts of Business as Usual Trends 33 and carbon emissions 6 bills and emissions in the manufacturing,
Table of Contents 2 The Potential for Carbon Reduction – construction and non-fuel mining industries in
Investments and Returns 35 Figure 2: Emissions from Kigali under three Rwanda between 2000 and 2032. 42
Figures 3 Options Appraisal – Residential Sector 36 different investment scenarios, indexed against
Options Appraisal – Commercial and 2018 emissions, between 2000 and 2032 7 Figure 16. Full-time equivalent employment by
Tables 4 Public Sector 38 industrial sub-sector in Kigali in 2012. 42
Figure 3: Indexed energy use – total, per capita
Executive Summary 5 Sector Focus – The Industrial Sector 40 and per unit of GDP. 24 Figure 17. Annual revenue by industrial
Introduction 5 The Impacts of Business as Usual Trends 41 sub-sector in Kigali in 2012. 43
Our Approach 6 The Potential for Carbon Reduction – Figure 4: Indexed energy prices and
Findings and Recommendations 7 Investments and Returns 43 total energy bill. 25 Figure 18. Trips by mode share in Kigali
between 2000 and 2032. 45
Findings and Recommendations 6 Sector Focus – The Transport Sector 44 Figure 5: Indexed emissions – total, per unit
The Economic Case for Low Carbon, The Impacts of Business as Usual Trends 45 of energy, per unit of GDP and per capita. 25 Figure 19. Indexed energy consumption, energy
Climate Resilient Investment 6 The Potential for Carbon Reduction – bills and emissions in the transport sector in
Policy Refections 9 Investments and Returns 46 Figure 6: GHG emissions by sector in Kigali, Kigali between 2000 and 2032. 46
Options Appraisal 47 2000 to 2032 26
Chapter 1. Introduction, Context and Figure 20. Emissions from the transport sector
Objectives 10 Sector Focus – The Waste Sector 50 Figure 7: Emissions from Kigali under three under three different investment scenarios, indexed
Cities and Climate Change 10 The Impacts of Business as Usual Trends 51 different investment scenarios, indexed against against 2018 emissions, between 2000 and 2032. 47
Rwanda 11 The Potential for Carbon Reduction – 2018 emissions, between 2000 and 2032. 27
Kigali 12 Investments and Returns 52 Figure 21: Waste production by type in Kigali,
Objectives 13 Options Appraisal 53 Figure 8: Domestic electricity generation (MW) 2000 to 2032 51
in Rwanda by fuel type, 2000 to 2032.
Chapter 2. Our Approach 14 Chapter 6. Discussion 54 Projections are based on planned investments. 29 Figure 22: Carbon emissions (ktCO2e) from the
Baseline Analysis 14 Financial barriers: Improving access to capital 55 waste sector in Kigali between 2000 and 2032. 52
Data energy use by industry is not available Removing non-financial barriers 56 Figure 9. Emissions factor of grid electricity in
at the city scale in Rwanda 15 Rwanda, 2000 to 2032. This emissions factor Figure 23. Emissions from the waste sector under
Identification and Assessment of Measures 16 Chapter 7. Conclusion and includes the effects of imported electricity. 29 three different investment scenarios, indexed
Assessment of the Scope for Deployment 23 Recommendations 58 against 2018 emissions, between 2000 and 2032. 52
Aggregaton of investment needs and Figure 10. Emissions factor of electricity in
mitigation potential 23 References 59 Rwanda between 2000 and 2032 under two Figure 24: The fuel properties can be used to
investment scenarios. 30 determine the typical calorific values / densities
Chapter 3. The Key Findings 24 Appendix A. Workshop Participants 59 of most common fuels. Source: Defra (2013). 64
The Impacts of Business as Usual Trends 24 Figure 11. Energy use by fuel type in the buildings
The Potential for Carbon Reduction – Appendix B. Emissions factors 60 sector in Kigali between 2000 and 2032. 34 Figure 25: The fuel properties can be used to
Investments and Returns 26 determine the typical calorific values / densities
References 61 Figure 12. Indexed energy consumption, energy of most common fuels. Source: Defra (2013). 64
Chapter 4. Sector-Specific Results 28 bills and emissions in the buildings sector in Kigali
Appendix C. Additional information between 2000 and 2032. 34 Figure 26: Emissions factor for each scenario,
Sector Focus – The Electricity Sector 29 on the electricity sector 64 2015-2032. 65
The Impacts of Business as Usual Trends 29 Electricity sector 64 Figure 13. Emissions from the buildings sector
The Potential for Carbon Reduction – under four different investment scenarios, indexed Figure 27: Energy generation (TWh) under
Investments and Returns 30 against 2018 emissions, between 2000 and 2032. 35 each scenario between 2000 and 2032. 65
Options Appraisal 31
Figure 14. Energy use by fuel type in the
manufacturing, construction and non-fuel mining
industries in Rwanda between 2000 and 2032.
Energy use data is not available at the city-scale. 41
2 The Economics of Low Carbon Cities: Kigali, Rwanda The Economics of Low Carbon Cities: Kigali, Rwanda 3Tables Executive Summary
Table 1. Energy generation by scenario (MW) 17 Acronyms Introduction Our Approach
Table 2. Key technology-specific values (2015-2032 BRT Bus Rapid Transit
averages) 18 When is economic development, sustainable We start the analysis by collecting data on levels and
development? Embedding environmental composition of energy use in Kigali. We do this for the
electricity, housing, commercial, transport, industry
Table 3. League table of the cost-effectiveness of
CO2-e Carbon dioxide equivalent stewardship in policymaking is critical in and waste sectors. Primary data was provided by a
low-carbon scenarios in the electricity sector. 31 all cities and countries of world, but may
emissions. This figure includes number of government agencies including the Ministry
Table 4. League table of the carbon-effectiveness of all greenhouse gas emissions be especially important in Rwanda, where of Infrastructure (MININFRA), the Rwanda
(including methane and NOx) both the economy and the population are Transport Development Authority (RTDA), and
low-carbon scenarios in the electricity sector. 31
as CO2 equivalent emissions. Rwanda Energy Group (REG).
growing rapidly. But for decision-makers
Table 5. League table of the cost-effectiveness of GWh Billion watt hours to act, they need a credible and locally For each of these sectors, and for the city as a whole,
low-carbon measures in the residential sector. 36 we examine the influence of recent trends, for example
KtCO2e One thousand tonnes of CO2 appropriate evidence base.
in economic growth, population growth, consumer
Table 6. League table of the carbon-effectiveness of equivalent emissions behaviour and energy efficiency. These historical
low-carbon measures in the residential sector. 37 This study provides an evidence base for Kigali and
kWh Kilowatt hour examines whether there is an economic case that can trends inform ‘business as usual’ baselines that project
be used to secure low-carbon and climate-resilient future levels and forms of energy supply and demand,
Table 7. League table of the cost-effectiveness of LFG Landfill Gas as well as future energy bills and carbon emissions,
low-carbon measures in the commercial and public investments in the city. By providing prioritised lists
of the most cost- and carbon-effective measures that to 2032.
sector. 38 MININFRA Ministry of Infrastructure
could realistically be promoted across the housing, Based on extensive literature reviews and stakeholder
Table 8. League table of the carbon-effectiveness of MtCO2e One million tonnes of CO2 commercial buildings, transport and waste sectors consultations, we compile lists of the low-carbon
low-carbon measures in the commercial and public equivalent emissions within the city this report serves as a resource for measures that could potentially be applied in domestic,
sector. 39 MW Million watts This report presents results from modelling updated commercial and public buildings, transport, electricity
from 2018 data, details of the methodology and a and waste sectors in the city. The industry sector was
Table 9. League table of the cost-effectiveness of REG Rwanda Energy Group discussion of the opportunities for carbon abatement. excluded at this stage due to the lack of locally specific
low-carbon measures in the transport sector. 48 In addition to providing a static ‘snapshot’ of the data. We assess the performance of each measure
REMA Rwandan Environmental by conducting a realistic assessment of its costs and
Management Authority opportunity for cost- and carbon-effective measures
Table 10. League table of the carbon-effectiveness of in Kigali today, the models behind the analysis likely lifetime savings, and we consider the scope for
low-carbon measures in the transport sector. 49 RTDA Rwanda Transport presented can be updated to provide a means for deploying each one in Kigali in the period to 2032.
Development Authority this report to be a ‘living document’ that can remain These appraisals were subjected to a participatory
Table 11. League table of the cost-effectiveness of review in expert workshops to ensure that they are as
useful in the future.
low-carbon measures in the waste sector. 53 RWF/tCO2-e Rwandan Francs per tonne realistic as possible and to consider the key factors that
carbon dioxide equivalent shape the potential for their deployment. The results
Table 12. League table of the carbon-effectiveness of are presented in league tables of the most cost- and
low-carbon measures in the waste sector. 53 tCO2-e Tonnes of carbon dioxide carbon-effective measures that could be adopted
equivalent emissions. This figure both in each sector and across the city as a whole.
includes all greenhousegas
emissions (including methane We draw together the results from our assessment and
and NOx) as carbon dioxide the expert review to determine the potential impact
equivalent emissions. of the combined measures across the different sectors
of the city as a whole. This allows us to understand the
UNEP The United Nations scale of the development opportunity, the associated
Environment Program investment needs and paybacks, as well as impacts on
USD/tCO2-e: United States dollars per tonnes energy supply and demand, energy bills and carbon
carbon dioxide equivalent emissions in the different sectors in the city.
In all parts of this process, analysis is guided by
modelling approaches and lessons learned from similar
city scale analysis completed by the team over the last
8 years. Including this most recent analysis, the team
from the University of Leeds have completed similar
analysis in more than 20 global cities, leading to 18
academic publications, and media attention ranging
from the New Climate Economy, the New York Times
and the Economist.
4 The Economics of Low Carbon Cities: Kigali, Rwanda The Economics of Low Carbon Cities: Kigali, Rwanda 5Findings and Recommendations
The Economic Case for Low-Carbon, Climate-
Resilient Investment
We estimate that Kigali’s GDP was RWF 2.1 trillion We predict that a continuation of business as usual After examining the potential costs and benefits – 42.6% through cost-neutral investments that could
(USD 2.4 billion) in 2018, and if trends continue trends in the period to 2032 will see the total energy of the wide range of energy efficiency, renewable be paid for by re-investing the income generated
we forecast that GDP will grow to RWF 9.5 trillion ill for the city increase by 167% from 2018 levels to energy and other low-carbon measures that could from the cost-effective measures. This would require
(USD 11.9 billion) by 2032. We also find that the total RWF 720.8 billion (USD 828 million) in 2032, a be deployed across different sectors in the city, we net investment of RWF 1.2 trillion (USD 1.4 billion),
energy bill for Kigali in 2018 was RWF 220.1 billion trend shown in figure 1. Total energy use in Kigali will find that – compared to business as usual trends – generating annual savings of RWF 152 billion (USD
(USD 252.9 million), meaning that 10.1% of Kigali’s rise by 130% in the same period. With continued the city of Kigali could reduce its carbon emissions 174 million), paying back the investment in 8 years
GDP is spent on energy. economic growth, this would mean that energy bills by 2032 by: and generating annual savings for the lifetime of
will consume an estimated 7.7% of the GDP of Kigali the measures
in 2032. We also predict that, in a business as usual – 39.0% through cost-effective investments that would
scenario, total carbon emissions from Kigali will more than pay for themselves on commercial terms
increase by 122% from 2018 levels by 2032, while over their lifetime. This would require investment
emissions per capita will increase 33%. of RWF 780 billion (USD 918 million), generating
annual savings of RWF 115 billion (USD 132
million), paying back the investment in 6.9 years
and generating annual savings for the lifetime of
the measures.
Figure 1: Indexed energy bill, energy use, and carbon emissions. Figure 2: Emissions from Kigali under three different investment scenarios,
indexed against 2018 emissions, between 2000 and 2032.
300 250% Baseline
Total emissions
Emissions per Cost-effective
267%
unit energy 221% Cost-neutral
250
230%
Emissions per unit
222% GDP 200%
200 Emissions per capita
150
133% 150%
135%
100
127%
50 100%
0 1.2
1.0
0.8
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
50%
0%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
6 The Economics of Low Carbon Cities: Kigali, Rwanda The Economics of Low Carbon Cities: Kigali, Rwanda 7Policy reflections
We find that the waste sector contains approximately While the impacts of the cost-effective investments Development and climate action can be mutually At the same time, Kigali has a tremendous
60% of the cost-effective emissions savings potential in will reduce overall emissions relative to business as supportive. Indeed, results from this analysis suggest opportunity to avoid ‘lock in’ to high energy use and
Kigali, with the remaining potential being distributed usual trends, they do not stop overall emissions from that achieving the goals set in Rwanda’s Vision 2020, emissions from these sectors if actions are taken today
among the domestic sector (3%), the commercial and rising in absolute terms because of ongoing growth Economic Development and Poverty Reduction before large investments supporting the business-as-
public sector (2%), the electricity sector (19%) and the (even if that growth is more energy-efficient and less Strategy II (EDPRS) and the targets of the Sustainable usual pathway are made. The buildings and vehicle
transport sector (17%). The step change in the cost- carbon-intensive). With exploitation of all cost- Development Goals, can be significantly supported stock that exist in 2015 will be little more than one-
effective and cost-neutral scenarios between 2015 and effective options, by 2032 emissions would be 35% by actions that also address climate change. quarter of the building and vehicle stock that will
2018 reflects large-scale investments coming online above 2018 levels. These measures will also save exist in 2032 at current rates of growth. Actions to set
in the transport and waste sectors. RWF 118.6 billion (USD 173.2 million), in energy High-level results from this analysis reveal that there Kigali on a more sustainable path include investments
expenditure each year, thereby reducing the energy are many economically attractive opportunities to in public transport, supporting truly low-carbon
The waste sector is so significant for two reasons. bill in 2032 from a projected 7.7% of GDP to 6.2%. promote a more sustainable and climate-friendly f technologies (such as electric motorbikes),
Firstly, as in many other Least Developed Country With the exploitation of all cost-neutral measures, the orm of development in Kigali, which would also investments in geothermal electricity generation
cities, waste is a much larger share of emissions than city’s emissions rise by only 27% above 2018 levels. improve the economic competitiveness of and reduce and spatial planning.
in higher income contexts. Secondly, the low-carbon energy bills in the city. The scale of the opportunities
measures in the waste sector generate electricity, which Investment in emissions savings can buy Kigali demonstrates that accounting for climate change in While we hope that Kigali can use these findings to
displaces high-carbon electricity from the grid and much needed time to search for, adopt and lock in urban planning can be attractive in commercial terms, inform future development plans, we recognise that
thereby avoids emissions from two sources. It is permanent reductions in emissions. We can measure above and beyond the immense benefits of reducing the presence of such opportunities does not mean
important to note, however, that emissions are growing this with the Time to Reach BAU Emission Levels the future impacts of climate change. that they will necessarily be exploited. By providing
much more quickly in each of the other sectors of the (TREBLE) point, which compares the time taken evidence on the scale and composition of these
economy investigated in this analysis. Actions in these in years for emissions with investment in low-carbon Results at the economic sector level demonstrate opportunities, we hope that this report will help to
sectors is therefore critical to avoid a future of high measures to reach the level that would have been that the case for action is not restricted to any one build political commitment and institutional capacities
emissions, and expenditure on energy, in Kigali. realized without such investment under the BAU area of the economy or concentrated in a small number for change. We also hope this report will help Kigali
scenario in a reference year, in this case 2025 of actions. Instead, the opportunity for action is to secure the investments and develop the delivery
(Gouldson et al., 2015). If all cost-effective options contained in a large number of actions in all sectors. models needed for ambitious climate action. Some
are implemented, the TREBLE point relative to Some of these actions could have a major effect on of the low-carbon and climate resilience measures
2032 in Kigali will be 13.4 years. If all cost-neutral emissions, for example, land-fill gas utilisation at could be commercially attractive whilst others may
measures are implemented, emissions will only reach Kigali’s landfills. Others of these actions, such as only be viable with public investment and/or climate
their 2032 business as usual level in 14.3 years. electric motorbikes and clean cookstoves only have finance. Many of the opportunities would benefit from
This can give policymakers time to build the political a small effect on energy use and emissions each time the support of enabling policies from government.
momentum and the technical, financial and they are purchased. But if policies could promote
institutional capabilities necessary for more ambitious their widespread adoption these actions have massive We stress that economic cost considerations alone
changes to urban form and function. potential to help address climate and development should not shape the transition to a low-carbon
challenges, and lead Kigali towards a low carbon development model in urban Rwanda. Decision-
future. makers should also consider the issues relating to the
equity, inclusivity and broader sustainability of each
Future emissions growth will increasingly come from measure. However, we understand that the presence
the transport, residential, commercial and industrial of a compelling economic case is often necessary for
sector making the major sources of emissions in Kigali decision-makers to consider the broader case for action.
will look increasingly similar to those of middle-income We therefore hope that this evidence base on the
economies. Consequently, while investments in waste opportunities for climate action helps to mobilise
produce the largest impacts today, investments in political will for and public interest in ambitious
buildings and transport will have the largest impact climate action in Kigali.
in the near future.
8 The Economics of Low Carbon Cities: Kigali, Rwanda The Economics of Low Carbon Cities: Kigali, Rwanda 9Chapter 1. Introduction,
Context and Objectives
Cities and Climate Change Rwanda
The influence and impact of cities cannot be Cities’ share of global emissions is high and rising fast, Rwanda is a small, landlocked country in East Africa. The Government of Rwanda has committed to
overstated. More than half of the world’s population but their institutional capacity and socio-economic With a population of 12 million people in an area of mainstreaming environmental sustainability and
lives in urban areas, and up to 70% of production and dynamism also mean that cities are uniquely positioned 26,338 km2, it is the most densely populated country climate resilience into both productive and social
consumption takes place in cities. Cities are the places to tackle climate change. This is particularly true in in Africa. Population density is likely to increase: sectors, as outlined in the National Strategy for
where many of the world’s institutions and much of countries experiencing rapid population and economic Rwanda’s population grew by 2.9% in 2014 and is Climate Change and Low Carbon Development
its infrastructure are located, and where many of the growth, where massive investment in infrastructure expected to more than double from 12 million today (Republic of Rwanda, 2011). This document
world’s major social, economic and environmental provides an opportunity to reduce the energy intensity to 26 million by 2050 (Republic of Rwanda, 2011). recognises that even where substantial co-benefits
challenges are created, experienced and sometimes of social and economic activities. It is often suggested to climate action are available, action is likely to be
tackled. Cities are also the places where many that preparing for climate change at an early stage The Rwandan economy achieved real GDP growth constrained by lack of finance and capacities. To
international and national policies and plans must of development is more effective and economically of about 9% per annum between 2000 and 2014 remedy this, Rwanda has established an innovative
ultimately take effect. Global action frequently relies attractive than replacing or upgrading established (World Bank, 2014). In the past decade, this growth basket fund – the National Environment and Climate
on urban action – our common future depends to a infrastructure. Mainstreaming climate objectives has translated effectively into poverty reduction, largely Change Fund (FONERWA) – to finance climate
large degree on the way that we develop, organise, into planning processes has the potential to reduce through a doubling in household-level agricultural actions, and has built strategic public-private
live and work in cities. bills, increase energy access, improve air quality, ease production (World Bank, 2014). Despite these relationships to finance climate action and build
congestion, create jobs and mitigate the impacts of impressive achievements, the incidence of poverty relevant capacities (Nash and Ngabitsinze, 2014).
Energy will play a pivotal role in the future climate change. remains high with 45% of the population living below The National Strategy has also informed the Economic
development of cities. Currently, activities in cities the national poverty line in 2011 (World Bank, 2014). Development and Poverty Reduction Strategy
consume 67-76% of all energy and are responsible Focusing on Kigali, this report considers the ways in 2013-2018 (Republic of Rwanda, 2013), which guides
for 71-76% of all carbon emissions (UNEP, 2012). which the relationship between energy, water and The scale of the development challenge is evident from
national planning and budgeting. The Rwandan
Some estimates suggest that 10-18% of all income development could be changed in a rapidly growing the low levels of access to modern energy and clean
Environmental Management Authority (REMA)
that is earned in cities is spent on energy (Gouldson city with pressing development needs. The report water. Currently, 25.8% of Rwandans do not have
has been designated the lead authority on climate
et al., 2015). Despite its costs and impacts, modern reviews the cost- and carbon-effectiveness of a wide access to an improved water source, while 83.2% do
change, and is mandated to coordinate national
energy is critical to human wellbeing. It enhances range of supply and demand measures options that not have access to electricity even for lighting purposes
action on climate change (Fisher et al., 2014).
quality of life and enables economic activity. Increasing could be applied to energy and water use in Kigali. (NISR, 2014). Biomass still accounts for 85% of
energy supplies and improving energy access facilitate It then considers whether there is an economic case national energy consumption, followed by petroleum Rwanda’s leadership on climate change is particularly
development. The challenge is achieving sustainable for major investments in these options across the city, at 11% and electricity at 4% (AfDB, 2013). The impressive considering that the country has among
and affordable energy provision – how can cities and whether these investments have the potential to government has set increasingly ambitious targets the lowest levels of per capita emissions in the world.
transition to energy efficient, low-carbon development shift the city to a lower-carbon, more climate-resilient to improve access to both water and electricity. The Rwandans are estimated to emit 0.1 tonnes of carbon
paths? development path. original version of the national strategy document, dioxide equivalent (tCO2-e) per person from energy
Vision 2020, established two policy goals that were consumption and 0.6tCO2-e per person when
subsequently revised upwards. Originally, Vision 2020 emissions from land use change are incorporated
set an aim for 35% of the population to have access (Republic of Rwanda, 2011). For reference, the global
to electricity and 60% to have access to improved average is 4.6tCO2-e from energy consumption
sanitation facilities by 2020. These targets were revised (EIA, 2012), while people in OECD countries emit
in 2012 to 70% and 100% respectively. In both versions an average of 12.7tCO2-e per capita (OECD, 2015).
of Vision 2020, a target of 100% access to clean water
was established (MINECOFIN, 2012).
While Rwanda’s economic growth is rapid, future
development and poverty alleviation remains
vulnerable to climate variability and climate change.
Rwanda’s population is largely rural and depends
on rain-fed agriculture; tea and coffee comprise a
large proportion of Rwanda’s export earnings; and
hydropower generates half of domestic electricity
(Republic of Rwanda, 2011; AfDB, 2013).
10 The Economics of Low Carbon Cities: Kigali, Rwanda The Economics of Low Carbon Cities: Kigali, Rwanda 11Kigali Objectives
Rwanda remains predominately rural, with 19.9% Advancing climate change may add to this challenge. What is the best way for a city to pursue low-carbon, This research is supplemented by an economic
of the population living in urban areas (NISR 2012). Rising temperatures are anticipated to increase climate-resilient development path? It is important assessment of supply and demand measures in the
With a population of 1.5 million people (Bower, the risk of malaria transmission in Rwanda (Ermert to demonstrate the local benefits of climate action in water sector. Water and sanitation are among the basic
Buckley, Murray & Wainer, forthcoming), the capital et al., 2013). Flooding and drought – and their order to mobilise political commitment and engage infrastructure services that are fundamental to human
city – Kigali – accommodates 13% of the population socioeconomic impacts – will be more frequent, less a broad range of actors. When a country faces pressing development, and the foundation on which human
and is easily the largest city in Rwanda (NISR, 2012). predictable, and have larger impacts on public health, development needs, it is also necessary to identify settlements are built and function (Satterthwaite,
Located in the heart of the country, Kigali is comprised infrastructure and food security (Byamukama, 2011). interventions that do not entail significant opportunity 2014). Failure to provide these services increases
of three districts: Gasabo in the North, Nyarugenge Rwanda already struggles with climate variability: costs and may ideally free up resources for more people’s vulnerability to climate variability and natural
in the West and Kicukiro in the South (KCC 2011). in the recent past, major flooding events occurred in socially and economically productive investment. disasters: for example, the urban poor have to buy
A host of successful government programs, including 1997 and 2006-2009, and major droughts occurred Despite Rwanda’s commitment to climate action, water from vendors at greatly inflated prices during the
a plastic bag ban, improved public waste disposal in 1999 and 2005 (SEI, 2009). decision-makers are hindered by the absence of a dry season and experience higher risk of waterborne
and beautification initiatives, have earned Kigali a credible and locally appropriate evidence base to disease during floods. Investing in infrastructure to
reputation as one of the world’s cleanest cities (UN- Two ‘master plans’ have been developed to guide policy and investment. ensure access to cheap, reliable and safe water therefore
Habitat 2008). In recognition of these achievements conceptualise future growth in Kigali. The first, supports climate resilience and human development.
the city was awarded the UN-Habitat Scroll of Honour completed by Oz Architecture (2007), emphasises This study aims to provide such an evidence base for
Awards in 2008. a need for graded density: lower density in suburban Kigali, and to use this to examine whether there is an This research is intended to inform policymaking and
areas (40 residents per hectare), and higher density if economic case that can be used to secure large-scale programme design both within individual sectors and
The population of the city doubled between 2000 the central business district (250 residents per hectare). low-carbon and climate-resilient investment in the at the city scale. By identifying the most cost- and
and 2010. This rapid urban expansion, coupled with The report also emphasises the need for walkable city. To do this, we map broad trends in energy use, carbon-effective measures, we aim to help government
rising affluence and vehicle ownership, has put public communities and urban development around existing energy expenditure and carbon emissions in Kigali, departments, development agencies, industry and civil
services and infrastructure under increasing stress. transit nodes to maximise connectivity. The Kigali and examine the implications of ‘business as usual’ society organisations to design climate strategies that
Between 2005 and 2011 the stock of private cars more Master Plan 2013, developed by Surbana International development in the city. This provides a macro-level exploit the most economically attractive measures.
than doubled, leading to rising congestion (NISR, Consultants, also emphasises the need for urban context to explore the value of low-carbon measures. This evidence base has the potential to underpin
2012), while dependence on wood and charcoal fuel density, for example by requiring a minimum of We also provide prioritised lists of the most cost- and national applications to international climate funds,
has led to high levels of particulate air pollution in 16 storeys for new developments in the central business carbon-effective measures that could realistically be development banks and other financial organisations,
Kigali and the emergence of a ‘heat island’ effect in the district, and the need for multimodal transit system promoted across the housing, commercial and public thereby helping to unlock and direct large-scale
city (Henninger 2013). Over the period between 2000 based around existing transit nodes. Surbana buildings, transport and waste sectors within the city. investment into low-carbon development.
and 2015, emissions from transport rose at the fastest International Consultants (2013) have also introduced On this basis, the aim is to consider whether there is
rate of any sector (8.9%), followed by the buildings a long-term plan for a bus rapid transit (BRT) system. an economic case for major investments in energy
sector (8.1%) and the waste sector (6.4%). Critically, We hope that this research helps to inform urban efficiency, renewable energy and other low-carbon
and expenditure on energy rose more than tenfold planning in Kigali, ensuring that the Rwandan capital measures across the city, and whether these
within fifteen years. can support the country’s low-carbon, climate-resilient investments have the potential to shift the city on
development strategy. to a lower-cost, lower-carbon development path.
Looking forward, continued economic growth offers
the hope that Kigali will build upon its human
development gains. More than 87% of Kigali residents
are below 40, and are therefore either a member of, or
are soon to join, the workforce. As with cities around
the world, population density permits more efficient
provision of basic services and creates opportunities
for local businesses to collaborate and innovate. At
the same time, poorly managed urbanisation can lead
to urban slums and their associated economic, social
and environmental problems.
12 The Economics of Low Carbon Cities: Kigali, Rwanda The Economics of Low Carbon Cities: Kigali, Rwanda 13Chapter 2. Our Approach
Baseline Analysis Data on energy use by industry is not available
at the city scale in Rwanda.
We start by collecting data that enable us to understand Data on electricity consumption in Kigali by private Data on electricity prices were obtained from the These baselines allow us to estimate future levels and
the levels and composition of energy and water supply customers (excluding industry) and public sector Statistical Yearbooks published in 2013, 2014 and forms of energy supply and demand, as well as future
to, and demand in, Kigali. We do this for a range of customers were obtained in personal communications 2015 and data from the Management of Energy Utility capital costs, household bills and carbon footprints.
different sectors including the energy sector on the from the Rwanda Energy Group. Annual per capita Corporation Limited for 2017 (EUCL). Data on the We compare all future activities against these
supply side and the commercial and public, residential consumption of kerosene, charcoal and fuelwood were price of charcoal and fuelwood were obtained from the baselines. The baselines are reviewed by stakeholder
and transport sectors on the demand side. We also held constant at 52L, 194kg and 366kg respectively, Global Environmental Facility, the Biomass Energy workshops including representatives of government
evaluate the waste sector as it both generates while the number of households using these fuels Strategy, the Rwanda Natural Resources Authority bodies, industry and research institutions. The list
greenhouse gas emissions, and has the potential to were obtained from the Integrated Households and academic sources. Data on the prices of kerosene, of participants is included in Appendix A. More
generate energy. Living Conditions Survey in 2006, 2011 and 2015. LPG and gasoline were obtained from the Biomass detailed explanations of the data sources, methods
Commercial and public consumption of fuelwood Energy Strategy, the World Bank, United Nations and assumptions used to develop the baseline scenario
Data from the Rwanda Environment Management and charcoal in Kigali was projected to increase at a agencies and regional newspapers such as The New are presented in Appendix B.Some of the measures
Authority and Bloomberg New Energy Finance were constant rate, based on levels of consumption in Times and The Independent. Nominal energy prices interact with each other, so their performance depends
used to calculate historical generation, capacity factors 2009 and 2020. All liquefied petroleum gas (LPG) were converted into real energy prices at 2014 levels on whether/to what extent another option is also
and generation efficiency. The baseline scenario was consumed in Rwanda between 2003 and 2007 was using a consumer price index. An annual increase of adopted. For example, the carbon savings from
developed based on planned capacity expansions, assumed to have been consumed in Kigali, and city- 2% in real terms was assumed for all energy prices increasing use of bicycles depends on the impact on
investment costs and anticipated technical losses scale data were subsequently available for 2009 and from 2018 to 2032. modal share of other forms of transport. To take these
through 2017/18, drawn from the Ministry of 2020. Historical growth rates between 2010 and 2015 interactions into account, we calculate the impact
Infrastructure, Japan International Cooperation were projected to continue through to 2032 at the For each of these sectors, and for the city as a whole, of each measure if adopted independently with
Agency, and the Rwanda Environment Authority. same rate. we examine the influence of recent trends in, for business as usual conditions in energy supply. These
example, economic growth, population growth, calculations underpin the figures in the league tables,
Planned infrastructure investments in Kigali are The composition of waste was assumed to remain consumer behaviour and energy efficiency. We then our prioritised menus of different options. When we
drawn from the Kigali City Master Plan and Rwandan constant through 2032: food waste (67%), paper waste develop ‘business as usual’ baselines based on the are determining the potential savings across a sector
Transport Development Authority. Transport mode (16%), garden waste (7%), industrial waste (4%), wood continuation of these trends and the impact of planned or across the city economy, we calculate the effect of
share in Kigali in 2011 was drawn from a revealed waste (3%), textiles (2%) and plastics/metal (1%). Per investments through to 2032. The target year of 2032 each measure on the potential energy savings of other
preference dataset, while the number of trips per day, capita waste production is expected to rise from 1.8 kg was chosen in consultation with stakeholders based measures to develop realistic assessment of their
average vehicle speed, occupancy rates, travel time per day in 2011 to 2.0 kg per day in 2030. Waste on national and city-level plans. National goals and combined impacts. For example, any energy savings
and walking distances by travel mode were drawn disposal methods were drawn from the population and plans are currently structured around Vision 2020, from passive cooling schemes in buildings reduce the
from a hierarchical multimodal transport model. housing censuses of 2002 and 2012. The cost of waste but such a short time period does not offer an adequate mitigation potential of more efficient air conditioners.
The number of trips by private transport is assumed disposal was drawn from the Kigali City Master Plan, timeframe for significant climate action or meaningful
to grow in proportion to vehicle ownership, and the and the characteristics of landfills serving Kigali from economic returns. The year 2032 was therefore
number of trips by bus is assumed to increase with academic sources. selected so that the findings in this report align with
the expected number of buses (in other words, we the Kigali Transportation Master Plan (City of Kigali,
assume occupancy for vehicles is held constant). 2013a) and can inform the implementation of longer-
The proportion of trips made on foot and by heavy term, city-scale master plans (for example, City of
transport was held constant, and trips by motos was Kigali, 2013b).
considered the residual.
14 The Economics of Low Carbon Cities: Kigali, Rwanda The Economics of Low Carbon Cities: Kigali, Rwanda 15Key baseline data and assumptions
Activity Projection method Key data Activity Projection method Key data in 2014
Energy prices Data on electricity prices were obtained from the Grid electricity: RWF Electricity generation Data on existing and historical electricity generation Rwandan electricity grid
Statistical Yearbooks published annually by the 158.0/kWh (residential) and emissions factor is drawn from BNEF (2015) and REMA (2014). emissions factor 2018:
National Institute of Statistics Rwanda (NISR, estimates Plans for new generation and investment costs
2013, 2014, 2015a). Data on the price of charcoal in RWF 149.0/kWh though 2017/18a are drawn from MININFRA 0.39 tCO2e/MWh
2000 and 2005 were obtained from GEF (2005). (industrial) (2011), JICA (2015) and updated through
Rwandan electricity grid
Data on the price of fuelwood in 1995 and 2004 consultation with members of the ministry.
emissions factor 2032
were obtained from Safari (2010). Data on the price Technical and non-technical losses are assumed to
estimate (excluding losses):
of biomass energy, LPG and kerosene in 2008 were Diesel: fall from 23% in 2014 to 15% by 2017 following
obtained from the Biomass Energy Strategy MININFRA (2011). Capacity factors and the 0.41 tCO2e/MWh
(MARGE, 2009a). Data on the price of LPG in RWF 919/L efficiency of generation are calculated based on data
2010 was obtained from Kazoora (2010). Data on from REMA (2014) and BNEF (2015). Electricity
the price of kerosene were obtained from Mukaaya demand through 2032 is drawn from JICA (2015).
(2008), Businge (2015) and – assuming that pump Gasoline:
prices for gasoline were equal to those for kerosene Buildings sector Data on electricity consumption in Kigali by private
between 2000 and 2004 – the World Bank (2015a) customers (excluding industry) and public sector
RWF 989/L
Data on the price of charcoal and fuelwood in 2013 customers were obtained from REG. Electricity
were obtained from Drigo et al. (2013). consumption was projected to continue increasing
at the same rate through to 2032, i.e. 11.2% and
Nominal energy prices were converted into real Charcoal: 16.1% per annum for private and public sector
energy prices at 2014 levels using a consumer price customers respectively.
index from the World Bank (2015b). An annual RWF 166.9/kg
increase of 2% in real terms was assumed for all Per capita consumption of fuelwood and charcoal
energy prices from 2015 to 2032. was obtained from Drigo et al. (2013). Households
depending primarily on charcoal for cooking
Fuelwood:
consumed 194kg/pp/pa, while households
RWF 81.3/kg (residential) depending primarily on fuelwood consumed 366kg/
pp/pa. The average numbers of households using
charcoal and fuelwood respectively as their
preferred cooking fuels were obtained from the
Kerosene: Integrated Households Living Conditions Survey
RWF 1,010/L (NISR, 2006, 2011, 2015b). Data on national
demand for LPG between 2003 and 2007 was
Exchange rates The annual exchange rates between Rwandan USD 1.00 = obtained from MARGE (2009), and we assumed
francs and US dollars between 2000 and 2005 were that all LPG would be consumed in Kigali at this
obtained from the CIA World Factbook (CIA, RWF 870 time. Data on consumption of LPG in Kigali in
2005). The annual midpoint exchange rates 2009 and 2020 under BAU conditions were
between 2006 and 2015 were obtained from obtained from Drigo et al. (2013).
OANDA (2015). The current exchange rate was
obtained from www.xe.com at 12 noon GMT Data on kerosene consumption per household was
23/05/18. drawn from Lights for Life (2015), which estimated
that a household depending on kerosene lamps
would use around 1L per week. Data on the number
of households using kerosene as the primary lighting
source was drawn from the Integrated Household
Living Conditions Surveys (NISR, 2006, 2011,
2015b).
Commercial and public consumption of fuelwood
and charcoal in Kigali in 2009 and 2020 was
obtained from Drigo et al. (2013). Using the
GROWTH function in Excel, we prepared a
baseline where consumption of charcoal was
expected to increase at 6.9% per year and
consumption of fuelwood expected to decrease at
1.7% per year.
16 The Economics of Low Carbon Cities: Kigali, Rwanda The Economics of Low Carbon Cities: Kigali, Rwanda 17Activity Projection method Key data in 2014 Activity Projection method Key data in 2014
Industrial sector Data on employment numbers and annual revenue .3 Waste sector Information on the characteristics of the landfills In 2014, Kigali generated
of individual firms were drawn from Gathani and serving Kigali was drawn from Bazimenyera 880,155 tonnes of waste.
Stoelinga (2013). This report provides an overview (2012a). Waste composition, production per capita
of manufacturing at a national level; firms and disposal methods were drawn from Waste composition:
manufacturing within Kigali were identified Bazimenyera (2012b), UNEP (2013), and the Food: 67%
through online research. The following firms were Rwandan population and housing census’ of 2006 Garden: 7%
included in Figures 4 and 5: Coffee Business and 2011 (NISR 2006, 2012). Cost of waste Paper: 6%
Centre, Rwacof, Rwanda Trading Company, disposal was drawn from the Kigali City Master Wood: 3%
Rwashoscco, Minimex, Sosoma, Bakhresa Grain Plan, City of Kigali (2013). Waste composition is Textiles: 2%
Milling, ICM (one third of operations), Sorwatom, assumed to remain constant through 2032 and to Industrial: 4%
Premier Tobacco Company, Bralirwa (soft drink rise from 1.8 kg per capita per day in 2011 to 2.0 kg Plastic/metal: 1%
processing); Inyange, Skol Brewery, Kigali Cement per capita per day in 2030.
Company, Ameki Color, Ruliba Clays, Safintra,
Simaco/Afrifoam, Tolirwa, Uframetal, Uprotur, Emission factors Emission factors were obtained from the IPCC Emissions Factor Database (2015)
Anik Industries, Kigali Steel and Aluminium and DEFRA (2014). All estimates of emissions from biomass were based on the
Works, Suku Paper Works, Sulfo Industries, default value of fraction of non-renewable biomass for Rwanda, as calculated in
Aqua-San Rwanda, Roto Ltd, Société de Rwandaise CDM (2010) – i.e. 98%.
de Chaussure, Manumental, Mutara Enterprises,
Rwanda Foam and Utexrwa. Where a range was
provided for number of employees or annual
revenue, the midpoint was used.
Transport sector Mode share in Kigali in 2011 is drawn from SSI Mode share 2011:
(2011a) revealed preference dataset. The number of
trips per day, average vehicle speed, occupancy Walking: 9%
rates, travel time and walking distances by travel Private vehicles: 24%
mode are drawn from SSI (2011b), hierarchical Heavy vehicles: 4%
multimodal transport model. Planned Mini-bus: 28%
infrastructure investments in Kigali are drawn from Moto-taxi: 16%
the Kigali City Master Plan, City of Kigali (2013), Bus: 18%
RTDA (2012) and through consolation city and
Business-as-usual
national government officials. To forecast travel
mode share (2032):
demand in 2032 as estimate of total trip demand is
drawn from SSI (2011b). The number of trips by Walking: 9%
private transport is assumed to growth Private Vehicles: 36%
proportionately to the rate of growth of vehicle Heavy Vehicles: 4%
ownership (5.8%) and the proportion of trips made Mini-bus: 16%
on foot and by heavy transport is held constant. The Moto-taxi: 25%
number of trips by bus is assumed to increase with Bus: 10%
the expected number of buses (holding occupancy
constant) and trips by motos is estimated as the
residual.
18 The Economics of Low Carbon Cities: Kigali, Rwanda The Economics of Low Carbon Cities: Kigali, Rwanda 19Identification and Assessment of Measures Electricity sector
Lists of energy efficiency, small-scale renewable energy Some of the measures interact with each other, so
Through an iterative participatory process, involving members of the Rwandan Ministry of Infrastructure,
technologies and other low-carbon measures that could their performance depends on whether/to what extent
Bloomberg New Energy Finance, and energy developers in Rwanda, scenarios were refined to outline six
potentially be applied in the electricity, commercial and another option is also adopted. For example, the
alternative pathways for the electricity sector through 2032 in Rwanda. Each scenario produces a minimum
public, residential, transport and waste sectors in the carbon savings from increasing use of bicycles
of 4500 GWh in 2032 with 1036 MW of dispatchable supply.
city were collected through stakeholder consultation, depends on the impact on modal share of other forms
review of grey and academic literature, and previous of transport. To take these interactions into account, For details of energy generation in 2032 under each scenario, see Table 1.
Climate Smart City studies. we calculate the impact of each measure if adopted
independently with business as usual conditions in
We include both technological and behavioural energy supply. These calculations underpin the figures
measures in our analysis. The long lists of all potential in the league tables, our prioritised menus of different Table 1: Energy generation by scenario (MW)
measures are drawn from extensive literature reviews, options. When we are determining the potential
and then we review these to remove any options that savings across a sector or across the city economy,
are not applicable in a Rwandan context. The outputs we calculate the effect of each measure on the potential
form our shortlists of measures for each sector. These energy savings of other measures to develop realistic JICA
Thermal
shortlists are not necessarily exhaustive – some assessment of their combined impacts. For example, Technology Baseline low Solar 1 Solar 2 Geothermal 1 Geothermal 2
measures may have been overlooked, while others Scenario
any energy savings from passive cooling schemes in cost
may not have been included due to the absence of buildings reduce the mitigation potential of more
data on their performance. efficient air conditioners. Hydro 285.15 113.15 293.15 285.15 190.15 190.15 173.15
Drawing on extensive literature reviews and The options appraisals are then reviewed in Solar 10.75 10.75 10.75 60.75 260.75 10.75 10.75
stakeholder consultations, we determine the net present stakeholder workshops to ensure that they are as
value of each measure on the shortlists, using a real Peat 145 195 145 145 145 145 95
realistic as possible. Lists of all of the measures
interest discount rate of 5%. We consider the capital, considered in the analysis and a detailed explanation Natural 203.6 253.6 278.6 203.6 203.6 128.6 128.6
running and maintenance costs of each measure, of the data sources and assumptions used during gas
focusing on the marginal or extra costs of adopting the options appraisal is presented in Appendix C.
a more energy efficient or lower carbon alternative. Diesel 73.3 73.3 313.75 73.3 69.3 45.3 45.3
We then conduct a realistic assessment of the likely
savings of each option over its lifetime, taking into Geothermal 0 0 0 0 0 100 200
account installation and performance gaps. As Imports 493.5 493.5 3.5 493.5 493.5 493.5 493.5
each measure could be in place for many years,
we incorporate the changing carbon intensities of Sources:
electricity (based on planned investments in the NEF (2015), AFDB (2013), MININFRA (2011), REMA (2014), JICA (2015) and stakeholder consultation.
electricity sector) and assume an average annual
rise of 2% in real prices (including energy).
20 The Economics of Low Carbon Cities: Kigali, Rwanda The Economics of Low Carbon Cities: Kigali, Rwanda 21Table 2: Key technology-specific values (2015-2032 averages) Commercial and public sector
Operating and Measure Costs Savings
Capital cost
Technology Capacity factor maintenance costs
(USD million/MW) Building The incremental costs of improving new The economic savings are based on avoided
(cents per KWh)
energy commercial and public buildings in a investment in, and energy consumption
Hydro 0.75 4.00 0.80 efficiency moderate efficiency scenario cost USD by, air conditioners. We assume the cost
– training 886/m2. These are sub-Saharan Africa of a 5kW air conditioner is RWF707,143,
Methane 0.85 3.70 8.80 workshops wide estimates, refined by climate zone: i.e. proportionate to those of a 3.5kW air
gas we consider Rwanda to fall into the zone conditioner. The total number of air
Solar 0.16 3.00 0.00 of “Only cooling (low and moderate conditioners by 2032 is based on cooling
cooling demand)”. needs of 5W/m2. This is low level of cooling
Peat 0.42 3.20 5.50 reflects Kigali’s temperate climate. Total
amount of retail, office and hotel floor space
Natural 0.85 3.00 0.50 is based on projections from the City of
gas Kigali’s Master Plan.
Diesel 0.61 3.00 27.00 More efficient Incandescent bulbs cost RWF 630.62. Incandescent bulbs have an average input
Imports – case specific 7.50 lighting Compact fluorescent lamps (CFL) cost power of 60W and a life span of 1,200
RWF 2,541. CFL tubes cost RWF 4,109. hours. Compact fluorescent lamps (CFL)
Sources:
Light emitting diodes (LED) cost RWF have an average input power of 14W and a
NEF (2015), AFDB (2013), MININFRA (2011), REMA (2014), JICA (2015) and stakeholder onsultation. 22,671. LED tubes cost RWF 44,521. life span of 10,000 hours. CFL tubes have
The price of a subsidised CFL bulb is an average input power of 25W and a life
RWF 200. We assumed that CFL bulbs span of 8,000 hours. Light emitting diodes
and tubes would entirely replace (LED) have an average input power of 10W
incandescent options by 2030 without and a life span of 50,000 hours. LED tubes
policy interventions. We assume 0% LED have an average input power of 8W and a
market penetration in Kigali in 2015. life span of 40,000 hours.
Solar panels A 250Wp solar panel cost RWF 276,000, so Solar panels are assumed to have a
we assumed a 2.5kWp solar panel cost ten conversion efficiency of 14.5% and life span
times as much. We assumed 3,000 could be of 20 years.
deployed by 2032.
Solar water A 300L solar water heater has an average Installing 12,000 solar water heaters would
heaters cost of US$1,600. The subsidy for a 300L save 23,328MWh per year. We assumed
solar water heater is RWF 279,000, less this was based on equal deployment of
an application fee of RWF 30,000. We 200L and 300L solar water heaters, i.e.
assumed 3,000 could be deployed by a 300L solar water heater would save
2032, in light of scope for substantial 2,332.8kWh per year. We assumed a
uptake in the hospitality industry. lifespan of 15 years.
Street lighting There are three levels of power required Traditional sodium high pressure bulbs
in Rwandan street lights: have a lifespan of 10,000 hours. LED bulbs
have a lifespan of 50,000 hours. Street
– 15 poles with low wattage: 150W bulbs lights are turned on for 12 hours per night.
will be replaced with 80W LED bulbs
– 6251 poles with medium wattage: 250W
bulbs will be replaced with 120W LED
bulbs
– 800 poles with high wattage: 400W bulbs
will be replaced with 200W LED bulbs
Fixtures and lamps for high pressure
sodium bulbs cost USD 250, with an
annualised replacement cost of USD 14.4.
Fixtures and lamps for LED bulbs cost
USD 475, with an annualised replacement
cost of USD 7.2.
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