Pre-commercial procurement brings smart light to EspooThe City Planning Department of Espoo received a special commendation for its smart lighting procurement in Motiva’s Sustainable Public Purchaser 2015 contest. This acquisition promotes the development of new technology, the well-being of the residents along with the energy efficiency of lighting.
In the autumn of 2013, the City Planning Department of Espoo launched a pre-commercial procurement process for a smart LED lighting system to allow start-up technology companies to develop their technologies. The EU-funded ENIGMA project, which aims to advance the development of the lighting market, to act as a catalyst for businesses in their new product development and to improve public lighting by utilising new technologies, provided financial support for the development and the implementation of the procurement procedure.
A pre-commercial procurement procedure is appropriate for use where a needed solution is not yet available in the market. This procedure also divides the product development costs between businesses and procurement parties.
First pre-commercial lighting procurement in Finland
The City Planning Department had no previous experience of pre-commercial procurement. Pre-commercial procurement is uncommon in Finland, and this was the first in the field of lighting. “One of our goals was to learn to use pre-commercial procurement (PCP) in the acquisition of innovation,” says Mr. Jussi Lehtinen from Espoo's City Planning Department.
The procurement is carried out in three phases. The first step is to choose eight businesses, which will receive funding for the development of their own solutions. In the second phase, five businesses will make prototypes and, finally, two businesses are selected to carry out the lighting project. This procedure allows as many small businesses as possible to develop their technological solutions.
To initiate a market dialogue, an event was organised in spring 2014 to which a number of promising lighting, automation and ICT businesses were invited to discuss the project objectives and to share their insights with researchers and the City of Espoo. These discussions made it clear that the traditional lighting businesses were not necessarily in a position to meet the challenge this project posed. To develop an innovative lighting solution, the collaboration of small engineering companies on the one hand and experts in the field of lighting aesthetics on the other were needed.
The goal: an attractive and safe urban environment
Before the needs and goals could be defined, decision-makers, officials and residents of the City came together at a two-day event to discuss the current situation and possible future lighting solutions for the area.
“The project aims to improve the appearance and appeal of the parks, market squares and other public spaces. We want to be able to apply lighting solutions tailor-made to the various spaces, situations, seasons or times of the day. Our goal is to have the system learn to adjust the light without remote control,” Mr. Lehtinen explains.Pre-commercial procurement provides a framework where the purchaser can participate in the product development and steer it in the desired direction.
In this process, the success of businesses is evaluated using various criteria. The greatest weight was placed on social impact, in other words, how a lighting solution affects the well-being and safety of people. The Otaniemi campus in Espoo was chosen as the pilot area. Its special features as a junction of public transport and a future station of the western metro line were taken into account when defining the needs of the planned lighting solution.
In order to gain experience in smart lighting systems, the City of Espoo, in the late summer of 2014, acquired for the lighting of pedestrian and bicycle traffic in Otaniemi’s Otakaari a dynamic control system developed by a promising Finnish start-up, Lumine Lighting Solutions.
The smart lighting system to be developed as an ENIGMA project will be installed in Otaniemi in 2017. The system is expected to consume some 70-90 per cent less energy than a traditional solution.
For its pre-commercial lighting procurement, the City Planning Department received a special commendation in the Sustainable Public Purchaser contest in spring 2015. The jury found this procurement to be a great example of how a public purchaser may play a vital role in the development of products and markets.
According to Jussi Lehtinen, the desire of the City to act as a pioneer in utilising innovation to improve the well-being of its residents was an important factor when deciding on the project. The EU funding, covering 75 per cent of the cost of the pilot project, also played a significant role. Lehtinen encourages other purchasers to also make more active use of the EU’s funding resources in order to realise demanding procurements.
When to use pre-commercial procurement
Where the market does not offer a ready-made product or service that meets the procurement needs and the current demand is not sufficient to encourage businesses to start development at their own risk, a public purchaser can use competitive bidding for research and development.
Pre-commercial procurement is also aimed to generate more demand for a product or service to be developed. For businesses, such procurement can provide an environment for product development along with close collaboration with top users, which facilitates their entry to the market. Pre-commercial procurement targets the purchasing of research and development.