Transcript ceecorg.eu

May 24, 2006
Introduction
to
LIFE CYCLE COSTING (LCC)
Based on ASTM Building Economics
Standards
Presented by:
Robert Charette
Hosted by:
Harvard Green Campus Initiative
1
Outline
1. The Notion of Life Cycle Costing
2. Data Requirements
3. Present Value Factors
4. Calculating Life Cycle Costs - Examples
5. Supplementary Evaluation Measures - Examples
6. Integrating LCC in the Design Process
2
1. The Notion of
Life Cycle Costing
3
Life-Cycle Cost Analysis
(LCCA)
A method of economic analysis that sums
up, over a given study period, all relevant
costs of a building, building system, or
building component, in present value (PV)
dollars, today’s dollar.
4
Initial Cost – Office Building - $100 / SF
% of Total Building Cost
Uniformat Categories:
01 Foundation
02 Substructure
03 Superstructure
04 Exterior Closure
05 Roofing
06 Interior Construc.
07 Conveying System
08 Mechanical:
Plumbing
HVAC
Fire Protection
09 Electrical
11 Equipment
12 Sitework
5%
10%
20%
15%
3%
3%
17%
12%
1%
15%
5%
5%
16%
3%
12%
4%
4%
Source: Means Life Cycle Costing For Facilities
5
Life Cycle Cost – Office Building - $200 / SF
Initial Cost
Operational Cost
Life Cycle Cost – Present Value $ / ft2
Uniformat Categories:
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
01 Foundation
02 Substructure
03 Superstructure
04 Exterior Closure
05 Roofing
06 Interior Construc.
07 Conveying System
08 Mechanical:
Plumbing
HVAC
Fire Protection
09 Electrical
11 Equipment
12 Sitework
Source: Means Life Cycle Costing For Facilities
6
ASTM Standards
Present Value Factors (4) – E917
SPV
UPV
SPV*
UPV*
Evaluation Measures (4)
NS – E1074
SIR – E964
AIRR – E1057
DPB – E1121
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2. Data Requirements for LCC
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Data Requirements for LCC
A. Investment costs
B. OM&R costs
C. Cyclical renewal costs
D. Financial criteria
d – discount rate %
e – escalation rate %
n – study period years
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3.Present Value Factors
10
Four Present Value Factors
From Financial Tables
1. SPV - Single Present Value (w/o escalation)
2. UPV - Uniform Present Value (w/o escalation)
3.
SPV* - Modified Single Present Value
(with escalation)
4.
UPV*- Modified Uniform Present Value
Value (with escalation))
11
4.Calculating Life Cycle Costs
12
Example – LCC of Competing
Heating / Cooling Systems
• System A: Electric baseboard and
window air conditioner
• System B: Heat Pump
Financial Criteria:
Discount Rate d = 8%
Energy Escalation ee = 6%
Maintenance Escalation em = 5%
Study Period N = 15 years
13
System A: Electric Baseboard
and Window Air Conditioner
 Investment Related Costs
Initial Cost – Io
$1,500
Replacement Cost Year 8 (Base Yr $)
Residual Value (Year 15 $)
$400
$150
 Operation Related Costs
Base Year Electric Energy Cost
$1,200
Base Year OM&R Cost $50
14
LCC System A
PV
Investment
Costs
+
PV
Operational
Costs
= $1,772 + $16,156 = $17,927
15
LCC System B
PV
Investment
Costs
+
PV
Operational
Costs
=$3,384 + $12,798 = $16,182
LCC System B $1,745 less or 10% less
16
5. Supplementary Evaluation
Measures
17
Four Supplementary Evaluation
Measures From Financial Tables
1. Net Savings - (NS) E1074
2. Savings-to-Investment Ratio - (SIR) E964
3. Adjusted Internal Rate of Return - (AIRR) E1057
4. Discounted Payback - (DPB) E1121
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Example - NS, SIR, AIRR, DPB
Attic Roof Insulation – R11 to R19
Additional Investment Cost – I $1500
Annual Energy Savings – A0
$260
Financial Criteria:
d = 8% ee = 6% N = 30 yrs
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Suplementary Evaluation Measures
Additional Investment of $1,500 for Insulation
1. Net Savings (NS)
$4,420
2. Savings-to-Investment Ratio (SIR)
3.9
3. Adjusted Internal Rate of Return (AIRR)
13%
4. Discounted Payback (DPB)
6.2 years
20
6. Integrating LCC in the Design
Process
21
Integrating LCC into the Design
Process
22
Part of the Solution
An Integrated Design Process with all stakeholders that
includes at the Schematic Phase:
----------------------------------------------------------------------------
• A Baseline Preliminary Project Description (PPD) in
accordance with CSI/CSC Practice FF/180
• An Elemental Cost Estimate With Analytic Parametrs
• An Energy Analysis Simulation Model
23
©
The Construction Specifications Institute
Manual of Practice FF/180
Chart 3.4 Preliminary Project Description (PPD)
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Table 4.3 UNIFORMAT II Elemental Cost Summary for Buildings
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25
Baseline Energy Simulation
• kWh / SF vs targeted energy budget
• Identify energy drivers
• Identify alternatives to be evaluated
26
Summary
1. The Notion of Life Cycle Costing
2. Data Requirements
3. Present Value Factors
4. Calculating Life Cycle Costs - Examples
5. Supplementary Evaluation Measures - Examples
6. Integrating LCC in the Design Process
27
End
Robert Charette, PE, CVS
[email protected]
www.lifecyclecosting.org
514-739-3522
Harvard Green Campus Initiative
www.greencampus.harvard.edu
617-496-1278
28