Transcript Document
W1.6: Life Cycle Technology Assessment Wednesday, March 10 8:00 - 9:15 a.m. Thomas M. Keel, M.B.A. Representing CABA 7/7/2015 1 Discussion Topics Introduction Snapshot - Today Trends and Initiatives Major Challenge Major Driver Tomorrow…? 7/7/2015 2 Introduction – CABA IIBC Continental Automated Buildings Association (CABA), Intelligent & Integrated Buildings Council (IIBC) specifically will review opportunities, strategize, take action, and monitor initiatives that relate to integrated systems and automation in the "large building" sector. 7/7/2015 3 Introduction – Task Force 3 CABA Task Force 3 – The Life Cycle Costs of Intelligent and Integrated Buildings The charge: Task Force 3 (TF3) will develop a white paper on the “Life Cycle Costs of Integrated - Open Standards Based Building Technologies” as compared to traditional stand-alone, closed system buildings. The task: to analyze BAS-related costs The goal: to develop verifiable documentation for LCC (time-value of money) comparisons. 7/7/2015 4 Introduction–LCC Definition Section 707 of Executive Order 13123 defines life cycle costs as “…the sum of present values of investment costs, capital costs, installation costs, energy costs, operating costs, maintenance costs, and disposal costs over the life-time of the project, product, or measure.” 7/7/2015 5 Introduction–LCC Definition According to Dell’Isola and Kirk, “…LCC is a technique that satisfies the requirements of owners for adequate analysis of total costs.” Dell’Isola, A. and S. Kirk, Life Cycle Costing for Facilities, Reed Construction Data (page 12) 7/7/2015 6 Introduction–LCC Definition Life Cycle Costing incorporates both 7/7/2015 Life Cost Planning, which occurs during development, and implementation of that plan by Life Cost Analysis as the asset is used or occupied. 7 Introduction - LCCA The life cycle costing analysis (LCCA) method is mandated by Title 10, Code of Federal Regulations 7/7/2015 8 Introduction - LCCA 10 CFR Sec. 436.12 Life cycle cost methodology states: “The life cycle cost methodology for this part is a systematic analysis of relevant costs, excluding sunk costs, over a study period, relating initial costs to future costs by the technique of discounting future costs to present values”. 7/7/2015 9 Introduction - LCCA Guidance on Life-Cycle Cost Analysis Required by Executive Order 13123 April 26, 2000 Section 401 requires that “Agencies shall use life-cycle cost analysis in making decisions about investments in products, services, construction, and other projects to Life Cycle Assessment (LCA) 7/7/2015 10 Introduction – LCC History 1930, Eugene L. Grant, Principles of Engineering Economy. 1933, Comptroller General of the United States, tractor acquisition by predicted total cost after 8,000 hours of operation, General Accounting Office (GAO). 1940 -1950, Lawrence D. Miles, concept of value engineering at the General Electric Company. 1952, AT&T, Engineering Economy. 1950 – 1960, P.A. Stone, in England at the Building Research Station. 1965, Assistant Secretary of Defense published an influential report analyzing DoD contracts. 1971, DoD Directive 5000.1 mandates LCC procurement for major systems. 1972, Comptroller General of the United States issued an exhaustive and devastating report on the life cycle costs for U.S. hospital facilities. 1972, Alphonse J. Dell’Isola, Value Engineering in the Construction Industry. 1973, DoD, Life Cycle Costing Guide for System Acquisition. 1974, Florida and 1975, Alaska became the first states to require LCC 1975, Energy Policy and Conservation Act and the Energy Conservation Act influenced procurement practices. 1975, ASHRAE Standard 90-71 1979, Building Energy Performance Standards (BEPS) National Institute of Standards and Technology (NIST), NIST Handbook 135 – Life Cycle Costing Manual for Federal Energy Management Program. 1981, Alphonse J. Dell’Isola and Dr. Stephen J. Kirk, Life Cycle Costing for Design Professionals. 1999, ASHRAE Handbook HVAC Applications, Chapter 35: “Owning and Operating Costs”. 7/7/2015 11 Introduction Why promote life cycle costing? 7/7/2015 "the bottom line is the bottom line". 12 Introduction – Why this Research Do owners buy technology? 7/7/2015 They buy solutions to their problems. They buy solutions that improve their bottom line. 13 Major Driver Sustainability (EPA, DOE, NIST) 7/7/2015 ASHRAE 90.1, 90.2, 62, 62.2, 55 (ASHRAE.org) LEED (U. S. Green Building Council, usgbc.org) ANSI/MSE 2000, GA Tech Economic Development Institute ISO 1400 (iso.ch) BEPAC 14 Introduction – Why this Research The perception that integrated systems are more expensive to build is a big hurdle. “Smart buildings are generally more expensive to build than conventionally designed buildings. However, the added value of smart building infrastructure results in much lower life-cycle costs…". Design Brief for Smart Buildings, sponsored in part by BOMA, (data from the 1990s). 7/7/2015 15 Introduction – Why this Research Life cycle costing research will substantiate that LCC-based construction is the lowest overall cost of construction. 7/7/2015 16 Introduction - Strategy To develop verifiable documentation for LCC (time-value of money) comparisons To convince owners and developers to employ LCC methodology when buying building automation. 7/7/2015 17 Snapshot - BAS Market North American BCS [building control systems] installation markets were just under $1 billion in 2002. Installation markets include: application engineering, system installation, system start up and calibration, and customer onsite training. Source: Ron Caffrey and Terry McMahon, BCS Partners, Leonia, NJ 7/7/2015 18 Snapshot - BAS Market Almost 10% of U.S. nonresidential buildings have automated energy management. Over 500,000 ft2 = 70% + 200-500,000 ft2 = 55% 100-200,000 ft2 = 50% Source: Ron Caffrey and Terry McMahon, BCS Partners, Leonia, NJ 7/7/2015 19 Snapshot – BAS Forecast By 2007, the North American building controls market could approach $4 billion (worldwide almost $13 billion). Adding fire alarm, intrusion detection, and access control brings the worldwide market for indoor environment regulation and security to nearly $22 billion for nonresidential buildings. Source: Ron Caffrey and Terry McMahon, BCS Partners, Leonia, NJ 7/7/2015 20 Trends and Initiatives The Building Controls industry has made great strides in the creation of communications standards. Both BACnet and LonTalk are now viable, commercially accepted solutions that provide owners with open communications. 7/7/2015 21 Trends and Initiatives BACnet has worldwide support and is maintained by a professional society under rules that provide open access and cannot be dominated by companies with particular commercial interests. LonTalk® certification program is limited to devices that contain a defined interface. Both software and hardware are the end-certified products. Only LonMark® Partner and Sponsor Members can have products certified. 7/7/2015 22 Trends and Initiatives The ever lowering cost of Ethernet / TCP/IP / XML communications is finding its way into our industry. XML: The mission of the CABA Open Building Information Xchange (oBIX) is to work cooperatively in an open environment to create a non-binding guideline for the use of Internet communications standards such as XML and Web Services for use in broad facility management. 7/7/2015 23 Trends and Initiatives Create an open, non-proprietary specification www.ctrlspecbuilder.com © 2003 Automated Logic Corporation 1150 Roberts Blvd., Kennesaw, Georgia, 30144 USA The document, a Microsoft® Word file, is based on ASHRAE Guideline 13-2000: Specifying Direct Digital Control Systems and follows the Construction Specifications Institute (CSI) MasterFormat—Division 15 Mechanical, Section 15900 HVAC Instrumentation and Controls to create an open, non-proprietary specification for building automation systems. 7/7/2015 24 Analyzing the Life Cycle Cost of Integrated Building Systems Produced by: Thomas J. Lohner, P.E. Vice President, TENG Solutions 7/7/2015 25 Systems Integration Comparative Life Cycle Cost You Can Not Afford Not to do it Right 7/7/2015 26 Facility Integration Life Cycle Costs First Cost Changes, Additions & Upgrades Operating & Maintenance Utility Costs 7/7/2015 27 Typical Buildig Approach to Automatio No Itegratio 5 User Iterface ! Emergency Generator Workstatios ! Main Service Switchgear Computer Room A/C UPS Fire Management System 7/7/2015 Door Access Control & Intrusion Detection Lighting Control System HVAC Control System 28 Non-Integrated Building Engineering Left up to Contractors Sole Sourcing Required to Provide Integration - $$$$ Stand Alone Systems - Single Purpose Nobody Responsible for Technology Integration 7/7/2015 29 Partial Proprietary Control Sub-systems Itegratio Clie Cocept FMS t SNMP over IP Computer Room A/C Workstatio Datab ase Serve r Main Service Switchgear Web Serve r Facility IP Network Secu rity Coso le Web Serve r Modb us Emergency Generator Web Serve r Web Serve r Web Serve r UPS 7/7/2015 Fire Management System Door Access Control & Intrusion Detection Lighting Control System HVAC Control System 30 Partial Integration Issues Software Integration on IP networks Use Web Enabled - FMS Application Program Methodology Employed for Existing Buildings Hardware Intensive - Many I/O Servers 7/7/2015 31 BENEFITS Partial Integration Single User Interface for all Systems Web based GUI - Defacto Standard Permits Migration to Open Control Networks - Competitive Bids ! Permits Development of Campus Wide Relational Database Database Permits - Maintenance Management , Energy Management , Asset Management, etc. 7/7/2015 32 Full Itegratio Open Standards Based Control Sub-systems Cocept Clie t SNMP over IP Computer Room A/C FMS Workstatio Facility IP Network Secu rity Coso le Web Serve r Datab ase Serve r Modb us Main Service Switchgear Web Serve r Emergency Generator Web Serve r LONTALK - EIA 709.1 & BACNET ANSI/ASHRAE 135A UPS 7/7/2015 Fire Management System Door Access Control, Intrusion Detection, Lighting & HVAC Control System 33 Full Integration Issues Open Standards Applied Where Possible I/O Servers Minimized Number of Devices Reduced - Shared Information 7/7/2015 34 BENEFITS Full Integration Same as Partial Integration Approach PLUS Competitive Bids in each Building Integrated Building Sub-systems Lighting, HVAC, Power Management and Security Lowest Life Cycle Cost Approach 7/7/2015 35 Life Cycle Cost Analysis Assumptions 150,000 SF Building Major M & E Equipment Cost - $6.00/SF ($18.00/SF TOTAL) Proprietary Systems Life Cycle - 7 years (FAR) Replacement Cost = 125% of the Initial System Cost 50% of the Proprietary Systems are Replaced (Next Generation) 20% of the Open Systems are Replaced (Age & Obsolescence) Average Cost per Control Device - $400 Open and Proprietary Control Devices Base Bid Costs are the Same Training Costs - $3000/ GUI; $1500/ Protocol; 50% of 1st year cost for years 2 and up 7/7/2015 36 Life Cycle Cost Analysis Assumptions Dynamic Control Subsystems HVAC Controls Lighting Controls Power Monitoring Intrusion Detection Total 7/7/2015 Base Year Base Year Annual Initial Service Changes & Cost Contract Modificatons ($/SF) ($) (% of 1st Cost) $1.5/SF $1.0/SF $0.5/SF $0.3/SF $3.3/SF 15,000 10,000 5,000 3,000 $ 33,000 2% 3% 1% 2% $39,000 37 Comparative First Costs System Component Graphical User Interface Hardware & Software Equipment Networking Uprades Web Servers Control Device Reduction (5%) NonIntegrated Partial Building Integration Full Integration 5 @ $15K 0 0 0 1 @ $20k 4 @ $2k 5 @ $10k 0 1 @ $20k 4 @ $2k 3 @ $10k -24750 TOTAL $75,000 $78,000 $33,000 Full Integration Savings $42,000 $45,000 No Account For Division 17000 Savings - 20 to 30%!!! No-Itegrated HVAC, Lightig & Itrusio Detectio Echelo World Headquarters Dimmable Lighting Control VAV Boxes No Occupancy Control Blinds & 24v Wiring Itegrated HVAC, Lightig, Itrusio Detectio & Blid Cotrol Echelo World Headquarters User Scene Control Switch Lighting, HVAC & Occupancy Sensor Control Trunk Sensor and 120v Wiring Changes, Additions and Upgrades Issues Cost Premium Paid for Additions & Changes to Proprietary Controls Limit Scope of Future Improvements and Modifications Cost Premium for Non Competitive Service Contracts 7/7/2015 41 Changes, Additions and Upgrades (Annual Costs- 2nd Year & On ) O & M Cost Issues Service Contracts Future Additons & Remodeling Future Software Upgrades Year 7 Replacement Cost Reserve ( 9% APR) Total Full Integration Savings Non Competitive NonCost Integrated Partial Full Premium Building Integration Integration 25% $ 41,250 $ 41,250 $ 33,000 25% $ 49,500 $ 49,500 $ 39,600 5 @ $1k $ $ $ 33,629 1 @ $2k 1 @ $2k $ 33,629 $ 13,452 129,379 $ 126,379 $ 88,052 41,327 $ 38,327 Operating and Maintenance (Annual Costs- 2nd Year & On ) System Component NonIntegrated Partial Building Integration Training $ 11,250 Improved O & M Staff Efficiency 0 IT Support 5 @ $2k Management Reporting 0 Total 21,250 Full Integration Savings $17,500 $ 5,250 SOFT 1 @ $3k (3 @ $1k) $ 5,250 $ 1,500 Computerized Maintenace Management $ (Extend Major M & E Equipment Life; 25yrs vs 20yrs) Future Worth ($ @ Yr 20) $ Present Worth (P/F @ 9%) $ Full Integration $ 3,750 SOFT 1 @ $3k (3 @ $1k) $ 3,750 25,000 First Cost 180,000 32,112 Typical Energy Use Profile Other (Elevators, etc.) 5% Ave Annual Energy Use Power 25% Ave Annual Energy Use $0.07 / SF / YR $10,000 / YR $0.33 / SF / YR Lighting HVAC Power Other $50,000 / YR HVAC Lighting 30% Ave Annual Energy Use 40% Ave Annual Energy Use $0.4 / SF / YR $0.53 / SF / YR $60,000 / YR $80000 / YR TOTAL $1.33 / SF / YR $200,000 / YR Energy Costs (Potential Annual Cost Savings) System Component NonSavings Energy Integrated Factor Cost ($) Building Partial Integration Full Integration Integrated Lighting & HVAC Control Improved Load Factor ( .5 to .55) Better Maintained Equipment 5% 5% 1% $60,000 $200,000 $60,000 0 0 0 0 $10,000 $600 $3,000 $10,000 $600 Coordinated Supply/Demand EMS Strategies 5% $200,000 0 $10,000 $10,000 $0 $20,600 $23,600 Integrated Building Control System Savings Conclusion: Full Integration will Result in the Lowest Net Present Value The Value of the Integrated Approach will Increase w/ IT Advances Information will be your Competitive Advantage 7/7/2015 46 System Integration Life Cycle Cost Summary NonIntegrated Partial Full Life Cycle Cost Component Building Integration Integration Comparitive First Cost Changes, Upgrades & Additions Operating & Maintenance Utility Cost $75,000 $129,379 $21,250 $200,000 Net Present Value $2,325,232 Discount Rate 9% Life Cycle Period (yrs) 10 Savings $551,739 $78,000 $126,379 $5,250 $179,400 $33,000 $88,052 $3,750 $179,400 $2,074,091 $1,773,493 $300,598 Next Steps IIBC TF – 3 (Develop LCC Model) Building Construction Delivery 7/7/2015 Who is responsible for Technology?? Integrated Systems must be designed Performance Specs are not adequate Owners must require as a deliverable 48 TF – 3 Major Challenges Locating the data sources The need for relevant quality data It is costly and time-consuming to collect. Verifying the validity of the data Sorting out design-bid-build projects from design-build Not measuring LCC and VE that resulted in: 7/7/2015 Cheaper components Reduced functionality 49 Case Study 7/7/2015 50 GSA Federal Complex - Region 5 One of TENG’s/World’s Largest Example of Open Building Automation Migration to LonWorks began in 1996 HVAC, Lighting, Power, Security 2000+ Control Products, 15,000+ points Based on EIA Standard 709.1 (LonTalk) Over 2.5 Million Sq. Ft. (3 facilities) 6 Different Contractors, 14 Manufacturers, 6 Construction Phases GSA WAN Connectivity 7/7/2015 Chicago, Illinois 51 LCC Impact Implementation Cost: $8,000,000+ over 7 years Savings Estimate: Energy, Replacements, Manpower, Service Contracts, Software Energy $12,000/day Utility Costs 20% Savings - $2400/day - $876,000/year Achieved Presidential Mandate 1 Year Ahead of Schedule Replacements Less Than $100,000 over 7 years Savings - $4,000,000 (3-7 year lifecycle) 7/7/2015 Conservative Estimate (1/2 of Installed Cost) 52 LCC Impact Manpower $4800/Day Direct Labor (10 x $20 x 24) 20% More Efficient - $960/day - $350,400/year Service Contracts Savings - $100,000+/Year Software Savings - $50,000+/Year Conservative (4 year basis) Total Savings: $10,907,200 7/7/2015 53