Public Sector Life Cycle Costing for Asset Management

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Life Cycle Costing for Public Sector Buildings

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  • Life Cycle Costing
    Life Cycle Costing is a process to determine the sum of all the costs associated with an asset or part thereof, including acquisition, installation, operation, maintenance, refurbishment and disposal costs. It is therefore pivotal to the asset management process. Life Cycle Costing incorporates both Life Cost Planning which occurs during development or manufacture and implementation of that plan by Life Cost Analysis as the asset is used or occupied. Life Cycle Costing forms an input to evaluation processes such as Value Management, Economic Appraisal and Financial Appraisal.
  • Let’s begin with a quick overview.
    There are several environmental assessment tools in the market place. Most are in general agreement about what constitute sustainable building practices.
  • Let’s begin with a quick overview.
    There are several environmental assessment tools in the market place. Most are in general agreement about what constitute sustainable building practices.
  • Let’s begin with a quick overview.
    There are several environmental assessment tools in the market place. Most are in general agreement about what constitute sustainable building practices.
  • Let’s begin with a quick overview.
    There are several environmental assessment tools in the market place. Most are in general agreement about what constitute sustainable building practices.
  • Let’s begin with a quick overview.
    There are several environmental assessment tools in the market place. Most are in general agreement about what constitute sustainable building practices.
  • You can see the insulation properties of the 2 types of Low-E products. Triple Low-E provides double the insulation value. Heat Mirror, with a single film, does even better and our double film
  • Building owners tint their glass for esthetics and also to eliminate Solar Heat which we previously talked about. Tinted buildings are all over the city and they generally provide the least amount of natural daylight.
  • Public Sector Life Cycle Costing for Asset Management

    1. 1. 04/21/14 1 March 27 & 28, 2014March 27 & 28, 2014 Toronto, OntarioToronto, Ontario LIFE CYCLE COSTING FOR THE PLANNING, DESIGN, CONSTRUCTIONLIFE CYCLE COSTING FOR THE PLANNING, DESIGN, CONSTRUCTION AND OPERATION OF INTELLIGENT AND GREEN BUILDINGSAND OPERATION OF INTELLIGENT AND GREEN BUILDINGS David Katz, MBADavid Katz, MBA PresidentPresident Sustainable Resources Management Inc.Sustainable Resources Management Inc. Tel: 416 - 493 - 9232Tel: 416 - 493 - 9232 Email: dkatz@sustainable.on.caEmail: dkatz@sustainable.on.ca 6 th Public Sector Life Cycle Costing for Asset Management
    2. 2. 04/21/14 2
    3. 3. 04/21/14 3 Review the LCC issues for GREEN and Intelligent BuildingsReview the LCC issues for GREEN and Intelligent Buildings Examples of applying LCC to Green Building optionsExamples of applying LCC to Green Building options Other life cycle environmental attributes covered under LifeOther life cycle environmental attributes covered under Life cycle analysis and new reporting under Provincial programscycle analysis and new reporting under Provincial programs Examples of LCC for intelligent building choicesExamples of LCC for intelligent building choices Funding for the energy savings and Smart GridFunding for the energy savings and Smart Grid interoperabilityinteroperability Associations and agencies that have programs to help payAssociations and agencies that have programs to help pay for the investments especially if they provide life cyclefor the investments especially if they provide life cycle benefits.benefits. Review your interests and share info on any projects andReview your interests and share info on any projects and challenges of applying life cycle costs under budgetarychallenges of applying life cycle costs under budgetary restraintrestraint AGENDAAGENDA
    4. 4. 04/21/14 4 Intelligent and Green Building InvestmentsIntelligent and Green Building Investments Typical problems that LCC can resolve:Typical problems that LCC can resolve:  Having lower life cycle costs provides the incentive toHaving lower life cycle costs provides the incentive to overcome the lower first cost or budgetary restrictions.overcome the lower first cost or budgetary restrictions.  Building valuations that look at the revenues and theBuilding valuations that look at the revenues and the operating costs are improved by having the loweroperating costs are improved by having the lower operating costs of better facilities.operating costs of better facilities.  Making repairs to existing equipment versus advancingMaking repairs to existing equipment versus advancing the purchase of new better performing equipment thatthe purchase of new better performing equipment that saves energy and may qualify for different utilitysaves energy and may qualify for different utility incentivesincentives
    5. 5. 04/21/14 5 Application to design and construction processApplication to design and construction process  LCC analysis has many applications in the capital asset,LCC analysis has many applications in the capital asset, buildings and infrastructure projects that use the designbuildings and infrastructure projects that use the design and construction process.and construction process.  Choosing the appropriate materials and costing out theChoosing the appropriate materials and costing out the operating and maintenance cost of different alternativesoperating and maintenance cost of different alternatives provides the design and construction professional theprovides the design and construction professional the ability to include the owner’s financial criteria as part ofability to include the owner’s financial criteria as part of the process.the process.  LEED, BOMA BESt and other certification programsLEED, BOMA BESt and other certification programs now require using LCC. These programs also look atnow require using LCC. These programs also look at life cycle assessments for environmental impacts.life cycle assessments for environmental impacts.
    6. 6. 04/21/14 6 Evaluating the alternativesEvaluating the alternatives Evaluation approachesEvaluation approaches Total present valueTotal present value Net present valueNet present value Simple paybackSimple payback True paybackTrue payback Equivalent uniform annual costEquivalent uniform annual cost Rate of returnRate of return KWH savings/investment dollarKWH savings/investment dollar Savings/benefit to investment ratioSavings/benefit to investment ratio Presenting the ResultsPresenting the Results 1.1.Graphic analysis – Cross over pointGraphic analysis – Cross over point 2.2.Bar and Pie ChartsBar and Pie Charts
    7. 7. 04/21/14 7 How do Intelligent and GREEN buildings compliment each other?  Integrated Design approach using Life Cycle CostIntegrated Design approach using Life Cycle Cost principlesprinciples  Building type, Envelope Design and OrientationBuilding type, Envelope Design and Orientation  Energy Modeling – LEED and Green GlobesEnergy Modeling – LEED and Green Globes  H V A C Equipment and Building Automation ImpactsH V A C Equipment and Building Automation Impacts  Operations and Maintenance –ContinuousOperations and Maintenance –Continuous CommissioningCommissioning  Energy Price InflationEnergy Price Inflation  Smart Grid - Distributed Energy, Storage & DemandSmart Grid - Distributed Energy, Storage & Demand Response Programs – Intelligent Load ManagementResponse Programs – Intelligent Load Management
    8. 8. 04/21/14 8 Green Building Perspective • Energy – Efficiency - Metering - Onsite Emergency & Renewable generation – GridWise capable - Demand Response ready – Net Zero • Water – Efficiency – Metering – Treatment – Cleaning- Landscaping • Environmental Management – Storage Tanks - Mold – Maintenance – Operations – Emergency Response - Training • Indoor Environment – Daylighting – CO2 and CO monitoring – IAQ Controls – Filters • Emissions, Effluent and Other Impacts on the Environment Noise – NOX – SO2 – Chemicals – Transportation – Heat Island Roofs
    9. 9. 04/21/14 9 Oil and Gasoline Prices – NEB Site
    10. 10. 04/21/14 10 Natural Gas Price (NEB) Prediction
    11. 11. Wholesale Electricity Prices in Alberta (AESO) and Ontario (IESO) 04/21/14 11
    12. 12. 04/21/14 12
    13. 13. 04/21/14 13 Ontario and Canada Part of North America Smart Grid Electricity and Peak Demand Charges Time of Use Rates Global Adjustment more than Commodity now! 12¢ ? 8¢ ? ????¢ 4.7¢ / 5.5¢
    14. 14. 04/21/14 14 Excerpt Ontario Government Booklet - 2011
    15. 15. 04/21/14 15 Excerpt Ontario Government Booklet - 2011
    16. 16. Life Cycle Costing: Retrofit Applications
    17. 17. 0 10 20 30 40 50 60 70 80 Site Structures Garage Balconies Building Framing Exterior Walls Windows Exterior Doors Roofs Heating and Cooling Ventilation Domestic Water Systems Drainage Plumbing Power Supply & Distribution Lighting Emergency Power Pre-Repair Service Life (yrs) Total Design Life to Replacement (yrs) Based on High-Rise Apartment Repair Needs Assessment CMHC 1998 Age of the building Multi-Residential Building Service Life Approximate design and pre-repair service life of the building elements Conclusions: First costs and rent revenues are only part of the Life Cycle Cost Story. When all the repair items are totaled they may be as much as the cost of the original building.
    18. 18. Typical Building Maintenance Costs Annual building renewal investment (as % of original building cost)
    19. 19. (Source: Energy Cost Savings Council) Conventional Cost Analysis Average Payback Period (PP) and Return on Investment (ROI) on single technology products.
    20. 20. Life Cycle Costing: New Building Design Applications
    21. 21. 04/21/14 21 New Building Design LCC and Sustainable Design TechnologyAn LCC assessment can be used to assess options concerning site design, and material and equipment selection to improve overall building energy efficiency. Typical Sustainable Technology Applications: Green Roofs Greywater recycling Photovoltaics Ground source heat pumps Natural ventilation
    22. 22. Natural corridor and Riparian Zone ECD Energy and Environment Canada Ltd. Native plant species – Bullrushes, Canadian Goldenrod, and Switchgrass Brownfield at mouth of the Keating Channel, Toronto, ON Sustainable Ecosystems Appropriate Site Selection Land that is already municipally serviced or has previously been built upon should be favoured for development over previously undeveloped areas to enhance local ecology and preserved ecologically sensitive areas. Natural Corridors When linked to natural areas, community green spaces can provide valuable wildlife habitat and migration pathways. Site design should encourage interconnected natural areas and wildlife corridors. Light Pollution Reduction Minimizing outdoor lighting, without compromising safety, can significantly reduce environmental threats to nocturnal wildlife species. Native Species Planting Using plants that are native to a site reduces irrigation, lowers pesticide and fertilizer use, and cuts maintenance costs. Site design should ensure 75% of plantings are native. Roadway Naturalization Roadway edges and easements can support plantings that provide habitat for natural corridors and can be designed to reflect topographical and environmental conditions.
    23. 23. Microclimatic Design Building design that maximizes solar access in winter for passive solar heat gain and shades windows in summer; controls wind and snow exposure; insulates against energy loss with green roofs of earth shelters, and promotes green roofs reduces energy consumption, Passive Solar Heating Buildings with sufficient southern exposure can capture sunlight in winter and release it as heat, reducing energy costs. In the summer, trees, window overhangs and sunshades block sunlight, keeping the building cool. Natural or Hybrid Ventilation Buildings may be ventilated and cooled passively if designed to take advantage of temperature/pressure differentials inside and outside the building, thereby creating cross-ventilation. Natural ventilation can be combined with traditional systems in a hybrid design. Solar-Powered Street Furniture Signs, bus shelters, street lights, and parking meters can easily function off-grid with a small solar array. Community-Based Energy Generation Renewable energy comes from non-fossil fuel based sources, like the sun, wind, water or earth. Governments, utilities and individuals should consider these sources both for their environmental sustainability and their stable, long-term costs. ECD Energy and Environment Canada Ltd. Wind turbine at the Canadian National Exhibition, Toronto, ON Photovoltaic curtain wall spandrels Photovoltaic bus shelter Photovoltaic light Vegetated "green" roof, Mountain Equipment Co-op, Toronto, ON South-facing housing, Milton Keynes, UK Sustainable Energy Sources
    24. 24. Eco-Industrial Synergies One company’s waste may be another company’s resource. Encouraging regional economic exchange of by-products and energy leads to increased energy efficiency, reduces pollution, decreases waste volumes, and creates new market opportunities. Adaptive Re-Use of Existing Buildings New buildings consume approximately 50% of all materials produced. Re- using existing structures, or salvaging their materials (such as brick, steel, timber, doors, fixtures, etc) conserves large quantities of resources and helps to preserve existing urban/cultural infrastructure. Recycled Material Use Tires, concrete, asphalt, fly-ash, carpet, ceiling tiles, and metal products can all be recycled for use in urban infrastructure such as roads. Materials in open spaces, such as playground equipment and surfaces, benches, tables, bike racks and signs can be recycled, recyclable or re-usable. Sustainable Material Use The life cycles (or cradle-to-grave environmental effects) of materials should be considered in their selection. Variations in the ways concrete, steel, timber, carpet, etc. are produced, materially composed, used, and disposed of strongly affect their environmental impact. On-site Composting and Recycling Niagara Region has a waste diversion goal of 65% by 2012. For this goal to be realized, areas for the handling, storage and separation of recyclables should be commonplace, and composting should be a priority where food waste is being produced. Gooderham and Worts Distillery District, Toronto, ON ECD Energy and Environment Canada Ltd. Mountain Equipment Co-op, Toronto, ON. Structure consists of salvaged timbers and fly-ash concrete. Sustainable Resource Use
    25. 25. Improved Building Access The energy needed to transport goods and for commuting to building is often equal to the amount of energy needed to operate the building. To reduce energy consumption, access routes for goods should be optimized and walking distances to public transit should be shortened. Pedestrian and Bicycle Traffic Walkable and bikeable communities expand transportation options, diversify neighbourhoods, and reduce reliance on automobiles. Foot and bike paths, denser urban fabric, reduced auto speeds, and sheltered bicycle parking should be a priority. Alternative Parking Arrangements The minimum number of parking spaces required for a development is determined by the peak demand. This can be excessive in some circumstances and options such as parking in lieu and parking on alternative sites may be more desirable. Carpooling Shared vehicle transportation reduces automobile usage and congestion. Convenient pick-ups areas and a voluntary database of occupants’ postal codes help to promote carpooling. Alternative Fuel Re-Fueling Stations Public interest in vehicles fuelled by alternative fuels (such as electricity, natural gas, ethanol and biodiesel) is increasing, but these vehicles need conveniently located re-fuelling stations to grow in number. Hydrogen re-fuelling station, Canadian National Exhibition, Toronto, ON ECD Energy and Environment Canada Ltd. Bike lanes and bike storage facility Designated carpool lot Sustainable Transportation
    26. 26. Desirable and undesirable stormwater management practices Water Table Stream Storm Sewer Impermeable PavingPlanters Permeable PavingBioswale Riparian Zone Stormwater Management Site design should focus on increasing ground infiltration of water and reducing quantity and off-site treatment of run-off. Practices include minimizing impermeable paved surfaces, storing water in catchment systems, increasing vegetation, and creating retention ponds and infiltration basins. Bioswale Design Grassed or vegetated drainage channels, an alternative to traditional curb and gutter stormwater management, retain water and break down road contaminants. Snow Pile Placement Snow piles should be placed away from drainage courses and storm drain inlets to diminish impact of salts and other toxins on stream courses. Riparian Zone Protection Vegetated transition areas between a body of water and upland area control erosion, filter run-off, and provide animal habitat. Innovative Wastewater Treatment Grey-water recycling, composting toilets, constructed wetlands and Living Machines can reduce overall water consumption and reduce BOD content in wastewater to levels lower than those produced through conventional treatment. Bioswale, Water Pollution Control Lab, Portland, Oregon Lving Machine wastewater facility, Nova Scotia ECD Energy and Environment Canada Ltd. Sustainable Water & Wastewater Services
    27. 27. Sample LCC Application to Sustainability Green RoofsDEARBORN, Michigan - Ford is installing an environmentally sound roof on its $2-billion redevelopment of its Rouge River manufacturing complex. Keith Schneider, program director of the Michigan Land Use Institute, praised the green roof plan as innovative, if not a little risky. The new Ford Rouge Center assembly plant construction is one of the largest industrial redevelopment projects in the US. The green approach is designed to save Ford $35 million, when compared with the cost of installing a conventional treatment system, Schneider says.
    28. 28. Greg Kats latest book is based on extensive financial and technical analysis of 150 green buildings across the U.S. and in 10 countries and provides the most detailed findings to date on the costs and financial benefits of building green. 04/21/14 29
    29. 29. Among the study’s key findings: - Green buildings cost roughly 2% more to build than conventional non-green buildings and provide a wide range of financial, health and social benefits.1 - Green buildings reduce energy use by an average of 33%, resulting in significant cost savings. - Green buildings create roughly $1/square foot of value in increased employment by shifting spending from fossil fuel- based energy to more labour intensive domestic jobs in energy efficiency, renewable construction and new green industries. 04/21/14 30
    30. 30. 04/21/14 31 Softcoat LowE Meets the Code and provides lowest first cost. Life cycle cost considerations with simple example
    31. 31. 04/21/14 32 Triple Glazing & Heat Mirror Alternatives cost more – but save more energy
    32. 32. 04/21/14 33 IG Insulating PropertiesIG Insulating Properties Data obtained using L.B.L. (Lawrence Berkeley Laboratories) Window 5.2 analysis program (nfrc/ashae) 2.22 3.45 4.00 8.00 9.09 14.30 - 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 D o u b le (A r 1") H ard L o w -E (A r 1") S o ft L o w -E (A r 1")
    33. 33. 04/21/14 34 IG Solar Heat GainIG Solar Heat Gain CoefficientCoefficient 0.70 0.67 0.38 0.32 0.30 - 0.10 0.20 0.30 0.40 0.50 0.60 0.70 D ouble H ard Low -E SoftLow -E Triple Low -E Sunlite Triple
    34. 34. 04/21/14 35 Reduce Energy Bills (Operating Costs)
    35. 35. 04/21/14 36 Reduce HVAC Requirements (Capital Costs)
    36. 36. 04/21/14 37 Reduced Lighting Requirements (Capital & Operating Costs)
    37. 37. 04/21/14 38 Break-even Analysis using cash flow method $- $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Low E 2 Triple Glazing Heat Mirror
    38. 38. 04/21/14 39 Risk and sensitivity to above analysis.  Fuel Escalation could less than 4% causing Breakeven to be longer  R value energy saving assumptions may not be proportional as assumed.  Solar Gain may have greater energy saving and peak shaving impacts.  Difference in initial HVAC capital costs should also be considered.  Other positive attributes like quiet and no mold may be more valued than energy savings.
    39. 39. 04/21/14 40 Investment Source: Sustainable Building Technical Manual
    40. 40. 04/21/14 41 Comfort
    41. 41. 04/21/14 42 Eliminate Condensation & Mould
    42. 42. 04/21/14 43 Sound Control
    43. 43. 04/21/14 44 Triple Glazing- Optimum Daylighting
    44. 44. 04/21/14 45 Is this Tinted Glass Building Green and Intelligent ? What are the tradeoffs in HVAC, Daylighting & Productivity
    45. 45. 04/21/14 46 Comfort  “The best sustainable designs are not just environmentally responsible. They also produce buildings where employees can thrive and productivity can soar” Christine Ervin President and CEO U.S. Green Building Council  “Using green building strategies can result in increases in occupant performance measures by 6 to 26 percent.” William D. Browning Founder of Green Development Services and Senior Associate of Rocky Mountain Institute
    46. 46. 04/21/14 47 Financial Benefits of Green Buildings
    47. 47. 04/21/14 48 Green and Intelligent Building Convergence Review  Energy management for HVAC, Lighting & Demand Response – CBIP – Energy Star  Green Buildings – Environment - LEED & Green Globe  Access and Security for safety of occupants and visitors  Cabling and Wireless to increase revenue and lower costs  Communications to increase value and productivity  Digital Signage for instant information and advertising  Interconnectivity to other buildings and the community
    48. 48. 04/21/14 49 CABA INTELLIGENT & INTEGRATED BUILDINGS COUNCIL  Developed the BIQ Rating System for IB with Appraisal Institute and EPA Energy Star support  www.caba.org/biq  Life-Cycle Cost Analysis Tool with Reed Construction Data/RSMeans  www.caba.org/lifecycle  Developed a New Intelligent Building Roadmap  www.caba.org/ibrm Who is working on bringing these issues all together to evaluate alternatives and make sound economic choices?
    49. 49. 04/21/14 50  Produced by: Thomas J. Lohner, P.E.  Vice President, TENG Solutions Analyzing the Life Cycle Cost of Integrated Building Systems
    50. 50. 04/21/14 51 Systems Integration - Comparative Life Cycle Cost  You Can Not Afford Not to do it Right
    51. 51. 04/21/14 52 Facility Systems Integration Life Cycle Costs  First Cost  Changes, Additions & Upgrades  Operating & Maintenance  Utility Costs
    52. 52. UPS Computer Room A/C Emergency Generator Fire Management System Door Access Control & Intrusion Detection Lighting Control System HVAC Control System Typical Building Approach to AutomationTypical Building Approach to Automation Main Service Switchgear 5 User Interface Workstations! No Integration !No Integration !
    53. 53. 04/21/14 54 Non-Integrated Building  Engineering Left up to Contractors  Sole Sourcing Required to Provide Integration - $$$$  Stand Alone Systems - Single Purpose  Nobody Responsible for Technology Integration
    54. 54. UPS Computer Room A/C Fire Management System Emergency Generator Main Service Switchgear SNMP over IP Web Server Web Server Web Server Web Server Modbus Web Server Facility IP Network Client FMS Workstation Database Server Partial Integration ConceptPartial Integration Concept HVAC Control SystemLighting Control SystemDoor Access Control & Intrusion Detection Security Console Proprietary Control Sub-systems
    55. 55. 04/21/14 56 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
    56. 56. 04/21/14 57 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.
    57. 57. UPS Computer Room A/C Fire Management System Modbus Emergency Generator Main Service Switchgear SNMP over IP Web Server Web Server Facility IP Network Client FMS Workstation Database Server Full Integration ConceptFull Integration Concept Open Standards Based Control Sub-systems LONTALK - EIA 709.1 & BACNET – ANSI/ASHRAE 135A Door Access Control, Intrusion Detection, Lighting & HVAC Control System Web Server Security Console
    58. 58. 04/21/14 59 Full Integration Issues  Open Standards Applied Where Possible  I/O Servers Minimized  Number of Devices Reduced - Shared Information
    59. 59. 04/21/14 60 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
    60. 60. 04/21/14 61 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; $1500/ Protocol; 50% of 1st year cost for years 2 and up
    61. 61. Life Cycle Cost Analysis Assumptions Dynamic Control Sub- systems Initial Cost ($/SF) Base Year Service Contract ($) Base Year Annual Changes & Modificatons (% of 1st Cost) HVAC Controls $1.5/SF 15,000 2% Lighting Controls $1.0/SF 10,000 3% Power Monitoring $0.5/SF 5,000 1% Intrusion Detection $0.3/SF 3,000 2% Total $3.3/SF 33,000$ $39,000
    62. 62. Comparative First Costs System Component Non- Integrated Building Partial Integration Full Integration Graphical User Interface - Hardware & Software 5 @ $15K 1 @ $20k 1 @ $20k Equipment Networking Uprades 0 4 @ $2k 4 @ $2k Web Servers 0 5 @ $10k 3 @ $10k Control Device Reduction (5%) 0 0 -24750 TOTAL $75,000 $78,000 $33,000 Full Integration Savings $42,000 $45,000 No Account ForDivision 17000 Savings - 20 to 30%!!!
    63. 63. Blinds & 24v Wiring Non-Integrated HVAC, Lighting & Intrusion Detection Echelon World Headquarters VAV Boxes No Occupancy Control Dimmable Lighting Control
    64. 64. Sensor and 120v WiringLighting, HVAC & Occupancy Sensor Control Trunk User Scene Control Switch Integrated HVAC, Lighting, Intrusion Detection & Blind Control Echelon World Headquarters
    65. 65. 04/21/14 66 Changes, Additions and Upgrades Issues  Cost Premium Paid for Additions & Changes to Proprietary Controls  Limit Scope of Future Improvements and Modifications  Cost Premium for Non Competitive Service Contracts
    66. 66. Changes, Additions and Upgrades (Annual Costs- 2nd Year & On ) O & M Cost Issues Non Competitive Cost Premium Non- Integrated Building Partial Integration Full Integration Service Contracts 25% 41,250$ 41,250$ 33,000$ Future Additons & Remodeling 25% 49,500$ 49,500$ 39,600$ Future Software Upgrades 5 @ $1k 1 @ $2k 1 @ $2k Year 7 Replacement Cost Reserve ( 9% APR) 33,629$ 33,629$ 13,452$ Total 129,379$ 126,379$ 88,052$ Full Integration Savings 41,327$ 38,327$
    67. 67. Operating and Maintenance (Annual Costs- 2nd Year & On ) System Component Non- Integrated Building Partial Integration Full Integration Training 11,250$ 5,250$ 3,750$ Improved O & M Staff Efficiency 0 SOFT SOFT IT Support 5 @ $2k 1 @ $3k 1 @ $3k Management Reporting 0 (3 @ $1k) (3 @ $1k) Total 21,250 5,250$ 3,750$ Full Integration Savings $17,500 1,500$ Computerized Maintenace Management 25,000$ First Cost (Extend Major M & E Equipment Life; 25yrs vs 20yrs) Future Worth ($ @ Yr 20) 180,000$ Present Worth (P/F @ 9%) 32,112$
    68. 68. Typical Energy Use Profile Lighting HVAC Power Other HVACHVAC 30% Ave Annual Energy30% Ave Annual Energy UseUse $0.4 / SF / YR$0.4 / SF / YR $60,000 / YR$60,000 / YR LightingLighting 40% Ave Annual Energy40% Ave Annual Energy UseUse $0.53 / SF / YR$0.53 / SF / YR $80000 / YR$80000 / YR PowerPower 25% Ave Annual Energy25% Ave Annual Energy UseUse $0.33 / SF / YR$0.33 / SF / YR $50,000 / YR$50,000 / YR Other (Elevators, etc.)Other (Elevators, etc.) 5% Ave Annual Energy5% Ave Annual Energy UseUse $0.07 / SF / YR$0.07 / SF / YR $10,000 / YR$10,000 / YR TOTALTOTAL $1.33 / SF / YR$1.33 / SF / YR $200,000 / YR$200,000 / YR
    69. 69. Energy Costs (Potential Annual Cost Savings) System Component Savings Factor Energy Cost ($) Non- Integrated Building Partial Integration Full Integration Integrated Lighting & HVAC Control 5% $60,000 0 0 $3,000 Improved Load Factor ( .5 to .55) 5% $200,000 0 $10,000 $10,000 Better Maintained Equipment 1% $60,000 0 $600 $600 Coordinated Supply/Demand EMS Strategies 5% $200,000 0 $10,000 $10,000 Integrated Building Control System Savings $0 $20,600 $23,600
    70. 70. System Integration Life Cycle Cost Summary Life Cycle Cost Component Non- Integrated Building Partial Integration Full Integration Comparitive First Cost $75,000 $78,000 $33,000 Changes, Upgrades & Additions $129,379 $126,379 $88,052 Operating & Maintenance $21,250 $5,250 $3,750 Utility Cost $200,000 $179,400 $179,400 Net Present Value $2,325,232 $2,074,091 $1,773,493 Discount Rate 9% Life Cycle Period (yrs) 10 Savings $551,739 $300,598
    71. 71. 04/21/14 72 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
    72. 72. 04/21/14 73
    73. 73. 04/21/14 74  Ontario Power Authority Integrated Power System Plan  Conservation - LEED – Green Globe –BOMA BESt  Conservation Measures - Technology  Distributed Generation Opportunities  Standard Offers – Renewable – Clean Energy  Demand Response Programs  DR Technologies – Building Sector  Demand Response Shop website  Smart Grid –Building2Grid optimization  Questions Demand Response and BAS Improvements
    74. 74. 04/21/14 75  Previous technologies now economic  New technologies save and measure it  Building Automation more Intelligent  Occupancy, Demand HVAC, Daylighting  LEED and Green Globe Credits  Life cycle costs and low cost of funds  Peak and Energy reduction targets now mandated to each of 74+ Ontario LDC’s Old and New Technologies
    75. 75. 04/21/14 76 Demand Response Technologies  Lighting – Dimming – Occupancy -Daylighting  Raise Cooling Temperature – Casual Day Clothes  Chiller Optimization – Hartman LOOP  Chillers - Gas Driven – Absorption  Thermal Storage – ICE - Water  VSD – Pumps – Fans - Reprogram  On site Generation – Economics?  Windows - Shades -Tinting
    76. 76. 04/21/14 77 NEW- Demand Response #3
    77. 77. 04/21/14 78 Features & Benefits  New Building Automation Systems and Upgrades contribute to energy savings.  New chillers, VSD, Lighting Systems all offer more interoperability and controls  Most incentive programs require a measurement and verification plan as proof  You can’t manage what you can’t measure  Intelligent buildings are GREEN and Sustainable
    78. 78. 04/21/14 79  Federal Government Programs  Ontario Energy Board funding for Enbridge and Union Gas Demand Side Management Ontario Power Authority Conservation Programs LDC and others on www.saveonenergy.ca  Other provincial regulators funding their utility CDM programs – Hydro Quebec and Gaz Metro - Others  Energy Service Companies (ESCO)  Financial Institutions for Leasing or Borrowing  Private energy companies for onsite generation What are the opportunities to get funding for upgrades and retrofit alternatives that provide lower life cycle costs?
    79. 79. 04/21/14 80 Public Sector Incentive Programs  NRCan has a number of building upgrade programs depending on size of building  NRCan has developed new RETScreen tool for energy efficiency  Renewable and Clean generation incentives  Peak Reduction and Demand Response Programs pay for energy management systems that provide controls and M&V
    80. 80. 04/21/14 81 Other Programs Available  Renewable and Clean Standard Offers  Toronto Better Building Partnership  Toronto Atmospheric Fund – Financing  OPA – CDM for all LDC’s (2011-2015)  OPA for Continuous Commissioning and Next Gen Building Automation  Tax credits and Class 43 Accelerated Depreciation on qualified equipment
    81. 81. 04/21/14 82 Financing Options  Self – Finance – Your cost of money  Toronto Atmospheric Fund – Financing  Lease or Rent – morEnergy Options  Low interest loans – Banks and Credit Unions  Energy Service Companies using Performance contracts  Carbon Credits and other Trading Schemes
    82. 82. 04/21/14 83 Contact Info David Katz, MBA, BADavid Katz, MBA, BA Sustainable Resources Management Inc.Sustainable Resources Management Inc. 6 Morning Gloryway6 Morning Gloryway Toronto, OntarioToronto, Ontario Canada M2H 3M2Canada M2H 3M2 Tel: 416-493-9232Tel: 416-493-9232 Fax: 416-493-5366Fax: 416-493-5366 Email: dkatz@sustainable.on.caEmail: dkatz@sustainable.on.ca

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