The document discusses the life cycle cost benefits and multiple benefits associated with deep energy retrofits, particularly in an office building case study. It details financial analyses, including cash flow models, highlighting that while energy cost savings alone may not present a viable business case, these retrofits can lead to significant monetary benefits. Multiple project benefits such as increased property values and productivity improvements contribute to making deep retrofits more appealing to stakeholders.

1.  Jan W. Bleyl – Energetic Solutions and co-authors  For requests: EnergeticSolutions@email.de  18-06-20  Slide 1
Task 16 ”Energy Services”
www.ieadsm.org
16
Deep Retrofit Conference, Ireland, 14 June 2018
Deep Energy Retrofit:
Life Cycle Cost Benefits Analyses and
‚Multiple Benefits‘ on Project Level
Jan W. Bleyl (Austria),
with co-authors: Markus Bareit (Switzerland), Miguel A. Casas (Belgium),
Souran Chatterjee (Hungary), Johan Coolen (Belgium), Albert Hulshoff
(Netherlands), Rüdiger Lohse (Germany), Sarah Mitchell & Mark Robertson
(Canada), Diana Ürge-Vorsatz (Hungary)

2.  Jan W. Bleyl – Energetic Solutions and co-authors  For requests: EnergeticSolutions@email.de  18-06-20  Slide 2
Outline
1. (Motivation, questions and goals)
2. (Method of approach)
3. Case study: Office building deep energy retrofit
dynamic investment analyses
4. ‚Multiple Benefits‘ of building DER on project level
5. Valuation of ‚MPBs‘
6. Discussion and conclusion

3.  Jan W. Bleyl – Energetic Solutions and co-authors  For requests: EnergeticSolutions@email.de  18-06-20  Slide 6
Is building Deep Energy Retrofit a
stand alone business case based on
Energy cost savings alone?

4.  Jan W. Bleyl – Energetic Solutions and co-authors  For requests: EnergeticSolutions@email.de  18-06-20  Slide 7
Office building case study:
Deep Retrofit to ‘Passive House‘ Standard
 Floor area: 1.680 m2; Heat + electricity baseline: 45,000 EUR/a
 CAPEX (for energy retrofit only): 560,000 EUR = 330 EUR/m2
(+ ‚Anyway cost‘: 170 EUR/m2 )
 After DER: Heat cost savings: 88%, electricity cost savings: 17%
Source:[KEA+PassiveHouseInstitute2015]

5.  Jan W. Bleyl – Energetic Solutions and co-authors  For requests: EnergeticSolutions@email.de  18-06-20  Slide 8
-600.000
-500.000
-400.000
-300.000
-200.000
-100.000
0
100.000
200.000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
EUR
total investment project cash-flow (P-CF)
equity cash-flow (E-CF) debt cash flow
cumulative project cash-flow cumulative equity cash-flow
Source:[Bleyl2018]
DER case study LCCBA: Net project & equity
cash flows (annual and cumulative); KPIs
Key performance indicators (KPI):
- IRR: P-CF: 1,9%, E-CF: 0,8%
- NPV: P-CF: -0,06 Mio. EUR, E-CF: -0,08 Mio. EUR
- PBT: P-CF: 21 years, E-CF: 24,2 years

6.  Jan W. Bleyl – Energetic Solutions and co-authors  For requests: EnergeticSolutions@email.de  18-06-20  Slide 9
-2,0
-1,5
-1,0
-0,5
0,0
0,5
1,0
1,5
2,0
2,5
3,0
-50.000
-40.000
-30.000
-20.000
-10.000
0
10.000
20.000
30.000
40.000
50.000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
DSCREUR/a
principal payments interest payment
Cash Flow Available for Debt Service Debt Service Coverage Ratio
Source:[Bleyl2018]
Financing: Debt service, CFADS, DSCR, LLCR
key figures:
- effective interest rate debt capital: 2,52 %
- loan sum: 0,41 Mio.EUR
- interest sum: 0,12 Mio.EUR
- Loan Life Cover Ratio: 1,18

7.  Jan W. Bleyl – Energetic Solutions and co-authors  For requests: EnergeticSolutions@email.de  18-06-20  Slide 10
Sensitivity of project IRR to relative
change of input parameters
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
70% 80% 90% 100% 110% 120% 130%
internalrateofreturnprojectcashflow
change in comparison to the initial value
investment costs (CAPEX)
subsidies/construction cost
grants
operating costs (OPEX)
project duration
saving revenues
price increase factor baseline
equity interest expectation
WACC
Source:[Bleyletal.2017]

8.  Jan W. Bleyl – Energetic Solutions and co-authors  For requests: EnergeticSolutions@email.de  18-06-20  Slide 11
Additional revenues from
Multiple Project Benefits (MPB)?

9.  Jan W. Bleyl – Energetic Solutions and co-authors  For requests: EnergeticSolutions@email.de  18-06-20  Slide 12
‘Multiple Benefits of Energy Efficiency’ (IEA
2014)
Source:[IEA2014]

10.  Jan W. Bleyl – Energetic Solutions and co-authors  For requests: EnergeticSolutions@email.de  18-06-20  Slide 13
Classification of multiple benefits according
to primary beneficiaries
[Source:Bleyletal.2017basedonLazar&Colburn2013]
=> „Multiple Project Benefits (MPB)“

11.  Jan W. Bleyl – Energetic Solutions and co-authors  For requests: EnergeticSolutions@email.de  18-06-20  Slide 16
Results: Monetarily valuated Multiple
Project Benefits (MPB)
Multiple Project Benefits of DER Range
EUR/
(m
2
* y)
NPV:
EUR/m
2
Property
develop.
Occupant
-owner
Lessor
-owner
Lower 10,4 219 219 219
Upper 20,8 439 439 439
Lower 1,2 25 25 -25
Upper 6,4 134 134 -134
Lower 100 [100] [100]
Upper 260 [260] [260]
Lower 0,3 6 6 6
Upper 3,8 79 79 79
Lower 2,1 44 44 44
Upper 3,0 63 63 63
Lower 16,8 354 354 354
Upper 16,8 354 354 354
Lower 16,8 157 157 [157]
Upper 16,8 157 157 [157]
Lower NPV: 100 780 69 554
Upper NPV: 260 1092 197 738
Totals
5a.
Energy cost savings
project term (25 years)
- -
5b.
Add. energy cost savings
over techn. lifetime (40 y.)
- -
3.
CO2 savings
(6 - 79 EUR/t)
- -
4.
Maintenance cost savings
(2.1 - 3 EUR/m2/y)
- -
2b.
Building sales price
increase (2.5% - 6.5%)
100
-
260
2a.
Rental income
increase (1% - 5.3%)
- -
Beneficiaries
Valuation Different owner perspectives
Tenant
1.
Work productivity
increase (0.57% - 1.14%)
- -
Source: [Bleyl et al. 2017]

12.  Jan W. Bleyl – Energetic Solutions and co-authors  For requests: EnergeticSolutions@email.de  18-06-20  Slide 17
Multiple Project Benefits of DER Range
EUR/
(m
2
* y)
PV:
EUR/m
2
Lower 10,4 219
Upper 20,8 439
Lower 1,2 25
Upper 6,4 134
Lower
Upper
Lower 0,3 6
Upper 3,8 79
Lower 2,1 44
Upper 3,0 63
Lower 16,8 354
Upper 16,8 354
Lower 16,8 157
Upper 16,8 157
5a.
Energy cost savings
project term (25 years)
5b.
Add. energy cost savings
over techn. lifetime (40 y.)
3.
CO2 savings
(6 - 79 EUR/t)
4.
Maintenance cost savings
(2.1 - 3 EUR/m2/y)
2b.
Building sales price
increase (2.5% - 6.5%)
100
260
2a.
Rental income
increase (1% - 5.3%)
Valuation
1.
Work productivity
increase (0.57% - 1.14%)
Pecuniary values of DER MPBs
2 Metrics: EUR/m2 => per year & PVs of P-CF
Annotations:
Conservative values!
Present values (PV) of
project cash flows (P-CF)
over 25 years;
1,5%/year price increase;
3% WACC as discount rate.
To compare:
CAPEX (for energy retrofit
only): 330 EUR/m2
Source:[Bleyletal.2017]

13.  Jan W. Bleyl – Energetic Solutions and co-authors  For requests: EnergeticSolutions@email.de  18-06-20  Slide 18
Valuation
Multiple Project Benefits of DER Range
PV in
[EUR/m
2
]
Property
develop.
Occupant
- owner
Lessor
- owner
Lower 219 219 219
Upper 439 439 439
Lower 25 25 -25
Upper 134 134 -134
Lower 100 100 [100] [100]
Upper 260 260 [260] [260]
Lower 6 6 6
Upper 79 79 79
Lower 44 44 44
Upper 63 63 63
Lower 354 354 354
Upper 354 354 354
Lower 157 157 [157]
Upper 157 157 [157]
Lower 100 780 69 554
Upper 260 1092 197 738
Totals
5a.
Energy cost savings project
term
- -
5b.
Add. energy cost savings
over techn. Lifetime
- -
-
3. CO2 savings - -
4. Maintenance cost savings - -
2a. Rental income increase - -
2b. Building sales price increase
Beneficiaries
Different owner perspectives
Tenant
1. Work productivity increase - -
Pecuniary values of DER Multiple Benefits
and accountability to different stakeholders
Source:[Bleyletal.2017]

14.  Jan W. Bleyl – Energetic Solutions and co-authors  For requests: EnergeticSolutions@email.de  18-06-20  Slide 19
SEAI: Discussion and conclusions (1/2)
1. Beyond ‘engineering economics’: LCCBA cash flow model
results provide solid grounds for DER business case
analysis, project structuring, financial engineering …
2. Also supporting policy design, marketing and bridging the
‘language gap’ to investors are important applications.
3. Bad news: CFs from future energy cost savings are not a
stand-alone and bankable business case (not even with 25
years investment horizon).
4. Good news: CFs can co-finance investments substantially
(up to 85% in case study; OPEX to CAPEX)
=> rather small co-financing needed
=> Narrative: “the glas is almost full – just from future savings”

15.  Jan W. Bleyl – Energetic Solutions and co-authors  For requests: EnergeticSolutions@email.de  18-06-20  Slide 20
SEAI: Discussion and conclusions (2/2)
5. DERs generate tangible and quantifiable benefits on the
project level (MPB), e.g. DER office building retrofit: Higher
rents & real estate values, lower maintenance cost & CO2
savings and higher work productivity …
6. These MPBs can offer meaningful contributions to make
DER business cases (very) attractive
7. MPBs can help to identify strategic allies for DER project
development and programs
8. Residential Sector: Preliminary Lessons learned …
MPBs: Increased Comfort, building value, health …
9. Outlook: Similar analyses for residential sector in Ireland?

16.  Jan W. Bleyl – Energetic Solutions and co-authors  For requests: EnergeticSolutions@email.de  18-06-20  Slide 21
Literature reference and webinar
Bleyl, Jan W. et al.
Building Deep Energy Retrofit: Using
Dynamic Cash Flow Analysis and
Multiple Benefits to Convince Investors
in ECEEE Summer Study, paper ID 6-
369, Belambra Presqu'île de Giens,
France June 2017
also accepted for publication in Energy
Efficiency Special Journal 2018
Leonardo ENERGY Webinar:
https://www.youtube.com/watch?v=j3
44zdQTL4I&feature=youtu.be

17.  Jan W. Bleyl – Energetic Solutions and co-authors  For requests: EnergeticSolutions@email.de  18-06-20  Slide 22
Task 16 ”Energy Services”
www.ieadsm.org
16
Thank you!
Questions, remarks and
collaborations welcome!
Task 16 Operating Agent contacts:
Jan W. Bleyl – Energetic Solutions
Lendkai 29, 8020 Graz, Austria
Tel: +43 650 7992820
Email: EnergeticSolutions@email.de
En er get ic
Sol ut ion s
Jan W . Bl eyl