Jerry Percy, Global Environmental Manager, Nokia

1. 1 © Nokia 2015
Internalising the Externalities
Life cycle costing of energy savings opportunities
Jerry Percy
19th April 2016
Public

2. 2 © Nokia 2015
1871 1965 1987 1992 2006 2014
A long history of successful change

3. 3 © Nokia 2015
To expand the human
possibilities of the
connected world

4. 4 © Nokia 2015
The shift to the Programmable World is already underway

5. 5 © Nokia 2015
An innovation leader for
an IP connected world

6. 6 © Nokia 2015
Global Portfolio
Nokia Internal Use
• ~2.5 Million sqm
• ~800 buildings

7. 7 © Nokia 2015
Impact of synergies

8. 8 © Nokia 2015
Sustainable and cost effective approach to energy
management
• Using data to fully understand the impact of energy
• Turning quality data into information to make informed business
decisions
• Understanding to complete cost picture when implementing cost
savings
• Determining the right return on investment
• Understand the external influences
• Evaluate and quantify externalities

9. 9 © Nokia 2015
• Legislation
• Lease types and length
• Environmental taxation and incentives
• Mandatory carbon emissions trading schemes
• Supplier obligations
• Inability to capitalise running cost savings
• Higher relative capital costs for LZCs
• Volatile price of carbon
• Social barriers
Drivers and barriers to energy efficiency

10. 10 © Nokia 2015
Whole Life Value & Life Cycle
Costs

11. 11 © Nokia 2015
• Lifecycle
• Maintenance
• Sustainability
• Operation
• Facilities Management
• Occupancy
• Energy
• Disposal
• Third Party
• Carbon
• End Of Life
Whole Life Value

12. 12 © Nokia 2015
SCOPE
Understand
requirements
and objectives
of the Client and
theProject
DEFINE
Identify options
and explore
benefits
GENERATE
Creation of
Whole Life Plans
for review and
refinement
REVIEW
Test Plans for
most beneficial
long term
profile
IMPLEMENT
Incorporate
Plans in design,
construction
and operational
phases
WHOLE LIFE VALUE
LIFE CYCLE COSTING
BS-ISO 15686-5:2008
•Construction
•Maintenance
•Operation
•Occupancy
•End-Of-Life
•Non-Construction
•Income
•Externalities
LIFE CYCLE ASSESSMENT
BS-EN-ISO14040/14044:2006
•Goal and Definition
•Inventory Analysis
•Impact Assessment
•Interpretation
WHOLE LIFE FACTORS
•Corporate Strategy
•BREEAM
•Sustainability
•Carbon Management
•AssetManagement
•Whole Life Monitoring
•Taxation
•Financial Modelling
RIBA B/C, RIBA D/E, In-Use
WHOLE LIFE VALUE - PLANNING PROCESS
Whole Life Value

13. 13 © Nokia 2015
WHOLE LIFE
FACTORS
•Corporate Strategy
•BREEAM
•Sustainability
•Carbon Management
•Asset Management
•Whole Life Monitoring
•Taxation
•Financial Modelling
• Primary Whole Life Value layer
• Strategic approach
• Corporate Responsibility
• Scene setting
• Carbon strategy
• Asset planning
• Financial Modelling
Whole Life Value

14. 14 © Nokia 2015
LIFE CYCLE
COSTING
BS-ISO 15686-5:2008
•Construction
•Maintenance
•Operation
•Occupancy
•End-Of-Life
•Non-Construction
•Income
•Externalities
• Secondary Whole Life Value layer
• Asset Delivery
• Asset Management Plan
• Occupy - In Use - Disposal
• Key Client outcomes
• Tax allowances
Whole Life Value

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LIFE CYCLE
ASSESSMENT
BS-EN-ISO
14040/14044:2006
•Goal and Definition
•Inventory Analysis
•Impact Assessment
•Interpretation
• Tertiary Whole Life Value layer
• Environmental Management
• Embodied Carbon
• Occupy - In-Use - Disposal
Whole Life Value

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YEAR
Base date End dateWHOLE LIFE STUDY PERIOD
Life Cycle Costs and Facility Management
Planning
Constructio
n
0 5 10 15 20 25
0
-10
-20
-30
Etc.
+10
+20
+30
+40
+50
+60
+70
+80
+90
+100
COSTS
£ ,000
BENEFITS
Residual Value
Initial
Investment
Periodic replacement costs (Life Cycle Costs)
Maintenance costs (F.M. Costs)
Energy costs (Running Costs)
Whole Life –v- Life Cycle Costing

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Whole Life Value

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-£20,000
-£15,000
-£10,000
-£5,000
£0
£5,000
£10,000
£15,000
£20,000
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 26 27 28 29 30
DiscountedPaybackCost
Year
Payback Breakeven Point
Option 3 Option 2 Option 1
Capital –v- Life Cycle

19. 19 © Nokia 2015
£
Costofraising
standards
Improvement Level
Cost to Comply
Incentive through
Compliance
Taxation impact
breakeven point
Economic value
threshold
Potential additional
costs of achieving
higher performance
Benefit
Benefit
Taxation
regime
impact
Making an informed decision

20. 20 © Nokia 2015
 Largely cultural
 Profit Centres within a company can engender a competitive
approach, which undermines the collaborative spirit required to
achieve optimum whole life cost solutions
 The competitive nature of the industry means that information about
long-term performance and feedback is not shared
 Limited sources of reliable durability data
 Few companies with the range of skills to carry out the work
Common pitfalls

21. 21 © Nokia 2015
Environmental
Social
Economic
Wellbeing
Local
Economy
Materials Employment
Training
Energy
Waste
Water
Stakeholders
Supply
Chain
Brand
Community
Welfare
Security
Resources

22. 22 © Nokia 2015
Environmental
Social
Economic
Wellbeing
Local
Economy
Materials Employment
Training
Energy
Waste
Water
Stakeholders
Supply
Chain
Brand
Community
Welfare
Security
Resources

23. 23 © Nokia 2015
LED
Lighting
Environmental
Social
Economic
Wellbeing
Local
Economy
Materials Employment
Training
Energy
Waste
Water
Stakeholders
Supply
Chain
Brand
Community
Welfare
Security
Resources

24. 24 © Nokia 2015
Measuring Sustainability
Stakeholder & Customer
Relations Drainage & Flooding
Cultural Heritage
Land Use
Bio -
diversity
Landscape & Visual Impact
Pollution & Nuisance
Geology and Soils
Climate Change
Energy
Material Use
Waste
Renewable Resources
Training & Development
Water Use
Community
Local Economy
Fair Competition & Trade
Supply Chain
Brand Value & Reputation
Employment
& Skills
Asset Value
Travel & Transport
Human Rights & Ethics
Accessibility
Social Inclusion
WelfareHealth, Safety
& Well Being
Amenities & Recreation
Crime &
Security
Stakeholder Engagement
Whole Life Value
Profit Improvement 0
1
2
3
4
5

25. 25 © Nokia 2015
The importance of a holistic approach
• More than just energy and carbon
• It involves the whole life cycle
• Understanding Technologies
• It’s about making informed decisions
• Avoid the EcoBling

26. 26 © Nokia 2015
Summary
• Better data Better information Better results
• The right tools data quality & data accuracy
• Always consider the commerciality and the value
• Feedback Continuous improvement