HEQDF Forum – Delivering Sustainable Buildings in the HE Sector Sustainable Refurbishment – Myth, Magic or Mandatory | Nick Hayes nick.hayes@echarris.com 9th October 2012
Delivering Sustainable Buildings in the Higher Education Sector What are the Key Sector Challenges?
What are the Key Sector Challenges? 1. How can high performance buildings meet customer expectations, whilst reducing energy and carbon use? 2. How do we select methods and materials which give the biggest ‘bang for bucks’ in relation to cost and carbon reduction? 3. How can we positively influence staff and students to encourage reduction of carbon through behavioural change?
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What are the Key Sector Challenges? 1. How do we recognise the role buildings play in meeting the key priorities of the University? 2. How can high performance buildings meet customer expectations, whilst reducing energy and carbon use? 3. How do we select methods and materials which give the biggest ‘bang for bucks’ in relation to cost and carbon reduction? 4. How can we positively influence staff and students to encourage reduction of carbon through behavioural change? 5. Who gains and who pays? 6. How do you bring it all together?
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How Sustainable Buildings Deliver Key Priorities
Key Drivers for Sustainable Buildings Climate change act - zero carbon non-domestic by 2019
Planning requirements
Energy Performance Certificates (EPCs) required for all commercial buildings on construction, refurbishment, sale, lease or renewal (Predicted rating)
Corporate Social Responsibility (CSR) – Reputation and Positioning
Display energy certificates (DECs) not mandatory for commercial buildings but leading organistaions voluntarily undertaking
Peer Group positioning, Russell Group, Green University league table
Energy Act – F and G rated EPCs outlawed by 2018
Competitive advantage, marketing, student intake
Carbon reduction commitment (CRC) mandatory for all organisations consuming > 6000 MWh/year (approx £500,000)
Financial plans and business case
Fines for non-compliance with EPCs, DECs and CRC
High performing facilities, high attainment levels, building flexibility
Future Policy – A Code for Sustainable Buildings including mandatory energy performance standards?
The need to differentiate
Sustainable buildings driven by a range of mandatory, sector and local priorities
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Why Do Users Want Sustainable Buildings? Greater indoor air and environmental quality
88%
Corporate environment commitment
88%
Value of public relations and free publicity
75%
Greater workforce productivity
75%
Operational cost savings from energy effiency
75%
Attraction and retention of quality workforce
69%
Greater overall building value
31%
Higher occupancy rates
19%
Operational cost savings from water efficiency
19%
Reduction of greenhouse gas (GHG) liability
13% 0%
20%
40%
60%
80%
100%
% of Respondents Deloitte & Lockwood Report July 2008
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Meeting Customer Expectations, Whilst Reducing Energy and Carbon Use
Meeting Customer Expectations, Whilst Reducing Energy and Carbon Use What Lessons Have We Learned? ■ There are opportunities to learn from outside the sector – approaches and technologies work across sector boundaries (and exemplars within!) ■ Win, win opportunities – lower costs and better working environments ■ The simple things are important – commisioning and user guidance ■ Behavioural change matters – and is the easiest way to reduce costs and carbon ■ Whole life costing is key....
Broader Studies The Value and Impact of Green Buildings Value of Occupying Sustainable Buildings Energy Saving (EPC D to B)
€ 24 /m2/year
Water Saving (Part L to BREEAM VG)
€1 /m2/year
Sickness Reduction (39% reduction)
Impact of Green Development Goodwill / Brand… Employee Comfort
€180
/m2/year
€690 /m2/year
TOTAL
€895 /m2/year
Employee Well-Being
38%
Employee Health
37%
Ability to Retain Talent
31%
Workforce Productivity
31%
Occupancy Levels
19%
Total Renovation time
Other Benefits to Investor
49% 38%
13%
19%
56%
13% 62%
38%
49% 57% 7%
7%
Insurance Rates 20%
7%
25%
50%
29%
0%
13%
53%
19%
13%
Permit Processing Time
Marketability, longer life, stable cashflows
25%
40%
Property Value
Brand, CSR, Recruitment and Retention
31%
62%
Ability to Attract Talent
Productivity Improvement (5% increase)
Other Benefits to Occupier
69%
40%
Increased Significantly No Change Decreased Slightly
60%
7%
86%
7%
93%
7%
80%
100%
Increased Slightly Decreased Significantly
Deloitte & Lockwood Report July 2008
The link between people and buildings is key to achieve and demonstrate benefits
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Market Value... ...and Differentiating Those Who Benefit Doing Good by Green
Responsible Property Owner & Occupier Actions
Operating Costs
7.5% (26%) 8.9% 3.5% 3% (21%) Rents
Occupancy
Building Value
Laggards
Leaders
Outdated asset
Voluntarily displaying energy performance
Lack of control
Automatic meter reading
PR risk / issues
Benchmarking
Unable to respond to market demand
Continuous commissioning
Future
Setting targets
Built into valuation
Incentivising energy efficiency
Upper Quartile Demand
Finding savings
Reputation
Keeping ahead of R&L
Competition
Green Leases
Climate change adaptation
Engaging supply chain
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Delivering the business case
‘Easy Wins’ and Whole Life Cost Savings ‘Easy Wins’ Project Type
Whole Life Cost Savings Payback (yrs)
■ Based on a comparison of BREEAM buildings against building compliance standards (BRE Trust/Cyril Sweett)
Lighting upgrades
3.3
Insulation (Loft, Cavity Wall, Roof, Double Glazing)
3.8
Lighting controls
3.2
– Energy savings of 17%
Pipe work Insulation (Cooling, Heating)
2.7
– Water savings of 71%
Voltage optimisation
3.4
Heating (e.g. controls, zone control valves)
3.2
– Energy savings of 26%
BEMS - remotely managed
3.2
– Water savings of 55%
Insulation - draught proofing
3.6
Boilers - control systems
3.3
Time switches
1.9
Heating - TRVs
3.2
Hot Water (Distribution improvements, point of use)
3.3
BEMS - bureau remotely managed
3.6
Ventilation (distribution, controls, air handling units)
2.4
■ Naturally ventilated office
■ Air conditioned ‘prestige’ office
BRE Trust/Cyril Sweett
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Greatest ‘Bang for Buck’ The Whole Life Cost Approach Case Study Review and Benefits / Savings
Analysis of Whole Life Costs
■ Review of Motors for Baggage Handling System at Gatwick Airport – Compared new PMM technology vs existing motors ■ Benefits / Savings – 39% more energy efficient with similar carbon footprint – Initial premium recovered in 2 years – £1m NPV saving in 15 years in energy savings alone at current prices – Reduce exposure to future energy price rises – Easier maintenance – Facilitates pan airport automatic control – Better conveyor braking – Lower spare stock requirements
(£)
Option 1
Option 2
Option 3
Option 4
Capital Costs
1,821,534
1,589,687
1,162,953
2,043,121
Energy Costs
8,383,944
10,777,924
13,942,028
11,793,006
Replacement Costs
520,839
697,103
675,499
699,280
Maintenance Costs
467,973
423,711
428,153
510,276
11,194,290
13,470,425
16,658,633
15,045,683
1
2
3
4
2,276,135
5,464,342
3,851,392
20.33%
48.81%
34.40%
Total Whole Life Costs Ranking Value in Excess of Rank 1 % in Excess of Rank 1 20,000,000
Option 3 Option 4
Total Cost (€)
16,000,000 12,000,000
Option 2 Option 1
8,000,000 4,000,000 0 SEW P MM Capital
SEW Energy
LS Replacement
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Siemens Maintenance
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Cost and Carbon benefits – ‘Dual Currency’ Model Getting Informed Decisions Challenges
Outcomes
■ Making investment decisions on total cost and carbon impact is difficult ■ Create a user friendly tool to compare various design options developed through modelling of whole life cost for financial and carbon impact ■ Defining carbon content for key components though the component life cycle
■ Started with a the façade element and compared lifecycle costs over the whole life of the component asset ■ Breakdown of initial capital investment, operational cost and replacement cost for each façade type ■ Measurement of carbon emissions over the whole life cycle of the asset ■ Cost vs. Carbon comparison of different façade options
Establish comparative costs vs. CO2 emissions of various component options over the life cycle and building a library of green components
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Informed Decision Making Tools
User friendly tools to compare various design options developed through modelling of whole life cost for financial and carbon impact
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Who Gains and Who Pays?
Inter-relationship Benefits to Stakeholders Stakeholder Benefits Investors
Developers
Designers
Occupiers
Contractors Owners
Tenants
Reduced Costs
Capital costs
Maintenance costs and Design time and of capital costs, plus snagging cheaper refits and faster lets
Resource use and waste on site
Maintenance & operational costs and downtime in using building
Maintenance & operational costs and downtime in using building
Reduced Risks
Reduced risk on capital
Letting voids
H&S, pollution liabilities and time savings, no over run penalties
Asset value risks and H&S liabilities
H&S liabilities and flexible accommodation for future subletting
Higher Returns
Faster return of capital Increasing net lettable area and higher rents and occupier retention
Repeat work due to satisfied clients
Improved staff productivity
Improved staff productivity
Improved staff satisfaction / retention
Satisfaction
Image
Demonstrable performance for SRI FTSE4 good eligibility
Experience Gained Business Flexibility
Flexibility of investment potential
Quicker planning permission
Personal satisfaction / intellectual challenge
Personal satisfaction / intellectual challenge
Personal satisfaction / intellectual challenge
Improved staff satisfaction / retention
Profile & distinctive buildings on market
Repeat work due to satisfied clients
Improved image to clients and improved public image
Improved image to clients and improved public image
Future marketability
Future marketability
Future marketability
Flexibility of letting / sale potential
Flexibility of building use
Flexibility of building use
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Who pays? …There Are a Number of Options
Funded Solutions
■ ZERO capital investment from the Client ■ Third Party Funded - all measures paid for by specialist, sustainable funds ■ Energy savings of c30% through a ‘basket’ of measures ■ ‘Savings-shared’ model: ■ Balance of yearly savings used to repay capital investment by Investor ■ Client benefits from 100% of the savings thereafter ■ Energy performance guaranteed and underwritten by reputable ESCOs ■ Saves money and carbon ■ Mitigates risk and facilitates compliance
Bringing it All Together
A Route Map to a Sustainable Asset Portfolio
SKA
Advisory BREEAM
CSR
Environment and Sustainability Policy
Local Compliance
DEC
Planning
EPC
CRC
Mandatory
Sustainability Strategy and Benchmarking
BIU
DEC and EPC Assessments
Improve Management Actual Consumption Performance
Review
Review
Prioritisation Do Both
Peer Review
Portfolio Analysis
‘Brokering’ data, managing client portfolio
Modelled Consumption Performance
Energy / Carbon / Sustainability Audits
Audits and Carbon Management
Strategy Plan, ROI, WLC
Action Plan
Energy Efficiency Funding
HEI Groupings Green League AUDE
Improve Asset
Do Nothing
Whole Life Cost
CAPEX Plan and Benefits Case
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Summary Sustainable refurbishment – Myth, Magic or Mandatory?
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Summary Sustainable refurbishment – Myth, Magic or Mandatory?
Mandatory ■
What you have to do
■
Let’s take that as read…
Magic ■
■
Sprinkle stardust on the scheme –
Aspirations
–
Buildings…
–
…and how they link with People
There are lessons to be learned out of sector (knock on Matt Dickinson’s door – or ours!)
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Summary Sustainable refurbishment – Myth, Magic or Mandatory?
Magic (continued) ■
Get the brief right –
Feasibility study to inform objectives, particularly the balance between capex and opex • Understand the building intimately • Understand its constraints, particularly services
– ■
Modelling and tools
Use the project as an agent of change –
People and behaviours are key winners
–
Innovative design can be key enabler
■
Have the right framework/route map
■
Have the right funding mix
Myth ■
Only if you don’t follow some of those rules or top tips above!
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