Nick Hayes

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?

HEQDF Forum

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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

HEQDF Forum

Siemens Maintenance

October 2012

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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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