nick hayes

HEQDF Forum – Delivering Sustainable Buildings in the HE Sector

9th October 2012

Sustainable Refurbishment – Myth, Magic or Mandatory | Nick Hayes [email protected]

Delivering Sustainable Buildings in the Higher Education Sector

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?

October 2012HEQDF Forum 3


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?


How Sustainable Buildings Deliver Key Priorities

Key Drivers for Sustainable Buildings

Sustainable buildings driven by a range of mandatory, sector and local priorities

� 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


13%

19%

19%

31%

69%

75%

75%

75%

88%

88%

0% 20% 40% 60% 80% 100%

Reduction of greenhouse gas (GHG) liability

Operational cost savings from water efficiency

Higher occupancy rates

Greater overall building value

Attraction and retention of quality workforce

Operational cost savings from energy effiency

Greater workforce productivity

Value of public relations and free publicity

Corporate environment commitment

Greater indoor air and environmental quality

% of Respondents

Why Do Users Want Sustainable Buildings?

Deloitte & Lockwood Report July 2008


Meeting Customer Expectations, Whilst Reducing Energy and Carbon Use

■ 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....

Meeting Customer Expectations, Whilst Reducing Energy and Carbon Use

What Lessons Have We Learned?

13%

19%

31%

31%

37%

38%

40%

62%

69%

7%

29%

38%

19%

56%

50%

38%

49%

53%

25%

31%

93%

86%

57%

49%

62%

13%

19%

25%

13%

7%

13%

7%

7%

7%

7%

0% 20% 40% 60% 80% 100%

Insurance Rates

Permit Processing Time

Total Renovation time

Property Value

Occupancy Levels

Workforce Productivity

Ability to Retain Talent

Employee Health

Employee Well-Being

Ability to Attract Talent

Employee Comfort

Goodwill / Brand…

Increased Significantly Increased SlightlyNo Change Decreased SignificantlyDecreased Slightly

Broader Studies

The Value and Impact of Green Buildings

The link between people and buildings is key to achieve and demonstrate benefits

Energy Saving (EPC D to B)

€ 24 /m2/year

Water Saving (Part L to BREEAM VG)

€1 /m2/year

Sickness Reduction (39% reduction)

€180 /m2/year

Productivity Improvement (5% increase)

€690 /m2/year

TOTAL €895 /m 2/year

Other Benefits to OccupierBrand, CSR, Recruitment and Retention

Other Benefits to InvestorMarketability, longer life, stable cashflows

Value of Occupying Sustainable Buildings Impact of Green Development

Deloitte & Lockwood Report July 2008


Market Value...

...and Differentiating Those Who Benefit

Doing Good by Green Responsible Property Owner & Occupier Actions

11

Operating Costs

Rents OccupancyBuilding

Value

3%(21%)

3.5%

7.5%(26%)

8.9%

Laggards Leaders

Outdated assetVoluntarily 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

October 2012HEQDF Forum

Delivering the business case

‘Easy Wins’ and Whole Life Cost Savings

Project TypePayback

(yrs)

Lighting upgrades 3.3

Insulation (Loft, Cavity Wall, Roof, Double Glazing) 3.8

Lighting controls 3.2

Pipe work Insulation (Cooling, Heating) 2.7

Voltage optimisation 3.4

Heating (e.g. controls, zone control valves) 3.2

BEMS - remotely managed 3.2

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

‘Easy Wins’

■ Based on a comparison of BREEAM buildings against building compliance standards (BRE Trust/Cyril Sweett)

■ Naturally ventilated office

– Energy savings of 17%

– Water savings of 71%

■ Air conditioned ‘prestige’ office

– Energy savings of 26%

– Water savings of 55%

Whole Life Cost Savings

BRE Trust/Cyril Sweett


Greatest ‘Bang for Buck’

The Whole Life Cost Approach

■ 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

Case Study Review and Benefits / Savings

(£) 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

Total Whole Life Costs 11,194,290 13,470,425 16,658,633 15,045,683

Ranking 1 2 3 4

Value in Excess of Rank 1 2,276,135 5,464,342 3,851,392

% in Excess of Rank 1 20.33% 48.81% 34.40%

Analysis of Whole Life Costs

14October 2012HEQDF Forum

0

4,000,000

8,000,000

12,000,000

16,000,000

20,000,000

SEW P MM SEW LS Siemens

Tot

al C

ost (

€)

Capital Energy Replacement Maintenance

Option 1

Option 2

Option 3Option 4

Cost and Carbon benefits – ‘Dual Currency’ Model

Getting Informed Decisions

Establish comparative costs vs. CO2 emissions of various component options over the life cycle and building a library of green components

■ 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

Challenges

■ 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

Outcomes

HEQDF Forum 15October 2012

Informed Decision Making Tools

User friendly tools to compare various design options developed through modelling of whole life cost for financial and carbon impact


Who Gains and Who Pays?

Inter-relationship Benefits to Stakeholders

Investors Developers Designers ContractorsOccupiers

Owners Tenants

Reduced Costs Capital costs Maintenance costs and of capital costs, plus cheaper refits and faster lets

Design time and snagging

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 Quicker planning permission

H&S, pollution liabilities and time savings, no over run penalties

Asset value risks and H&S liabilities

H&S liabilities and flexible accommodation forfuture 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

Satisfaction Personal satisfaction / intellectual challenge

Personal satisfaction / intellectual challenge

Personal satisfaction / intellectual challenge

Improved staff satisfaction / retention

Improved staff satisfaction / retention

Image Demonstrable performance for SRIFTSE4 good eligibility

Profile & distinctive buildings on market

Repeat work due to satisfied clients

Improved image to clients and improvedpublic image

Improved image to clients and improvedpublic image

Experience Gained Future marketability Future marketability Future marketability

Business Flexibility Flexibility of investment potential

Flexibility of letting / sale potential

Flexibility of building use

Flexibility of building use

Stakeholder Benefits


■ 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

Who pays? …There Are a Number of Options

Funded Solutions

Bringing it All Together

A Route Map to a Sustainable Asset Portfolio

Rev

iew

Rev

iew

Mandatory Local Compliance Advisory

Improve Management

Do Nothing Improve Asset

Do Both

CAPEX Plan and Benefits Case

DEC and EPC Assessments

CR

C

Pla

nnin

g

DE

C

BIU

SK

A

Whole Life Cost

Peer Review

� HEI Groupings� Green League� AUDE

‘Brokering’ data, managing client

portfolio

Sustainability Strategy and

Benchmarking

Modelled Consumption Performance

Act

ual C

onsu

mpt

ion

Per

form

ance

Prioritisation

EP

C

CS

R

Env

ironm

ent a

nd

Sus

tain

abili

ty

Pol

icy

BR

EE

AM

Action Plan

Audits and Carbon Management

Strategy Plan,ROI, WLC

Energy / Carbon /Sustainability Audits

Portfolio Analysis

Energy Efficiency Funding


22

?

Summary

Sustainable refurbishment – Myth, Magic or Mandatory?

23

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!)

Summary


24

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!

Summary


nick hayes

Documents

reduction of carbon

commercial buildings

high performance buildings

role buildings

carbon use

heqdf forum

key sector challenges

carbon nondomestic