Paul Erickson of Affiliated Engineers presents Preliminary Modeling & Life Cycle Costing: Underpinnings of Integrated Design at the 2012 Chicago Energy Modeling Conference.

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Preliminary Modeling & Life Cycle Costing: Underpinnings of Integrated Design
Paul Erickson, LEED AP, Sustainable Practice Leader
ASHRAE | Chicago Energy Modeling Conference | February 14, 2012

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Costs Over Time

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Cost Compression

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The Operational Savings Opportunity

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Agenda
1. Why the universal drive to reduce operating costs now?
2. Getting more from the Integrated Design Process
3. The impact of BIM
4. Robust decision making process
5. The Learning Objectives
6. Questions

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Why the Drive to Reduce Operating
Costs Now?
FIVE DRIVERS

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Driver 1 42 States Have Projected Shortfalls for Fiscal Year 2012
Short of Money
Source: Center on Budget and Policy Priorities | CBPP survey

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Driver 2 Endowment Data
Short of Money
1Institutions ranked by size of endowment in 2009.
NOTE: Degree-granting institutions grant associate's or higher degrees and participate in Title IV federal financial aid programs.
SOURCE: U.S. Department of Education, National Center for Education Statistics. (2011). Digest of Education Statistics, 2010 (NCES 2011-015), Table 372.

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Driver 3 Energy Prices Going Up; Operational Costs Going Up
24 Years
24 Years
Compounds difficulties of budget reductions

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Driver 4 Recent Building Boom on Campuses = Greater Demand on
Operating Budgets
HISTORY OF COLLEGE CONSTRUCTION
COLLEGE CONSTRUCTION COMPLETED ($000’S), 1995 THROUGH 2010
$16B Total Construction
$14B
$12B
$10B
$8B
$6B
$4B
$2B
$0
1995 1997 1999 2001 2003 2005 2007 2009
Source: College Planning & Management/Feb. 2011

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Driver 5 Reducing Energy – Bar Raising Codes for New & Renovated
Construction
Progression of the ASHRAE 90.1 Energy Standard

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The Result The Need for an Integrated Solution

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Integrated Design Efforts to Date
If Traditional Design Effort has been this…
Traditional

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Integrated Design Efforts to Date
Integrated Effort has been…
• Goal: Construction Cost Savings to Owners
• Result: Limited Realization of Cost Savings to Owners

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How Do We Get More from the Integrated Delivery Process?
1. Harness the Industry’s Dynamically Developing Tools
BIM
Energy Modeling
2. Improve the Design Decision Making Process
Timing of Team Engagement
Decision Making Process (tools and metrics)
3. Amplify Owner’s Expectations
The Project Champion
Day to Day : Project Manager

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BIM: One Tool, Uneven Development

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BIM’s Promise

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BIM’s Pending Architecture: The Anticipated Path to Reduce Operating Costs

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BIM’s Pending Architecture: Continuous Retro-Commissioning
Real-time evaluation of performance
Near real-time adjustment of operation parameters
Maintaining the original design savings

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BIM’s Pending Architecture: Facilities ManagementTools
Real-time evaluation of performance
Calculation of avoided maintenance cost impact
Prioritization of maintenance tasks
Intuitive data and product information access
Single interface and point of content update

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Effective Decision Making Potential

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Our Experience . . .
• Typical Integrated Design alone will not deliver operations savings
• A clear financial metric alone will not deliver operations savings
Our Position
The complexity and contagious rate of change requires:
An Effective and Nimble Decision Making Process

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An Effective and Nimble Decision Making Process
• Driven by:
• Accelerated Team Engagement
• Financial Metrics which consider operating costs
• Decision Making Tools that can accommodate competing and changing goals
• operating costs,
• LEED,
• Simple Payback
• etc.

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Timing of Team Engagement
• Typical Integrated Design process generally produces:
• More coordinated drawings
• Fewer RFIs and change orders
• More User/FM interaction and input during design
• Some energy savings
• Earlier engagement is necessary for early decision making

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Decision Making Metrics are Not Equally Useful

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Decision Making Metrics are Not Equally Useful

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Decision Making Process

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Decision Making Process

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Analysis and Decision Making
Questions to Consider
• How does this analysis happen soon enough to inform the Charrette or early
budgeting?
• How do the consultants know what the goals are prior to the charrette?
• Doesn’t the design team just default to “same-old” design early on?
• What happens when the input/experience seems to be counterproductive to
the goals?
• How can the energy modeling be “detailed” if the building architecture
isn’t set?
• How can the modeling keep up with the timeline? Who should do it?
• How do we determine if some strategies are worth tabling?
• How does the LCCA get good first cost numbers? Maintenance cost
numbers?
• How does the estimating fit into the timeline? Who should do it?
• Whose responsibility is it to identify/pursue alternative funding?
• How do we navigate the VE exercise? A menu would be nice…
• Are the LCCA results meaningless if we mix and match strategies?
• What if we don’t believe the results?
• How do we accommodate items that are difficult to price?
• How can the design team support the Decision Maker?
• What are some examples of the type of support?

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Energy Performance Modeling
Sustainability Charrette

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Energy Performance Modeling
End of Concepts (inform estimate)
CODE 20% 40% Net-Zero
Net-Zero
Better Better

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Energy Performance Modeling - Takeaways
• Appropriate level of detail
• Modeling output only as good as the inputs
• A/E vs third-party modeler
• Models best at deltas, not absolutes

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Goals and Metrics
Design Goals Life Cycle Cost University Decision Maker

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Goals and Metrics - Takeaways
• Clear definition of metrics and goals
• Stakeholder input is essential
• Sensitivity analyses can accommodate uncertainties

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Cost Hurdles: First Cost AND Operating Cost

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Navigating the VE Sea
Capitalizing on LCCA data

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Navigating the VE Sea
• Multiple project goals must be addressed
• Richness of LCCA data allows for adaptation
• The modeling and LCCA provide a foundation throughout

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Summary

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Summary

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Strategies Energy Recovery Wheel
• Typical Energy Savings: 15-20%
• Typical Energy Cost Savings: 10-15%
• Simple payback range: 3-7 yrs

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Strategies Active Chilled Beams
• Typical Energy Savings: 5-10%
• Typical Energy Cost Savings: 3-7%
• Simple payback range: 0-4 yrs

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Strategies Heat Recovery Chiller (HRC)
HRC RECOVERED ENERGY
• Typical Energy Savings: 10-20%
• Typical Energy Cost Savings: 10-15 %
• Simple payback range: 3-7 yrs

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Strategies Demand Control Ventilation
• Typical Energy Savings: 5-15%
• Typical Energy Cost Savings: 3-12%
• Simple payback range: 1-4 yrs

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Example Results: Integrated Design for Reducing Operating Costs

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Today’s Takeaways
1. Unprecedented Drive to Reduce Operating Costs
2. Preliminary Modeling and Life Cycle Costing are the Right Tools to
Reduce Operating Costs
3. Amplified Client Commitment will lead to Reduced Operating Costs

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Preliminary Modeling & Life Cycle Costing: Underpinnings of Integrated Design
Paul Erickson, LEED AP, Sustainable Practice Leader
ASHRAE | Chicago Energy Modeling Conference | February 14, 2012