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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

1 Institutions 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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24 Years

Driver 3 Energy Prices Going Up; Operational Costs Going Up

Compounds difficulties of budget reductions

24 Years

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Source: College Planning & Management/Feb. 2011

1995 1997 1999 2001 2003 2005 2007 2009

$16B

$14B

$12B

$10B

$8B

$6B

$4B

$2B

$0

Total Construction

HISTORY OF COLLEGE CONSTRUCTION COLLEGE CONSTRUCTION COMPLETED ($000’S), 1995 THROUGH 2010

Driver 4 Recent Building Boom on Campuses = Greater Demand on Operating Budgets

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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 Result The Need for an Integrated Solution

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Traditional

Integrated Design Efforts to Date

If Traditional Design Effort has been this…

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• Goal: Construction Cost Savings to Owners • Result: Limited Realization of Cost Savings to Owners

Integrated Design Efforts to Date

Integrated Effort has been…

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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

How Do We Get More from the Integrated Delivery Process?

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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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Real-time evaluation of performance Near real-time adjustment of operation parameters Maintaining the original design savings

BIM’s Pending Architecture: Continuous Retro-Commissioning

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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

BIM’s Pending Architecture: Facilities Management Tools

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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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• 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

Timing of Team Engagement

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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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Sustainability Charrette

Energy Performance Modeling

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CODE 20% Better

40% Better

End of Concepts (inform estimate)

Energy Performance Modeling

Net-Zero Net-Zero

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

Energy Performance Modeling - Takeaways

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Goals and Metrics

Design Goals Life Cycle Cost University Decision Maker

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

Goals and Metrics - Takeaways

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Cost Hurdles: First Cost AND Operating Cost

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Capitalizing on LCCA data

Navigating the VE Sea

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

Strategies Energy Recovery Wheel

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

Strategies Active Chilled Beams

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HRC RECOVERED ENERGY

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

Strategies Heat Recovery Chiller (HRC)

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

Strategies Demand Control Ventilation

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Example Results: Integrated Design for Reducing Operating Costs

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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

Today’s Takeaways

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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