Life Cycle Cost Assessment - Motiva Oy, Finland
Summary
This good practice example describes training sessions to facilitate the implementation of Life-Cycle Cost Assessment (LCCA) into building practice. There is an obvious need for relevant information on this subject. The description shows that, in some EU countries, the knowledge of life-cycle cost assessment limited, while in others the LCCA is already a part of the company building code. Training sessions were organized by the partners of this project.
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| End-user area | Education Financial instruments Legal initiatives (municipal regulations, directives, etc) New buildings Planning issues Refurbishment of buildings Sustainable communities |
| Target audience | Architects and engineers Decision makers ESCOs Local and regional authorities Property owners Schools and universities |
| Technical scope | Appliances |
Context
The application of Life-Cycle Cost Assessment (LCCA) methods provides transparency as regards the total cost of a building, including investment, operation and maintenance, refurbishment and final disposal. Often LCCA favours innovative and efficient building concepts and technologies that are not competitive in situations, where the focus of the investor is mainly, or exclusively, on the investment cost. LCCA is a particularly suitable tool in conjunction with new construction and major refurbishment projects. However, LCCA can also be successfully applied to the procurement of individual components for maintenance and replacement.
Comprehensive tools and methods for LCCA already exist. However, their application in practice is not common. The European Commission is currently working on the preparation of a proposal for a directive on energy efficient public procurement which will be largely based on the idea of LCCA.
Motiva Oy was the leader of Work package 3. The Work Package produced a guidebook called LCC Application Manual for Construction Clients and Project Managers, guidelines for training sessions based on the manual and a number of supporting slides. At the start of the project, it was clear that there was a lack of basic guidance as to how to apply LCCA into the building process. Energy prices compose 40% of total maintenance costs and, as during buildings lifespan total maintenance costs are far greater than the investment costs, it is very important to focus on life cycle costs and sustainability. Therefore, it is necessary to analyse what kind of decisions are made in various phases of the build process and how LCCA can be taken into account to ensure the best possible solution. The duration of the project was 14 months from April 2003 to June 2004.
Objectives
The aim was a comprehensive introduction to the instruments and tools that support the market penetration of efficient building-related energy technologies. These include: Energy Performance Contracting, Life Cycle Cost Analysis, and various concepts related to residential building refurbishment. The specific objective of the project was to facilitated the implementation of life-cycle cost assessment within building practice. To meet this aim, various pilot projects were carried out by the seven partners and a guideline, with supporting training session, were produced.
Process
The first manuscript outline for the manual was developed in Finland and delivered to WP partners for comment. The draft manual was discussed at the midterm meeting and changes were designed and scheduled. A second draft was developed by the end of November 2003, in cooperation with the sub-contractor Climaconsult Ltd. The second draft of the manual manuscript was developed into a usable version for pilot course modules and distributed to partners for comment and use in pilot courses. It was agreed that the manual would be finalised only after feedback was gathered from the pilot course module participants. The final manual was therefore developed and delivered for the end of May 2004.
Initial specification of the training module was developed and a call for tenders issued for a consultant subcontractor to carry out the development of the course module. The first outline of the training module was developed by the consultant engaged for the work and comments to the first draft were provided to the consultant. The second draft was presented to WP partners and discussed at the midterm meeting.
The training module outline and slide set drafts were produced and distributed to partners for use in the pilot training modules. Finalisation of the material took place after the pilot course modules were carried out. Final versions of the module outline and slide set were delivered at the end of May 2004.
Direct marketing of LCCA at the level of the decision makers in the addressed target groups was undertaken through dissemination of the manual and face-to-face discussions. A network of experts was established to provide immediate support and advice on LCCA to building investors. A small number of suitable pilot projects were identified (1 project in 2-3 countries) and expert advice on LCCA was provided to the pilot projects. Feedback was collected and results were analysed.
Actions
- Workshop
- Seminar
- Technical Handbook
- Database
Financial resources and partners
Work in work package three was carried out by 7 partners:
Motiva was responsible for overall management and coordination of the work package. Furthermore, Motiva was in charge of two tasks, development of the LCCA manual (task 3) and the training course module (task 4). Motiva also contributed to tasks 1, 2 and 5.
E.V.A. was responsible for two tasks; the review of LCCA methods and available LCCA tools (task 1) and examples of best practice projects. This included the development of a survey format and the compilation of information from other partners into an overview report. Contributions were also provided to the other tasks.
STEM was responsible for task 5 concerning direct marketing. This included the coordination and reporting of activities in pilot projects and the collection of a national LCCA expert registry. Input was also provided to the other tasks.
The other partners provided information from their respective countries to the surveys, arranged events and disseminated the produced information.
This good practice example described in this report is only a part of work package 3 but the costs include the whole WP.
| European Commission | € 131,370 |
| National Financing | 102,391 |
| Total Cost | € 233,761 |
Results
The main deliverables were the manual for applying LCC to building practice and the provision of training session guidelines and a slide set. In total, 257 persons attended the pilot training sessions and workshops carried out by the partners. Participants represented various professions including architects, engineers, building administrators and owners, and building project managers.
The manual contains the following main elements:
A one-day training module and supporting slide set were developed for transferring LCCA know-how to construction professionals. The training module includes both the theoretical and practical basics of LCCA in terms of lectures and presentations. Within a group work session participants were encouraged to use real projects from their daily work to elaborate the concepts of LCCA at a session presenting the available LCCA tools.
LCCA was found to be a promising method in the construction of new buildings and the refurbishment of existing buildings. The feedback from participants, supported by follow up calls to obtain further information, suggested that the events arranged under the work package acted as a catalyst for the application of life-cycle costs analysis within building practice
A database of national LCC-experts was produced during the project and can be found from
OPET-building web-page. An expert developed draft standard entitled 'Whole Life Costing' is
available from: www.iso.org.
The introduction of LCCA into building practice is required under legislation and the respective normative documents. The regulative approach on regional, national or European level recommends that LCCA or energy and ecological minimum standards and target values should be integrated in public procurement procedures. There could also be some kind of joint budget responsibility on the tenant's side for both rent and energy costs.
Lessons learned and replication potential
The level of knowledge concerning life-cycle cost assessment and awareness of how to implement LCCA into building practice has been raised. The idea of taking sustainability into account in decision-making is quite new in some countries. This project revealed that more information about LCCA is needed and the feedback from the training sessions was very positive.
The target group for training session was varied due to differing levels of knowledge regarding life-cycle cost analysis and how to use it. Therefore, in some cases, it was necessary to transform the contents of basic training programme. Another problem was an absence of standard terminology in EU member states.
The uptake of LCCA approaches is best promoted through long term investors. This means that cooperation between the R&D community and public sector construction organizations and other 'low-return, low-risk' investors should be encouraged.
High profile demonstration projects should be established in order to provide more visibility to the practical benefits and outcomes of LCCA.
New concepts should be developed for sharing the risks and benefits associated with high or low life cycle costs. Performance contracting concepts provide a good starting point for this activity.
Simplified and standardized LCCA tools should be developed for common use in especially in early stages of construction projects.
Contact for more information
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Printed reports or other literature available
LCC Application Manual for Construction Clients and Project Managers
Pdf (english) downloadable at no charge.