Across Europe, there is a real and urgent demand for deep renovation of the existing building stock and transformation of vacant, obsolete, or vacant buildings into dwellings. Due to the enormous scale of such operations and the need for the attainment of energy efficiency goals, a systematic approach is required to inform any decision-making in the process of renovation with respect to the monetary and environmental consequences of the choices. However, several challenges must be overcome prior to scaling up the renovation process resulting in energy-efficient buildings. One of the challenges is the lack of tools and methods for quickly estimating the costs, benefits, and expected return on investments for each proposed renovation strategy at an early stage of decision-making. As detailed in Directive 2014/24/EU of the 2014 to identify the most advantageous tender, the decision should not be only based on non-cost criteria. Qualitative criteria should therefore be accompanied by a cost-effectiveness approach such as life-cycle costing. Simple “payback time” is a quick way of evaluating the financial attractiveness of EE measures and sufficient evidence-based information on the costs and benefits (Liu, Meyer, and Hogan 2010). The main purpose for developing this use case is to propose a systematic and quick Life Cycle Costing (LCC) calculation to be able to compare different renovation strategies.
Use Case Definition
Aim and scope
Aim: The “LCC tool” was developed to:
- Provide insight into the financial performance of each renovation strategy
- Reduce the time and consequently the cost of LCC calculation using the automatic quantity take off
- Streamline and standardize the process by providing a systematic approach, which makes the results of the comparison between different scenarios more reliable
Scope: In principle, the LCC analysis can be applied to different stages of the life cycle of an asset, however, as shown in Figure 1, the potential for value improvement is much greater in the planning stage compared to other stages. Up to 80% of the operation, maintenance, and replacement costs of a building can be influenced by the first 20% of the design and planning process.
The LCC analysis normally gives insight into the following questions:
- Will the future expenses for maintenance and management considering the capital cost related to a renovation investment be in balance with the rental benefits?
- If there is not a good cost/benefit balance will that then be compensated by an increased market value?
- Is a renovation investment needed and what will the effect be on the future market value by the end of the life cycle?
- Will the quality of the real estate stay on a level, during the life cycle, which can facilitate refinance of the outstanding loans?
- Is it worthwhile to invest or better to just maintain? Is it better to sell now or to wait and do that later?
Figure 1: Different scopes and the extent to which they influence LCC savings over time based on NEN-ISO 15686-5
The objectives for the use of the LCC tool may include time reduction and consequently, cost reduction as well as improved accuracy of calculating the financial performance (KPI) of a renovation scenario.
- The accuracy of the calculation depends very much on the availability of data whether acquired from the BIM model or external databases. This is especially important when we are comparing different alternatives; in order to be able to rely on the results of the comparison we need to make sure that the alternatives contain the same level of information details
- Currently, the quantity-take can be performed properly if the building is modelled based on NLsb standards
The BIM model is currently enriched according to project specifications, although the values used are fully compliant with existing NL/SfB and NE2767-2 standards (‘BIM Loket - NL/SfB’ n.d.). Mapping of NL/SfB onto IFC and vice versa are, however, active areas of research. Developments in this domain could further enhance the efficacy of the BIM-based LCC. Additionally, since LCC calculation requires assumptions about future behaviour, sensitivity analysis (such as Monte Carlo analysis) can be added to allow for the identification of a distribution of possible costs and a range of more and less probable figures for use in calculations.
- NEN-ISO 15686-5
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The documents reflect the current best practice and do not claim to be complete. They should not to be understood in the sense of a generally valid recommendation or guideline from a legal point of view. The documents are intended to support appointing and appointed parties in the application of the BIM method. The documents must be adapted to the specific project requirements in each case. The examples listed do not claim to be complete. Its information is based on findings from practical experience and is accordingly to be understood as best practice and not universally applicable. Since we are in a phase in which definitions are only emerging, the publisher cannot guarantee the correctness of individual contents.
- Document Type : Use Case
- GUID : 0CD750DA-9CE6-4123-A858-61E09EA10FFB
- Identifier : BIMSpeed_UC16_DMO
- Life Cycle Stage : ISO 22263
- Revision : -
- Project Status : Approved
- Maturity level : Proven
- Use Case: Approved
- Processes: Approved
- ER: Approved
- Published on: Nov 2, 2022
- Last change: Nov 3, 2022
- Publisher: BIM Speed
- Author: Rezvani, Sama
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