Whole-life economics of Building Services

Bernard Williams, Managing Director of Frisque Co Ltd and IFPI, publishers of

Bernard Williams, Managing Director of Frisque Co Ltd and IFPI, publishers of "Whole-life economics of Building Services"
(Click to enlarge)

Whole Life Economics of Building Services

Whole Life Economics of Building Services
(Click to enlarge)

Myths Explained

Myths Explained
(Click to enlarge)

When this reviewer was a young and inexperienced student apprentice Heating and Ventilation engineer, he came across the term “Life Cycle Costing”.  Upon enquiring of his seniors as to its meaning, he got the response of “you don’t want to bother with that, lad, it’s something that quantity surveyors and academics try to do, no one in the real world ever manages to make it work in practice”.  And so it seemed to continue for the rest of my career over the last 40 odd years.  From time to time the topic would resurface, but there remained the difficulty that the available data was either too complicated to apply, or not directly applicable, or both. At the other extreme it was often too generalised to be of specific value.

What was needed was for someone to actually take the trouble to work it all out from first principles and come up with a tabulated summary of the applicable costs for each component system – and then to relate these costs to appropriate sizes of buildings.  Derivation of the life cycle costs would then be a relatively simple matter of extracting the cost data.  The Manual “Whole-life Economics of Building Services” does just this. What is presented is going to be of inestimable value to the working building services engineer.  He or she, will now be able to make system cost comparisons based on readily useable factual data.  This will, particularly be the case with the choice of air conditioning systems, since additional information is given to assist in this process.

The Manual itself is a truly mammoth work.  It comprises some 500 pages of A3 format, the majority of which are cost analysis tabulations.  From these, it is possible to develop whole-life costs for the full range of mechanical and electrical services normally provided to commercial buildings. It is important to realise that the printed manual is in essence a distillation of data extracted by the authors from their analysis of a large number of completed projects.  In turn, the derived costs have been checked against actual project data to confirm it’s validity.  

Although the Manual’s data is derived for office buildings, much of it will be applicable to other buildings – such as schools and hospitals and even to large residential buildings.  Four sizes of buildings are examined ranging from 2,250m2 to 33,300 m2 of gross internal area.

The approach used by the authors allows individual costs to be extracted for the principal system components to a high level of detail ie down to grilles, dampers etc – this detail being provided for each of the primary system functions of Source – Distribution – Outlets.  The costing methodology is equally detailed, with costs being derived for Capital Costs, Life Cycle Replacement, Maintenance and Energy Costs.  All costs are stated in £/m2 of gross internal area.  Total lifetime costs are calculated for a 30 year period and are given as undiscounted costs and with the NPV discounted at 10%. The transparency of the cost information will also allow future adjustments to be readily applied.  This is already appropriate to energy costs, which have seen significant increases since the Manual’s publication.

Throughout the Manual, technical and economic commentaries are given by the authors on their thinking when they developed the costings.  These commentaries are particularly helpful in dealing with grey areas such as the replacement of primary system components due to failure or obsolescence.  They also allow informed adjustments to be made where specific design or operating requirements apply.

As an aside, the deviation of energy costs from actual assessed consumptions means that a designer can use this data for Building Regulation compliance.  In particular, meter scheduling values can be determined with more confidence. Such data can also be subsequently included in the Building Log Book for eventual comparison with the actual consumptions.

In addition to the cost summaries, the Manual contains a number of cost comparisons for complete systems.  These cover three space heating and nine heating/cooling systems, calculated for the medium sized building of 7,200m2 of gross internal area. For each system, costs are derived and shown graphically as undiscounted costs and with the NPV discounted at 10%.  A technical and economic commentary is also given on the overall economics of each system along with their pros and cons.

A cost comparison for all of the mechanical and electrical systems in all four buildings is also derived.  These comparisons are based on the use of a VAV air conditioning system with other typical choices of mechanical and electrical system being used in support.  The impact of building size on some of these systems can thus be clearly seen, as can the impact of the lifetime costs.  There may be some surprises in store for designers, with the realisation for instance that lifetime energy costs often approach or exceed capital costs.

A recent development has seen the cost data in the Manual built into a dot.net-based program (Facilities Cost Monitor) in a joint venture between the originators and FSI – the company behind the highly successful Concept™ cafm systems.

The programs use the sub-elemental costings for the 4 buildings in the Manual to construct models for ‘Energy’ and ‘Services Maintenance’ which interpolate the figures for any size and shape of building across the complete range.

The programs ask simple but critically important questions about the key cost drivers in each cost sub-element. The cost estimates thereby produced therefore reflect not only the scope of the services but also the site-specific conditions and user requirements under which energy is consumed and maintenance specified and carried out. Of course, in the same way that the costings in the basic Manual have been checked against current bids received by the originators the output from these programs has also been subjected to due diligence against the market place.

For any supplier wanting to produce a check estimate prior to bids going in or simply wanting to benchmark the costs of current service provision these Cost Monitors offer a very quick and realistic method of doing the calculations – and also testing the ‘what-if?’ scenarios. Furthermore, you get a graphic depiction of the comparative cost results and a full report including the answers you have made to the questions asked by the programs. There is a comprehensive set of Helptext notes interactive with each question; if you have any queries these cannot answer you can call up the originators direct for further Help.

So in conclusion, it can be truly said that here at last is a manual which is sufficiently detailed to allow realistic cost comparisons to be produced.  No other publication provides either the scope of information or the level of detail. In addition, the development of the dot.net-based programs will allow interpolation for building shape and size to be readily obtained as well as allowing the ‘what-if?’ scenarios to be tested.