Project Setup and Pre-retrofit Survey

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Legal framework

This chapter reviews how the building codes of different European countries within EcoShopping consortium take into account energy efficiency, renewable energy systems (RES) and in particular, energy efficiency improvements in envelopes, lighting and HVAC systems of existing non-domestic buildings.
Building regulations for the non-domestic building sector and their associated codes lay down minimum performance requirements for building fabric elements, technologies and services.
The building codes approach the energy performance of non-domestic building holistically, where the overall performance of the building as designed is calculated using a approved software. This gives an asset rating which is then deemed as a pass or fail when compared to the performance level required by the individual building code, normally in terms of a target kWh/m2/annum. The information is summarised in “Appendix 1. Building codes and the EPBD”, more details is available in “Appendix 2. National building energy regulations and standards”.

Equipment standards. Best practice performance criteria have been identified for the majority of technology areas which should be used when they are considered as part of a new build or refurbishment of a non-domestic building, such as EU Green Public Procurement (GPP) criteria and the UK’s Energy Technology List (ETL). The performance of the technologies finally selected for the retrofitting project should match or exceed the best practice performance criteria described in the national/European standards. In the document “Appendix 2. National building energy regulations and standards”, among different building codes and regulations of the studied countries, there are sections deal with the interface of a building and power grid. Similarly, regulations for the renewable electricity generation systems, such as photovoltaic panels and wind turbines, and regulations for heat pumps and daylighting systems are available in the document “Appendix 3. Equipment standards”.
The installation of management system for different HVAC zones, control optimisation (for Wet Heating Systems) and lighting control are encouraged by the building codes, nevertheless, the corresponding specifications are basic and lack of detail. Control system are recognized as one of the most effective measures in reducing energy demand and saving primary energy consumption, they should always be part of a refurbishment and EN 15232 “Energy performance of buildings - Impact of Building Automation, Controls and Building Management” should be used as the methodology for estimating their effect. More information is available in the document: “Appendix 4. Best practice specifications”.

Building envelop. Concerning to the building envelopment, the above mentioned document “Appendix 2. National building energy regulations and standards” provides the required performance level collected from the individual building code of project beneficiaries’ countries. As an example, extracted from this document, Table 1 summarizes the U values of some building elements required in the national regulations of the participated countries in EcoShopping project.

Indoor air quality. The air quality inside a building is recognized as a key factor that has close relationship with occupants’ health and comfort level. Some parameters could be taken into consideration in order to fulfil the requirements of the indoor air quality of a building: the operative temperature, air flow velocity, relative humidity, acoustic level, CO2 concentration, illumination level and volatile organic compounds (VOC).
The identification of indoor and outdoor comfort indicators are detailed in the document “Appendix 5. Indoor and Outdoor comfort indicators”.


fabric element Austria Croatia Germany Hungary Italy Poland Portugal Spain Turkey UK Best Values
Roof/ceiling 0.20-0.40 0.30-0.40 0.20-0.35 0.25 0.29-0.38 0.20-0.70 0.40-0.50 0.19-0.50 0.25-0.45 0.16-0.25 0.16
Wall 0.35-0.90 0.45-0.75 0.28-0.35 0.45-0.50 0.33-0.62 0.25-1.00 0.50-0.70 0.25-0.94 0.40-0.70 0.28-0.35 0.25
Floor 0.40 0.50-0.80 0.35 0.25-0.50 0.32-0.65 0.25-1.50 0.40-0.50 0.31-0.53 0.40-0.70 0.22-0.25 0.22
Windows,roof windows, roof lights, curtain walling and pedestrian doors 1.40-2.50 1.80-3.00 1.30-2.7 1.60-2.50 2.00-4.60 1.30-1.80 3.30-3.40 1.2-5.7 2.4 1.60-2.20 1.20
Vehicle access and similar large doors 1.50 2.9 1.80-2.90 1.80 N/A 1.70 N/A N/A N/A 1.50 1.50
High usage entrance doors 2.50 2.9 1.80-2.90 N/A N/A 1.70 N/A N/A N/A 3.50 1.70

Table 1. Comparison U values (in W/m2K) (for each of the participating countries in EcoShopping) for the major building elements.

Identification of european commercial building stock

The document “Appendix 6. European commercial building stock and characteristics” provides an overview of the building stock in Europe. With this information, the user will be able to position the building (construction year) in comparison with average performance values and be aware about the energy efficiency improvement potential. In the cited document, the European commercial building stock is assessed, focusing on the following characteristics: - Existing stock by age bands - Envelope performance (transmittance and air tightness values) - HVAC system types of the existing commercial buildings (Central, Packaged and Individual AC) and their energy consumption values The Appendix 6 gives a clear idea of the existing commercial building stock in the studied European countries and identifies Energy performance, efficiency and consumption related characteristic, at the meantime, several parameters are analysed showing how better energy performance of envelopes (transmittance and air tightness values) have been achieved with the implementation of European regulations (and a greener conscious of all the citizens) and how the energy consumption has been decreased remarkably in the last years.
These characteristics are described separately for different European countries so as to give an interesting comparison of the energy situation of wholesale and retail trade buildings between the studied countries, furthermore, comparisons with other non-residential buildings are presented aiming to show how important is to accelerate the implementation of energy conservation measures and to improve the existing non residential buildings, which not only includes commercial ones, but also offices, hospitals, hotels, restaurants and educational buildings.
Besides, considering the relevant contribution of a HVAC system in building’s overall energy performance, most important HVAC plants deployed in the European commercial building stock are greatly analysed, serving as good practices and reference for guiding the future retrofitting projects.

Surveys

In this phase the building owners need to firstly define the scope of the work and set project targets, after that, the available resources to frame the budget and programme of work can then be defined.
Interventions over the building elements and equipment are usually unavoidable in order to reduce the energy consumption, operation costs and to improve the comfort level, hence, it is essential to collect the needs and requirements of both owners and end-users, and to identify current dissatisfaction or desired issues that could be simultaneously improved without additional costs.

Owner requirements

After analysing the building energy performance and defining the equipment requirements, a consultancy meeting shall be made with the building owner and the facility manager. The document “Appendix 7. Owner questionnaire” aims to be a mean to gather and define building owner’s requirements toward the retrofitting scope and the future market positioning of the building. The questionnaire must address on the following topics: 1. Approach and regulations: owner’s intention on retrofitting, usage of renewable energy (RE), national regulations on RE, etc. 2. Indoor requirements: specification of indoor comfort parameters, such as temperature, air quality, noise level, illumination level, etc. 3. Technical orientation and policies: - Owner’s demand for the heating - Domestic hot water, cooling and ventilation systems - Potential energy and cost savings - Rating the energy and maintenance cost - etc. 4. Operation and maintenance: energy consumption and maintenance costs of the building, maintenance costs of HVAC and lighting systems, operation of the building, etc. 5. Lease: services are included in tenants’ contract, market position, etc. 6. Future: regulations and new standards, future market positioning, etc.

Besides the well-founded decision-making in retrofitting solutions, timing is also crucial concerning the efficiency. Late decisions may lead to major business and market losses which could be irreversible. Owners must decide investment actions (demolition, new construction, complex retrofitting, energy-efficient retrofitting, partial retrofitting etc.) within a given period for their buildings. Considerations described in section 3.4 aim to guide the owner in this aspect, offering an overview of the possible leasing forms and funding options for the retrofitting investment.

End user assessment

On the other hand, opinion from the end users towards the current indoor comfort level can be assessed by using the “Appendix 8. Comfort Questionnaire”, with which, parameters should be improved in order to achieve a better indoor environment can also be identified. The results of this comfort questionnaire evaluation must be taken into account in the design process of a retrofitting project.
Regarding department stores, indoor comfort parameters play significant role in building leasing and selling, since good indoor environmental quality is one of the essential factors to attract the intended visitors and potential buyers. Indoor environment affects health, productivity and comfort of the occupants.
On the other hand, energy consumption in a building depends on the indoor environment conditions (temperature, ventilation, lighting, etc.) and building operation, which are also tightly related to the particular indoor comfort of the occupants and the indoor air quality regional/national regulations.
The indoor comfort parameters of an existing building, and building users’ (employees and visitors) sensation of the comfort level, can be evaluated assessing the following indicators:

  • Temperature
  • Air quality
  • Relative humidity
  • Noise
  • Lighting

The Comfort Questionnaire creates connection between end-users and the given building environmental parameters, by using this simple, anonymous questionnaire, objective opinions can be collected. Two groups of questions can be introduced, one oriented to collect personal and general data of the interviewee, while another one could focus on getting the environmental parameters of the building, i.e. how the end users perceive the different environmental parameters.

Investment and benefits

This section gives an overview of how to fund energy saving retrofitting projects, the cost allocation between landlord and tenants and the energy/economic and non-economic benefits obtained due to the retrofitting actuation.

Leasing
The lease term defines how the costs and benefits of energy-saving upgrades would be allocated between landlord and tenants. This plays a key role in determining each party’s motivation to pursue improvements.

There are three primary lease structures in commercial real estate:

Gross lease: The landlord pays all utility costs, and hence would capture any cost savings that result from an efficiency upgrade. In a gross lease, the landlord’s motivation to invest in efficiency should be similar to that of the owner-occupant.

Net lease: The tenants pay all utility costs and are the initial beneficiaries of the cost savings from efficiency upgrades. This structure results in the following implicit risks:

  • The landlord may be unmotivated to make upgrades due to an inability to realize the operational cost savings produced by those improvements.
  • Tenants, on the other hand, may be reluctant to invest in upgrades to a building they do not own.

Fixed-base lease: The landlord pays utility costs up to a fixed amount with the remainder being borne by the tenant. In a fixed-base lease, the exact terms defining the fixed and variable expense portions, including how annual adjustments are made, determine the extent to which the landlord, the tenant or both enjoy the financial benefits of efficiency upgrades made during the lease term.

In these cases, adequate energy metering is also an important requirement for tracking and attributing energy project costs and savings. Sub-building level meters allow energy use to be attributed to specific building systems or spaces and define how project costs and savings may be passed on to tenants.

Routes to fund the retrofitting project
Defining an approach for financing is a key step in creating the business case for an energy efficiency project. The approach to financing includes determining the source of funds to pay upfront costs and identifying incentives that may substantially reduce those costs. Following is provided an overview of the most common purchase options and some of the incentives available that may improve a project’s financial attractiveness.

A building owner has two primary routes to fund the upfront costs of an energy efficiency project:

Purchase of equipment and services. While an owner may use cash to purchase the services and equipment associated with an energy efficiency project, the most common way to finance a project is through borrowing. Government loans or loan guarantees are often available at multiple levels (local, state, and federal).

Performance Contracting. Performance contracting is an alternative to conventional project financing. Under a performance contract, an energy service company (ESCO) delivers turnkey energy efficiency projects, with the project cost recovered over time out of energy savings. The ESCO will typically complete an audit, obtain contractor bids, manage the installation, and finance the project. Energy cost savings are then shared between the ESCO and the building owner, with the ESCO’s share of savings paying for the ESCO’s services, including the cost of capital. Some of the key benefits include: 1) Building owners avoid upfront project costs thanks to the financing from ESCO; 2) ESCOs provide technical expertise for implementing measures; 3) Risk may be reduced by including a savings guarantee in the project contract.

Performance contracts are complicated by the technical nature of a large energy efficiency project and the complex and nuanced calculations they require. Measurement and verification of savings becomes a critical and sometimes the controversial part of the contract and project, especially for larger investments where the contract term may exceed ten years. In response to the complexity of designing and executing performance contracts, several organizations offer detailed guidance on energy performance contracting.

Business Case for Upgrading Building Performance
In the evaluation of the performance improvement, all the benefits obtained due to the retrofitting actuation must be considered. The benefits can be divided in two groups:
Cost saving benefits Once the owner/tenant understands the benefits of energy efficiency, s/he will need to develop a project-specific business case that will ensure the project meets long-term cost-effectiveness requirements. These analysis methods quantify a project’s overall financial impact in different ways.

  • Simple Payback Method
  • Net Present Value (NPV)
  • Internal Rate of Return (IRR) and Modified Internal Rate of Return (MIRR)
  • Life-Cycle Cost (LCC)

Energy benefits will pay back the initial investment, but there are organizational challenges to overcome such as market-related and regulatory risks that building owners should also consider.

Additional benefits In addition to the energetic savings, and the consequent economic savings, there are “side products” resulting from the retrofitting actuation, which must be also taken into account at the performance improvement assessment. These can be divided into quantitative or qualitative benefits.

Quantitative Benefits:

  • Reduced O&M expenditures
  • Extended equipment life
  • Increased rental value
  • Increased occupancy rates

Qualitative Benefits:

  • Reduced environmental impact of operations and progress towards sustainability-related objectives.
  • Marketing and public recognition value for energy saving practices and improved sustainability.

Improved indoor environmental quality (e.g., air quality, noise and lighting levels), which leads to more satisfied building occupants and higher productivity.