Life Cycle Cost calculation

Figure: LCC calculation in CRAVEzero

The ISO 15686-5:2008 provides the main principles and features of a LCC calculation, while the European Code of Measurement describes an EU-harmonised structure for the breakdown of the building elements, services, and processes, in order to enable a comprehensive evaluation of the building life costs in this study.

According to the above-mentioned ISO standard, the LCC of a building is the Net Present Value (NPV), that is the sum of the discounted costs, revenue streams, and value during the phases of the selected period of the life cycle.

The NPV is calculated as follows:

Construction, operation and maintenance phases have been considered, whereas end-of-life stage was discarded as the analyzed period is 40 years, less than an average building lifespan.

LCC calculation was implemented in two steps along CRAVEzero project. First, for the analysis of the 12 case studies coming from project partners. Second, for the parametric analysis.

Key performance indicators

The four main indicators used for the analysis of the calculation results are:

  • financing costs
  • life cycle costs
  • balanced primary energy demand
  • balanced CO2 emissions.

The financing costs include costs for planning and actual investment in the form of the construction of the building (life cycle phases 2 and 3 from Table 6). The life cycle costs were described in chapter and include the life cycle phases 2, 3, 4, 5 and 6 (only residual value) from Table 6.

“Balanced” in the case of primary energy and CO2 emissions means that the self-consumption of the PV system was considered, transferred into primary energy and CO2 emissions by the conversion factors for electricity and then subtracted from the calculated primary energy demand and CO2 emissions.

Written as a formula, using the balanced CO2 emissions as an example:

CO2 emissions balanced  =
CO2 emissions  – self-consumption of PV  x conversion factor of electricity

The primary energy demand and the CO2 emissions only consider the energy respectively the emissions from the building operation. Energy and emissions from the building materials, so-called “grey energy” and “grey emissions” are not considered in this report and therefore nor included in these values.[

Assumptions and Boundary Conditions

This section needs to be divided into 2 parts since different approaches were adopted for the LCC calculation during the project, although the construction costs of the analyzed case studies were provided by the project partners in both cases. The buildings have already been constructed, and real cost data was available.

First, for discounting future costs, including annual energy and maintenance costs, over the 40 years lifespan, an average interest rate of 1.51% for the period from 2009 to 2016 (years of construction of the oldest and the most recent case study) was adopted. General inflation was not taken into account since this parameter influences on all case studies in the same way.Second, the costs for the varied technologies and building elements were also directly provided by the project partners. If necessary, assumptions were made according to the CRAVEzero database. All costs are reported as “net costs” (excluding VAT). Land costs and excavation costs were on principle taken into account. The considered buildings are located in Austria, France, Italy, Germany and Sweden. Therefore climate data files were generated with Meteonorm As mentioned above, the economic evaluation of the variants is based on an observation period of 40 years. This observation period was chosen because this duration is feasible for private housing, as well as for property developers. As a financing scheme, a bank loan was chosen with a credit period time of 25 years and an interest rate of 3 %. The equity interest rate for the equity investment was set to 1.51 %, the inflation rate to 2 % and the discount rate of the used capital investment was 3 %. [All these values were taken from the CRAVEzero LCC-Tool. The different technical maintenance costs and lifespans of the different components are taken into account and based on the gathered data in the report ‘Spreadsheet with LCCs’ and the CRAVEzero database. Cost drivers can also be determined by evaluating individual parameters concerning costs. The following cost items are taken into account: total costs, financing costs, energy costs including basic fees, replacement investments, operation costs, maintenance costs, repairs and residual values. The energy costs also take into account the revenues from the grid feed-in of the electricity generated on the building from renewable sources (e.g. PV electricity). No additional follow-up costs such as administration, insurance, cleaning, security services, building services and demolition costs are included in this report. Rental incomes are not taken into account. All costs are calculated using the “CRAVEzero life-cycle cost tool”, which was developed in the project KoPro LZK+  and CRAVEzero.

Table 2: Boundary condition for economic evaluation

Economic boundary conditions Reference
Observation period of life-cycle cost 40 years
Equity interest rate 1.51 %
Inflation rate 2 %
Discount rate 3 %
Credit period 25 years
Interest rate bank credit 3 %

Operational costs

To provide a homogeneous and comparable estimation of the energy costs, the evaluation is based on the calculated energy demand by using the PHPP evaluation tool. In particular, for estimating both the costs and the revenues (due to the renewables installed), the energy produced from renewables is considered in the energy balance as a positive contribution to energy consumption, and the revenues from the renewables have been discounted from the energy costs.

Energy Prices and Price Increase

The energy costs are calculated for each variant. Based on the energy demand calculated in PHPP of each variant the resulting cost of each energy carrier was determined based on final energy consumption. If PV is present in the specific variant, the electricity demand was reduced by the share of self-consumption of the PV-electricity. The PV surplus electricity, which cannot be used directly in the building, was fed back to the grid at significantly lower rates. The electricity prices were provided by the partners and are reported in Table 3. The overall annual energy costs were determined based on final energy consumption and the associated energy prices. The resulting life cycle cost was taking into account an energy price increase over the observation period by an annual percentage (Table 4).

Table 3: Energy prices as boundary conditions of the economic efficiency calculation

Natural Gas 0.060 0.086 0.095 0.125 EUR/kWh
Electricity 0.187 0.146 0.216 0.220 EUR/kWh
District heating 0.090 Not relevant 0.100 0.090 EUR/kWh
Wood pellets 0.050 Not relevant 0.070 0.050 EUR/kWh
PV feed-in tariff 0.048 0.060 0.070 0.060 EUR/kWh

Table 4: Energy price and feed-in tariffs in the four levels of the parameter „sensitivity“

Energy price increase per year 1.0 % 2.0 % 0.5 % 0 %
Increase of PV feed-in tariff per year 1.7 % 2.7 % 0.7 % 0 %

Maintenance costs

Maintenance costs were determined as a fraction of the initial investment costs per year. For the parameters, which are not covered in the case study, these factors were conducted from the CRAVEzero database. The most important building elements are listed in Table 5. The operation and maintenance costs affect only the building life cycle after the construction phase. These costs are particularly relevant for future owners, building operations and property managers. The analysis is based on standard values from EN 15459:2018 that provides yearly maintenance costs for each element, including operation, repair, and service, as a percentage of the initial construction cost.

Table 5: Summary of the most important maintenance costs and maintenance intervals

Exterior wall Maintenance Annually 1.5  % EUR/a
Floor construction Maintenance Annually 1.5  % EUR/a
Flat roof construction Maintenance Annually 1.5  % EUR/a
Windows and doors Maintenance Annually 1.5  % EUR/a
Ventilation system with heat recovery Maintenance Annually 4.0  % EUR/a
Air distribution system Cleaning and maintenance Annually 6.0  % EUR/a
District heating transfer station Maintenance Annually 3.0  % EUR/a
Ground source heat pump Maintenance Annually 3.0  % EUR/a
Air heat pump Maintenance Annually 3.0  % EUR/a
Thermal collectors Maintenance Annually 1.0  % EUR/a
PV system Maintenance Annually 1.0  % EUR/a

Replacement and renewal

The replacement of the construction components is necessary, especially for active components. The components of the building envelope have a high technical lifetime and will be not rebuilt, but demolition costs arise at the end of the life cycle. Note: The end-of-life analysis was not included in the parametric energy and cost calculations but a separate chapter was dedicated to this topic (see chapter Fehler! Verweisquelle konnte nicht gefunden werden.). [GF6] Active components of the building equipment are typically renewed several times during the lifetime of the whole building. In this report, an observation period of 40 years is chosen, which is a relatively low expected lifetime for the building envelope. This has to be adjusted if a higher observation period will be chosen. The building elements, with a lifespan lower than the observation period, are reinvested, and the remaining residual value is deducted after the observation period.

Table 6 lists the technical lifetime of the building elements, which were gathered from the D2.2 and the CRAVEzero database of WP4, and which were used in the Deliverables D6.1 and D6.2.

Table 6: Technical lifetime of prototypical nZEB elements

Exterior wall 40 Air heat pump 20
Floor construction 40 Buffer storage 20
Flat roof construction 40 Thermal collectors 20
Windows and doors 40 Ventilation unit with heat recovery 15
External sun protection 40 Air ducts, air distribution system 30
Interior wall and elements 40 Compressor cooling 15
Kitchen and bathroom furniture 40 Free cooling 40
Electric network 25 PV – modules 25
Heat distribution network 30 PV – inverter 15
Floor heating 40 Cables for PV and Inverter 40
District heating transfer station 20 Building automation system 40
Ground source heat pump 20