To many in the facilities management world the term Life Cycle Cost Analysis or LCCA is thrown around often. What does this mean? A Life Cycle Cost Analysis is a method for assessing the cost to construct, manage and maintain a facility over a set period of time. This exercise will look at all of the costs associated with your facility including energy costs, repair costs, maintenance costs, etc. and determine what is the best value option. Typically up to three or four different options are analyzed and the winning option is used as the basis of design for the project. Properly assessing the costs associated with all options is critical for making an accurate analysis.
Energy Modeling is a key factor in determining the utility costs for operating the facility. An energy model is a computer simulation of a building used to determine the utility costs on an annual basis. This information is critical when completing the LCCA to help determine the utility costs for each option being analyzed.
Recently, Expand Consulting Group was commissioned to generate an energy model for a federal facility with four different HVAC replacement options. This particular facility consisted of a central chilled water and heating water plant with hydronic air handlers. The four options that were modeled for the project included:
- Option 1 – Existing System to Remain As Is
- Option 2 – Existing System to Remain As Is with Heating Water Plant Upgrade
- Option 3 – Air Handling Unit, Chilled Water and Heating Water Plant System Upgrades
- Option 4 – Integration of Rooftop Package Units with Gas Heat and Terminal Units with Electric Heat
The table below shows the results of the energy model for each option.
As you can see from the table, Alternate 3 is the option with the lowest annual energy usage. Although it may be the lowest energy usage option, it may not be the best LCCA option. Further analysis is required to determine the maintenance costs, initial costs, replacement cost, etc. to find the best life cycle option.
This information can be so valuable to facility owners in determining the optimized systems to install for a new facility. Often during initial facility construction, this exercise is not done and project construction costs are prioritized. For facility owners, who will own and maintain the facility over the next 40 years, completing this exercise will bring better insight into the best approach. Once the initial infrastructure is installed, the costs associated with replacement will be much cheaper. In the future, making the change from one system type to another can be significantly more costly and evasive.
The generation of an energy model and associated life cycle cost analysis is a prudent move for any facility owner. The upfront analysis costs will be significantly less than the costs occurred while operating the facility over the next 40 years. Let Expand Consulting Group help determine the best approach for your next facility.