Life Cycle Economic Performance Research Articles

Economic sustainability benchmarking of modular homes: A life cycle thinking approach

Sustainable built environment has been of interest to many stakeholders in the recent years. However, life cycle economic performance as one of the key dimensions of sustainability has not been sufficiently investigated for buildings constructed using off-site construction methods such as modular construction. This research has proposed a framework to benchmark the life cycle economic sustainability of single-family modular homes. First, suitable economic performance criteria were selected and suitable measurable economic performance indicators were developed under each criterion. A performance level function was established for each indicator by which all indicators can be calculated and presented by a normalized performance level that enables combining quantitative and qualitative indicators. Subsequently, a multi-criteria decision analysis-based methodology was employed to develop a set of economic sustainability indices at the criteria level and also at the overall economic sustainability performance level. To compare and contrast the developed indices of a given modular building with the performance of similar conventional buildings, suitable performance benchmarks scales were established using the data of the historical economic performances of conventional homes. To examine the application of the proposed framework, two case study modular homes in British Columbia, Canada were analyzed. The results showed that both benchmarking homes performed ‘Excellent’ with respect to the overall economic sustainability. However, improvements are required to enhance the economic performance with respect to a number of criteria. The proposed framework can assist the construction decision makers, developers, and contractors with making informed decisions on the selection of the construction method. Furthermore, it can be used to address the underperforming areas over the life cycle of a modular building, even if the decision on the construction method has already been made.

Integrated environmental and economic life cycle assessment of improvement strategies for a ceramic industry

Industry is accountable for over one quarter of EU final energy consumption and one fifth of carbon emissions. To meet EU targets towards carbon neutrality, efforts need to take place in different industrial sectors, especially in energy intensive ones. Methodologies and tools aimed to support decision towards both cost and emission reduction targets are key to boost the adoption of cleaner production practices in industry. As an energy and resource intensive sector, the ceramic industry needs support at identifying and implementing solutions to lower its environmental impacts while being economically feasible. Thus, this work proposes a methodological approach to assess the environmental and economic life-cycle performance of alternative improvement scenarios for a ceramic sanitaryware manufacturing plant. By analyzing the actual process energy consumption and existing waste heat potential, three waste heat recovery scenarios are assessed and compared to the existing system to reduce natural gas consumption. Furthermore, aiming to lower the embodied emissions associated with electricity consumption, the installation of an on-site photovoltaic plant is also studied. The results show that, by applying heat recovery from flue gases to preheat combustion air, the industry may achieve a significant reduction of the environmental impact embodied in their products (−13% of CO2-eq emissions), while attaining notable economic savings with assumable payback period within the investment life-time. Results also show that despite the higher investment costs, the electricity self-production through photovoltaics strongly contributes to a greater reduction of several environmental impacts (up to −33% CO2-eq), with higher economic savings and payback time. The proposed methodological approach proves to be useful to compare the environmental and economic benefits of investment decisions and raise industrial confidence in strategies towards carbon neutrality.

Future-proofing and monitoring capital investments needs throughout the life cycle of building projects

It is increasingly important justify not only the initial capital investments needed at an early stage of a building project, but also all other subsequent costs throughout the building life-cycle. These involve an understanding of the running costs in the use stage and also appropriate long-term capital investment planning of future rehabilitation investments needs. To achieve this, several research efforts have been made to increase the understanding of complex building system and subsystems degradation processes in the post-construction period and to develop life-cycle-cost databases. But there is a lack of expedite decision support tools that can assist the future-proofing of design decisions at early stage of the building life-cycle and link those to the economic life-cycle performance. This paper presents an indicator-based approach (Building Investment Index, BII), which also allows the monitoring of the economic life-cycle performance of building projects at any moment in time. BII is applied in a case study of 166 public school building constructed in Portugal since 1942 and totally refurbished in 2009. Post-construction investment costs are estimated until 2071. It is show and proven how to use BII to future-proof decisions and to monitor and optimize long-term investment plans for building systems, subsystems and elements.

Uncertainty of Energy and Economic Performance of Manual Solar Shades in Hot Summer and Cold Winter Regions of China

Occupant behavior is recognized as a major source of discrepancy between simulated and actual energy consumption. This study investigates the uncertainty of energy and economic performance of manual solar shades for the south facade. A developed stochastic model for manual solar shades based on a discrete-time Markov chain method was constructed in Building Controls Virtual Test Bed (BCVTB) for co-simulation with EnergyPlus. The stochastic shade model was compared with deterministic models concerning energy savings potential and life cycle economic performance at different building scales (i.e., from a single room to a whole building). The results show that annual energy uncertainty, due to occupant behavior, on manual shades can be neglected at the building level, whereas for sizing heating equipment, energy uncertainty should be considered. The payback period for manual shades is about 10 years and, in general, a larger building has a higher economic performance. Comparative analysis shows that there is a relatively big performance overestimation or underestimation by commonly used deterministic models in building simulation tools, and thus may lead to a biased economic analysis or even an inappropriate design decision when comparing different energy-saving measures.

Historical analysis of the economic life-cycle performance of public school buildings

ABSTRACTScientific community and practitioners of the Architecture, Engineering and Construction (AEC) sector have been developing life-cycle cost (LCC) concept for the past decades. However, information on a building’s economic performance throughout its life-cycle is seldom readily available or accurate. This hinders the fulfilment of recommendations of international and regional standards, procurement guidelines and regulations, and for building management (BM) professionals to fully incorporate the LCC concept into their daily practice. This paper seeks to contribute to solving these difficulties by presenting a conceptual framework that enables LCC-informed decisions in BM, together with its empirical application to a portfolio of 158 public school buildings in Portugal (constructed area of 1,437,594 m2). It involved the gathering, organization and treatment of historical data of school buildings originally constructed from 1942 onwards. The historical analysis is presented in the form of three types of economic life-cycle key performance indicators (time series, indexes and relative ratios). It originated a database with more than 1.4 million results that offer a profound understanding of historical economic performance of this portfolio. The results can be adapted and used to benchmark or estimate construction, operation, maintenance, repair, replacement, rehabilitation, energy consumption, water consumption and deconstruction costs of buildings throughout the world.

Versatility vs. retrofittability tradeoff in design of non-transport vessels

In this paper, we study the relationship between economic performance and flexibility for non-transport vessels. More specifically, we investigate the difference between two means of achieving flexibility: retrofittability and versatility, i.e., the ability of a vessel to satisfy diverse needs with or without change of physical form, respectively. A model is presented to study this relationship, where we first generate design alternatives with relevant, flexible properties before we subsequently evaluate the design alternatives based on their expected discounted economic lifecycle performance. The evaluation model is based on a two-level decomposition of the planning horizon to handle temporal complexity, using scenario planning and Epoch-Era analysis (EEA) for long-term strategic considerations, and Monte Carlo simulation and optimization for medium-term tactical ship deployment. The proposed model is applied to an offshore construction ship design case. Findings indicate that retrofittability can increase economic performance significantly for non-transport vessels operating in an uncertain heterogeneous context.

Enhancement of biogas production from food waste and sewage sludge – Environmental and economic life cycle performance

Management of municipal solid waste is an efficient method to increase resource efficiency, as well as to replace fossil fuels with renewable energy sources due to that (1) waste to a large extent is renewable as it consists of food waste, paper, wood etc. and (2) when energy and materials are recovered from waste treatment, fossil fuels can be substituted. In this paper results from a comprehensive system study of future biological treatment of readily degradable waste in two Swedish regions are presented. Different collection and separation systems for food waste in households have been applied as well as technical improvements of the biogas process as to reduce environmental impact. The results show that central sorting of a mixed fraction into recyclables, combustibles, biowaste and inert is a competitive option compared to source separation. Use of pellets is beneficial compared to direct spreading as fertiliser. Fuel pellets seem to be the most favourable option, which to a large extent depends on the circumstances in the energy system. Separation and utilisation of nitrogen in the wet part of the digestion residue is made possible with a number of technologies which decreases environmental impact drastically, however to a substantial cost in some cases.

Analyzing the Tradeoffs Between Economies of Scale, Time-Value of Money, and Flexibility in Design Under Uncertainty: Study of Centralized Versus Decentralized Waste-to-Energy Systems

This paper presents and applies a simulation-based methodology to assess the value of flexible decentralized engineering systems design (i.e., the ability to flexibly expand the capacity in multiple sites over time and space) under uncertainty. This work differs from others by analyzing explicitly the tradeoffs between economies of scale (EoS)—which favors designing large capacity upfront to reduce unit cost and accommodate high anticipated demand—and the time value of money—which favors deferring capacity investments to the future and deploying smaller modules to reduce unit cost. The study aims to identify the best strategies to design and deploy the capacity of complex engineered systems over time and improve their economic lifecycle performance in the face of uncertainty by exploiting the idea of flexibility. This study is illustrated using a waste-to-energy (WTE) system operated in Singapore. The results show that a decentralized design with the real option to expand the capacity in different locations and times improves the expected net present value (ENPV) by more than 30% under the condition of EoS α = 0.8 and discount rate λ = 8%, as compared to a fixed centralized design. The results also indicate that a flexible decentralized design outperforms other rigid designs under certain circumstances since it not only reduces transportation costs but also takes advantage of flexibility, such as deferring investment and avoiding unnecessary capacity deployment. The modeling framework and results help designers and managers better compare centralized and decentralized design alternatives facing significant uncertainty. The proposed method helps them analyze the value of flexibility (VOF) in small-scale urban environments, while considering explicitly the tradeoffs between EoS and the time-value of money.

Improving the Lifecycle Performance of Engineering Projects with Flexible Strategies: Example of On‐Shore LNG Production Design

ABSTRACTThis paper presents an innovative flexibility analysis as a practical, effective procedure to improve the expected value of large‐scale, capital‐intensive projects when there is market uncertainty. Its novelty lies in its approach and scope. Its approach develops understanding of the drivers of the value of flexibility, so as to build acceptance among decision‐makers. Its scope explicitly considers the combined effects of uncertainty, economies of scale, learning, and geographic distribution. It demonstrates how these factors combine to impact the benefits of flexibility in the early stages of design and project evaluation in the context of uncertainty. It makes this point through a specific example: the long‐term deployment of liquefied natural gas (LNG) technology to supply the transportation market. It contrasts the base case fixed design (a big centralized production facility) with flexible modular designs that phase capacity additions over time and space. The proposed flexibility method compares design alternatives based on several indicators of economic lifecycle performance (Net Present Value (NPV), Initial Capex, etc.). Results indicate that flexible modular deployment strategies can significantly improve the economic performance of large, expensive projects. As sensitivity analyses show, the improvements can be significant over a wide range of analytical assumptions. An important insight is that higher learning rates increase the benefits of flexibility, counteracting the effects of economies of scale. Overall, the study shows that flexibility in engineering design of major production facilities such as LNG plants has multiple, supporting advantages due to uncertainty, learning, and location.

Generating flexibility in the design of engineering systems to enable better sustainability and lifecycle performance

Designing an engineering system that is both environmentally and economically sustainable is a challenging task. Designers need to cope with socio-technical uncertainties and design systems to provide high performance during long lifecycles. Flexibility in engineering design provides ways to address such challenges by making engineering systems changeable in the face of uncertainty. It is difficult, however, to identify suitable system elements for designing flexibility, especially when subjected to multiple sources of uncertainty and complex interdependency between socio-technical and systems elements. This paper considers embedding flexibility into the engineering design as a mechanism to ensure better sustainability and to improve economic performance in long-term lifecycles. The main contribution is a novel methodology to identify valuable opportunities to embed flexibility as a way to deal pro-actively with uncertainty in market and environment. The proposed methodology integrates Bayesian network into engineering system design to effectively model complex change propagation in the flexibility identification process. It helps structure concept generation activities by identifying candidate areas to embed flexibility in the system. It compares favorably to other concept generation methods (e.g., prompting, brainstorming) that require modeling and evaluation of a large number of concepts generated in order to identify the ones offering better performance. It differs from other flexibility enabler identification methods by considering indirect as well as direct dependencies, in addition to the probabilistic nature and risk resulting from possible changes. Another contribution is the demonstration application of the proposed methodology through the analysis of a waste-to-energy technology in Singapore based on anaerobic digestion. Results show that the expected net present value of the flexible design concepts provides more than 10 % improvement over a fixed benchmark design in terms of economic lifecycle performance. This design is conducive of better economic sustainability via additional power generation and better use of resources. Results also indicate that the flexible design can reduce downside risks and capitalize on upside opportunities significantly.

Handling risk of uncertainty in model-based production optimization: a robust hierarchical approach

Model-based economic optimization of oil production suffers from high levels of uncertainty. The limited knowledge of reservoir model parameters and varying economic conditions are the main contributors of uncertainty. The negative impact of these uncertainties on production strategy increases and becomes profound with time. In this work, a multi-objective optimization problem is formulated which considers both economic and model uncertainties and aims to mitigate the negative effects i.e., risk of these uncertainties on the production strategy. The improved robustness is achieved without heavily compromising the primary objective of economic life-cycle performance. An ensemble of varying oil price scenarios and geological model realizations are used to characterize the economic and geological uncertainty space respectively. The primary objective is an average NPV over these ensembles. As the risk of uncertainty increases with time, the secondary objective is aimed at maximizing the speed of oil production to mitigate risk. This multi-objective optimization is implemented separately with both forms of uncertainty in a hierarchical or lexicographic way.

8.1.2 Quantifying the Value of Flexibility in Design and Management of Onshore LNG Production System

AbstractThis paper presents the results of an analysis focusing on the evaluation of a large‐scale onshore liquefied natural gas (LNG) project under market uncertainty and flexibility. Market studies have shown increasing trends in LNG demand in the next few decades in the transportation sector. A proprietary technology has been developed as a solution for offshore associated gas applications for small‐to‐medium scale capacity (~0.2 to 1 million ton per annum or MPTA). This technology is also suitable for onshore micro‐LNG applications as a company is evaluating business opportunities in the transportation industry. This study is concerned with the long‐term design and deployment of the technology in a growing market to provide LNG for transportation purposes. There are currently two designs considered: 1) small micro‐LNG production facilities combined with fueling stations, and 2) a big centralized production facility with satellite fueling stations along the pipeline. A third design alternative is developed based on a flexible phasing deployment strategy to improve the economic performance in comparison with other design strategies. To compare the design alternatives under uncertainty, a structured methodology is introduced and applied based on several economic lifecycle performance indicators (e.g. Net Present Value, Initial Capital Expenditure (CAPEX), etc.). Different demand scenarios are incorporated explicitly in the project evaluation procedure. The final results demonstrate about 36% value improvement for the flexible design as compared to a centralized inflexible design strategy, increasing as uncertainty in parameter estimation increases. A Graphical User Interface (GUI) is developed to simplify evaluation procedures, and provide better support for decision‐making and dissemination across a major company's activities. The flexible design helps deliver more value to the clients.

Life-cycle impact ‘cradle to cradle’ of building assemblies

This paper proposes an integrated approach for the evaluation of the equivalent cradle-to-cradle life-cycle impact of building assemblies, including the energy, environmental and economic impacts. The application of this approach is exemplified with external walls of buildings. This integrated approach follows European standards: environmental performance is evaluated following a life-cycle assessment methodology; energy performance is gauged by the consumption of energy for heating and cooling; and the economic module is based on the whole-life costing methodology. The use of an environmental impact assessment method that converts the results of impact categories into an economic unit allows the comparison and selection of alternatives through the addition of the energy, environmental and economic life-cycle costs. The main advantage of this approach is the simultaneous comparison of the energy, environmental and economic life-cycle performance of alternatives (that do not have to be functionally equivalent) without the need to change their characteristics to make them comparable.

Smart Green Buildings of Tomorrow

Fast population growth and rapid development of our communities have exerted a huge impact on our natural environment. The design, fabrication, construction and operation of buildings in which we live and work are responsible for significant consumption of our natural resources. Taking the United States as an example, buildings account for 39% of total energy use, 68% of total electricity consumption, 30% of landfill waste, 38% of carbon dioxide emissions and 12% of total water consumption [1] and China is catching up. In order to alleviate the problem, smart green buildings development could well be considered as one of the viable choices. As its name suggests, smart green buildings combine ‘‘smart’’ and ‘‘green’’ concepts. Green buildings are about resources efficiency, lifecycle effects and building performance while keeping the lowest impact to the environment. Smart buildings, in which the core component is an integrated building technology system, are about construction and operational efficiencies, enhanced management and occupant functions. Therefore, the environment, economy and society can benefit from smart green buildings by enhancing and protecting biodiversity and ecosystems, improving air and water quality, reducing waste streams, conserving and restoring natural resources. Besides, smart green buildings can reduce operating costs, improve occupant productivity, enhance asset value and profits and optimize life-cycle economic performance. They can also enhance occupant health and comfort, improve indoor air quality, minimize strain on local utility infrastructure and improve overall quality of life. From another viewpoint, the minimum function of traditional buildings is to provide a shelter. Strength, durability, cost on selecting building materials, planning and construction are focused by civil engineering while aesthetics, comfort and attention to fulfilling psychological needs of the occupant are stressed by architecture. However, smart green buildings seek to conserve and utilize natural resources, emphasize eco-friendly construction and minimize carbon footprint on a global scale. The trend of the development is that smart green buildings should manage to cater more for the needs of humans, with increasing magnitude of personalization. People will be in control of the environment and be able to tune it to their needs. A lot of research activities are being carried out to make our buildings smarter and greener. Absorption, adsorption and various advanced thermodynamic cycles could be considered as renewed interest in thermally activated cooling and heating systems. Micro-channel systems could help improve heat and mass transfer, leading to reduction of fluid inventories, material utilization and environmental impact. Integrating micro-channel systems into smart green buildings could make those buildings more energy efficient. Apart from that, integrating novel heat transfer fluids (e.g. nanofluid) [2] as well as improved heat and mass transfer devices into heating and cooling systems can also further reduce the energy consumption and ecological footprint of some building systems. A trigeneration process is another option to increase the efficiency in thermal and electric generation. Recently, the tri-generation system has been used for power generation and also for air-conditioning systems. Comparing with the co-generation system, tri-generation refers to district energy which can achieve a higher efficiency with a smaller environmental impact. With a

Hierarchical Long-Term and Short-Term Production Optimization

Summary Model-based dynamic optimization of oil production has a significant potential to improve economic life-cycle performance, as has been shown in various studies. However, within these studies, short-term operational objectives are generally neglected. As a result, the optimized injection and production rates often result in a considerable decrease in short-term production performance. In reality, however, it is often these short-term objectives that dictate the course of the operational strategy. Incorporating short-term goals into the life-cycle optimization problem, therefore, is an essential step in model-based life-cycle optimization. We propose a hierarchical optimization structure with multiple objectives. Within this framework, the life-cycle performance in terms of net present value (NPV) serves as the primary objective and shortterm operational performance is the secondary objective, such that optimality of the primary objective constrains the secondary optimization problem. This requires that optimality of the primary objective does not fix all degrees of freedom (DOF) of the decision variable space. Fortunately, the life-cycle optimization problem is generally ill-posed and contains many more decision variables than necessary. We present a method that identifies the redundant DOF in the life-cycle optimization problem, which can subsequently be used in the secondary optimization problem. In our study, we used a 3D reservoir in a fluvial depositional environment with a production life of 7 years. The primary objective is undiscounted NPV, while the secondary objective is aimed at maximizing shortterm production. The optimal life-cycle waterflooding strategy that includes short-term performance is compared to the optimal strategy that disregards short-term performance. The experiment shows a very large increase in short-term production, boosting first-year production by a factor of 2, without significantly compromising optimality of the primary objective, showing a slight drop in NPV of only -0.3%. Our method to determine the redundant DOF in the primary objective function relies on the computation of the Hessian matrix of the objective function with respect to the control variables. Although theoretically rigorous, this method is computationally infeasible for realistically sized problems. Therefore, we also developed a second, more pragmatic, method relying on an alternating sequence of optimizing the primary-and secondary-objective functions. Subsequently, we demonstrated that both methods lead to nearly identical results, which offers scope for application of hierarchical long-term and short-term production optimization to realistically sized flooding-optimization problems.

Hierarchical Economic Optimization of Oil Production from Petroleum Reservoirs

In oil production waterflooding is a popular recovery technology, which involves the injection of water into an oil reservoir. Studies on model-based dynamic optimization of waterflooding strategies have demonstrated that there is a significant potential to increase lifecycle performance, measured in Net Present Value. However, in these studies the complementary desire of oil companies to maximize daily production is generally neglected. To resolve this, a hierarchical optimization structure is proposed that regards economic life-cycle performance as primary objective and daily production as secondary objective. The existence of redundant degrees of freedom allows for the optimization of the secondary objective without compromising optimality of the primary objective.

Economic Analysis of Thermal Energy Storage Systems

This paper describes an investigation of the economic performance of a central chiller plant with thermal energy storage (TES) operating in a hotel in California and an office building in Wisconsin for the following three conventional control strategies: chiller-priority, constant-proportion, and storage-priority control. Since all control strategies depend on properly selected design parameters, the storage and chiller capacities as the primary design parameters were varied over a wide range, and the life-cycle economic feasibility of each possible design was assessed over a 20-year economic life using the net present value method. Measured cooling and weather data for both buildings were used in annual calculations to determine annual utility cost savings on the basis of one of four artificial rate structures. Trends in the life-cycle economic performance of TES systems as a function of chiller and storage capacities were revealed, and design guidelines were developed.