Sustainable Construction A Life Cycle Approach in Engineering

Because of all possible combinations of individual characteristics and requirements of the buildings
it may happen that two, at the first glance similar, buildings have very different optimal solutions.
The proposed decision model, as already stated in introduction, can only be used for buildings
that are publicly owned. One of their main features is the fact that they normally do not go on
sale on the open market. The increase of their market value after retrofitting is therefore not important.
Consequently we are, from the financial perspective, primarily interested in what will
be the cost of capital maintenance, routine maintenance and administration throughout a predefined
period. Further, one is interested also in capital maintenance costs related benefits.
There are three major types of benefits associated with retrofitting of the publicly owned building.
First type of benefit is associated with energy rehabilitation of the building. The aim of
energy rehabilitation is to consume less energy for heating, cooling, ventilation and other types
of energy related processes.
Second type of benefit is more difficult to determine. This benefit appears at the occurrence of a
natural disaster (e.g. earthquake), if the building is appropriately reinforced for the certain type
of natural disaster. The extent of the damage done by a potential natural disaster for two cases;
un-retrofitted building and retrofitted building has to be assessed in the model. The difference in
damage is equal to the benefit we receive from investment in strengthening the building. In addition
to direct damage to the building, indirect damage, such as number of days the building is
not applicable, the cost of temporary relocation to another location, etc, can also bi considered.
Third type of benefit is associated with the increased value (but not market value) of the building
due to its renewal (investment). Each building has, irrespective of its purpose, a certain value
in terms of inbuilt material and equipment. As the proposed model only compares different
solutions for a single building, we do not need to know the total value of the inbuilt material and
equipment of the building. The value of the potential investment is the only interest, as the value
of already built in material and equipment is the same in all cases. Benefits of newly integrated
materials and equipment are already considered in the above-mentioned criteria (energy conservation,
seismic safety), but only for the time frame of the analysis. As a consequence, the initial
value of the material can not be considered. Only the value of the material after the time frame
of analysis affects the solution. With considering these values in the decision model we ensure
that the benefit/value of each material is accounted over its entire lifetime, not only for the time
frame of the analysis.
To summarize, the decision model takes into account the following information/criteria:
• Cost of rehabilitation of the building and its energy-related and possible other benefits.
• Costs and benefits related to improved seismic safety.
• The residual value of investment measures after the time frame of analysis.
The values of selected criteria must be determined as precisely as possible. In order to achieve
this, we have to carry out the following steps:
• Determine the building’s current state.
• Consider all possible solutions for retrofitting the building.
• Estimate the costs of all planned investments.
• Estimate the costs of maintenance and management of the building.
• Estimate all benefits that will arise as a result of planned investments.
• Estimate the residual value of investment measures after the time frame of analysis.
• Determine the appropriate discount rate.
4 DECISION MODEL
If the proposed decision model is to obtain objective and reliable results, values of all selected
criteria must be objectively evaluated. When the values of costs and benefits of all criteria are
determined they must appropriately aggregated into the final result. This needs to be done for
every potential solution.
Since in the decision model considered costs and benefits will not appear at the same time all
future values must be translated into present values. This is done by using discounting with
which we get net present values for all future costs and benefits and consequently net present
values for all criteria. At the end of the analysis obtained values of all criteria are summed up
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