A Staged Approach for Energy Retrofitting an Old Service Building: A Cost-Optimal Assessment

Abstract

Office buildings built before the pre-1960 age constitute a relevant group for analyzing the energy performance of the Portuguese building sector. A dynamic energy simulation was used to assess the energy performance of an existing office building located in the town of Bragança, Portugal. By using a staged renovation approach, two passive technologies applied to the building envelope and an efficient domestic hot water system were selected and a financial evaluation through the net saving (NS) method was undertaken to choose the best efficiency measures/packages for improving the building’s energy performance. Real discount rates of 3% and 1% were used in the financial evaluation. Considering the real discount rate of 3%, the results showed that only two out seven retrofit options had a positive financial return. By using the real discount rate of 1%, all retrofit options were found to be financially efficient. The results of the study corroborated those of earlier works that found that the financial profitability of energy renovation investments is very sensitive to the discount rate used in the analysis. The results of the study also suggested that the staged renovation approach used in the analysis is economically feasible, and that this approach is an alternative to one-step renovation approach to help to achieve the country´s energy and climate targets by 2030. Suggestions for future research conducted for office buildings in the different climate zones and other age groups in Portugal are proposed.

Impact of insulation materials and wall types of reference buildings on building energy efficiency with three methods in Çorum city

“…Discount rate depends on the interest rates set up by national central banks. As a consequence of 365 energy‐efficient measures applied to a public historical building in Turkey and a sensitivity analysis performed to detect the cost optimal energy calculations with considering the inflation rate, different interest rates, and calculation periods demonstrated that a reduction in economic parameters decreased the cost effectiveness in the scenarios having high initial investment costs, while application of two passive technologies to office building located in the town of Bragança, Portugal with using the real discount rates of 3 % and 1 % illustrated that the financial profitability depends on discount rate used in the analysis very much [30, 32].…”

“…Two passive technologies namely; internal insulation for roof and vertical envelope applied to the building and an installation of aerothermal heat pump for the domestic hot water system were selected by using a staged renovation approach to assess the energy performance of an existing office building located in the town of Bragança, Portugal and a financial evaluation through the net saving method was made with using the real discount rates of 3 % and 1 % to choose the best efficiency measures for improving the building's energy performance. The results of the study demonstrated that the financial profitability of energy renovation investments was very sensitive to the discount rate employed in the analysis [32].…”

Improving Life Cycle Sustainability and Profitability of Buildings through Optimization: A Case Study

“…Payback time, Net Present Value (NPV), and Internal Rate of Return (IRR) are the most common methods used for estimating economic impact of investments from a life cycle perspective [29,[52][53][54][55][56]. Payback time estimates the required time to recover the cost of an investment [56]. On the other hand, NPV determines the present value of all future cash flows, including the investment costs [29,[54][55][56].…”

“…Payback time estimates the required time to recover the cost of an investment [56]. On the other hand, NPV determines the present value of all future cash flows, including the investment costs [29,[54][55][56]. Finally, IRR shows the discount (or interest) rate when the NPV is equal to zero, at the end of the assessed time interval [52,53].…”

“…Finally, IRR shows the discount (or interest) rate when the NPV is equal to zero, at the end of the assessed time interval [52,53]. The main differences between NPV and IRR are that the NPV method accounts for the discount rate and supports the results in the form of a currency value, while IRR results are in the form of a percentage where the higher the IRR, the more satisfactory the project becomes [52,56]. Some studies have identified NPV as a robust method for decision making and estimating the impact of various energy efficiency measures on a building's life cycle cost [29,[54][55][56].…”