Economic Analysis of Energy-efficient Buildings in China

Journal of Shanghai Jiaotong University(Science) . Vol. E-12.No.5,2007 ,673~679Article ID: 1007-1172(2007 )05 0673-07Economic Analysis of Energy- efficient Buildings in ChinaHU Hao*(胡昊)， YANG Zhi-ming(杨志明)(School of Naval Arch.，Ocean & Civil Eng. , Shanghai Jiaotong Univ.，Shanghai 200240. China)Abstract: Applying energy-saving measures in residential buildings is usually constrained by the increase of initialinvestment." However, if it is analyzed from the view of energy cost and life-cycle cost. the energy-saving benefitcan offset the increase of initial investment. An analysis method based on life-cycle concept was developed to calcu-late the energy cost of residential building flats. Several uncertain factors were included into the model, making itmore accurate to reflet practical situarion. The model was solved using the software DeST and applied to one resi-dential building project in Shanghai. The case study shows that the initial investment (cost) is paid back during theoperational phase through less consumption of energy. It further indicates that the investment recovery period isbetween 10 and 19 years which are acceptable to households and developers in China.Key words; energy-saving+ energy cost; life cycle analysis; energy simulationCLC number: F 407. 9Document code: ANomenclaturetional mode in Year e(kWh)Iu./Ics - Accumulated heating/cooling load of the im-t- time(Year),t=0,... Tproved design scheme under actual opera-n- Building components,n= 1.2,. ,Ntional mode in Year l(kWh)m.s- The jth energy-saving measure for the nthEmn - Amount of annual energy saving required by thecomponentgovernment (kWh)s一Energy saving design schemes, s=1,2,-.SQ.,-Quantity when implementing the m. ;th measureJ/ac一Energ-fficiency rate. The ration of actualamount of energy consumption to simulatedof the sth design scheme (m', kg, etc)value in Year t (heating or cooling situation)p..- Unit price of the m.j/ th measure of the sth de-p'n/p'c - Energy price for heating/ooling in the start-sign scheme/(RMB Yuan/m’. Yuan/kg, etc)ing year (RMB Yuan/kWh)j - Fluctuation rate of pm.sp./Pc. - Energy price for heating/cooling in Year t..,-. Annual rate of operation cost for Ppm.,(RMB Yuan/kWh)w.;- Annual rate of maintenance cost for P=mn;m.:/ 7e. - -Increase rate of energy price for heating/cool-Jux- -The highest posible investment of energy-savinging in Year thandling(RMB Yuan)i,-Discount rate in Year tI'n/L'c - Annually accumulated heating/ooling loadof the initial design scheme under standardIntroductionoperational mode(kWh)Energy consumption of the building sector ac-Ln/Ic - Annually accumulated heating/cooling load ofcounts for about 28% of total energy consumptionhe improved design scheme under standardin China. In cold area, the rate is as high as 40%.I'n./I'cs - Accumulated heating/cooling load of theOn the other hand, 99% of existing buildings ininitial design scheme under actual opera-China did not take energy- efficiency measures[1.2].And most of new buildings did not take energy-Recelved date: 2007-01-17saving into account. The stock of housing is verylarge in China, 4. 2 billion m2 in urban areas andtainsable Building and Their Demonstration.Shanghai Comission of Science of Technol-21. 1中国煤化工. Furthermore,ogy(No. 03z12009)ChinaMH..CNMHGder.r worldwide,# E-mail;hhu@sjtu. edu. cnwithanssualsy-I JIstUli 山icw sruusingin the fol-674 HU Hao(胡昊)， YANG Zhi-mning(杨志明)lowing 15 years. Therefore , reduction of the ener-fied as a critical issue in promoting energy-savinggy consumption by residential buildings has be-of residential buildings. However, most of the pre-come a key issue in pursuing long-term develop-vious studies have concentrated on the descriptionment of the building industry.of the current situation or the analysis of one orVarious studies have been carried out to im-two factors of energyefficiency design. There arefew quantitative studies which address the cost fea-prove energy eficiency in residential sector, including researches on industry policy, design stan-sibility of energy-saving residential buildings usingdard and criterion, energy saving technologies andthe LCA and systematic analysis methods. Thissoftware simulation. Cost is a critical factor in thepaper develops an analysis method to calculate thedevelopment of energy efficient residential build-energy cost of residential building flats. Severalings. A number of studies have addressed this is-uncertain factors are included into this model,making it more accurate to reflect practical situa-sue.For example, Peterson'4conducted arion. The model is applied to one residential build-economic analysis of retrofitting existing house foring project in Shanghai.energy conservation. Andras et al[s] developed aneconomic evaluation concerning to energy conserv-厦Modeling Energy Cost of Residen+ing improvements of the building envelope.tial Building UnitsMany researchers have used life cycle assess-A mode! on the basis of life cycle concept isment (LCA) as a tool for measuring building eco-developed to calculate the energy cost of residentialnomic performance，including the benefits of ener-buildings in this study. It mainly considers the fac-gy saving. For example, Grifnfo] analyzed and il-tors which determine energy consumption and en-lustrated the rationality of American building ener-ergy cost, such as the cost of adopting energy-sav-gy-saving code based on life cycle theory. Anothering measures and total energy consumption in theimportant study relevant to the economic feasibilityfollowing utilization stage. Uncertain factors likeof a solar energy system was carried out bydiscounted rate, increase of energy price, energy-Rab17]. Recently, Osman et al[8] discussed the im-efficiency rate and so on are also included into theprovement of building energy system based on lifemodel. An indicator is proposed, the energy-effi-cycle theory with the consideration of economicciency rate represents the ratio of actual amount offactor. The adoption of residential energy-efficien-energy consumption t0 simulated value. In manycy upgrades was decided by the cost-benefit analy-cases, actual energy consumption is different fromsis methodEo].the simulated one. Some parameters like site loca-Some preliminary studies are available in Chi-tion and building function are given as known in-na. Zhu et al[io] carried out an economic assessmentformation and results from energy simulation arefor sustainable buildings with a consideration o{used as input for energy cost analysis in the model.energy efficiency based on life cycle theory. ZhaoThe model can be described by its decisionet al1] demonstrated that energy and economic ef-variable and parameters, the objective functions,ficiency of residential flats could be achieved withand the relevant constraints.the application of appropriate energy-efficiency de-1.1 Objective functionssign. Recently, some researchers turned to the(1) Cost of taking energy -saving measures.analysis of cost and investment of energy-savingLet Cc denote the cost of taking energy- savingmeasures. An international comparison indicatedmeasures for the sth design scheme and Cn ,denotehow to choose suitable measures through cost anal-the cost of using the m,sth measure.ysis[12]. The increase of initial investment of thec._ 5c.1)external wall insulation was acceptable and the en-中国煤化工ergy effect was quite obviousls].wherClearly , economic feasibility has been identi-YHCNMHGp..Economic Analysis of Energy-fficient Buildings in China675_The operational expenditure and maintenance odcosts are transformed to annual based cost, repre-1.2 Constraintssented by two coefficients Pm and vw in the mod-Constraints can be categorized as hard or soft,el.depending on the absolute requirement that the(2) Cost related to energy consumption. Letconstraints be satisfied. Hard constraints must al-CE.t denote the cost related to energy consumptionways be satisfied, while soft constraints can be re-of the improved design scheme in year t. It can belaxed. In this model, we define the following hardand soft constraints.calculated asCE.,= L.,.u. + Le.spc(2)(1) Hard constraints.where①The energy saving codes by Chinese gov-pn,= II(1 + 7nu)pl，L,= Qr.Lnernments specify the minimum requirement of en-ergy-saving[i*s. This hard constraint can be repre-pc.= II(1 + Pe.)p'c. L.,= ac,Ieosented asAs explained earlier, the actual operational(L+ l)- (In+ Lc)≥Emm (7)mode may be different from the standard opera-②Government regulations give some detailedtional mode, so the coefficients Qr, and ac, are usedrequirements of building components, includingin Eq. (2)heat transfer coefficient, window-wall ratio and soLet Cp denote the total cost of energy con-on1。They must be satisfied.sumption of the improved design scheme during③This study assumes that one building com-utilization phase. It is calculated by discountingponent can only adopt one energy-saving measure.CEs to present time④The investment recovery period cannot ex-Cx-2-CE(3)ceed the life cycle time of the building, that is:II(1 +i)Tc≤T(8)(2) Soft constraints. .(3) Economic benefit of energy-saving. Eco-nomic benefit of energy-saving in the tth year is de-①Real world circumstances limit the adoptionfined as the difference of energy consumption be-of certain energy-saving measures. That is, practi-tween the initial and the improved design scheme.cal factors such as environment, building struc-Let Ce,t denote cost related to energy consumptionture, climate characteristics and so on may lead toof the initial design scheme in year t and b, the eco-the impossibility of using certain energy -savingnomic benefittechnologies.b,=Cz.- CE,(4)②Total cost of taking energy -saving mea-sures cannot exceed the available investment ●Cie.- Pr.JLHr. + Pc.Lc.which is represented asLus= Crg,Lir，L比e.= c,Le(9)(4) Recovery period of initial investment. The③The acceptable investment recovery periodannual economic benefit is discounted to get theof energy -saving investment by common house-present value, B,, given asholders. In terms of economic benefits，household-B,=(5)ers always prefer shorter investment recovery peri-od. However, longer period may be acceptableTherefore, the investment recovery period canwhen more people realize the importance of energyefficient buildings.be calculated asTc=t-.B.-Cc .(6)Solving the Model Using DeSTB,- B-中国煤化工，In this study, single objective is considered,that is, to minimize the investment recovery peri-:MYHC N M H GDeST software.676 HU Hao(胡昊)， YANG Zhi-ming(杨志明)DeST provides users with a graphical interface and3 Case Studybasic data are extracted from the drawings andspecifications. Input parameters comprise project3.1 Data of the Caselocation, orientations, thermal characteristics oThe case considered is a six-story residentialthe exterior shell components (wall, roof, and fen-building of the reinforced concrete frame structure,estrations), characteristics of mechanical equip-with a construction floor area of 1 263 m'. Thement, thermal loading , characteristics of heatingground plan of the building is shown in Fig. 1.and cooling period, ventilation status and so on.Economic and physical information of energy- effi-The simulationi results including heating, coolingciency design are given in Tabs. 1 and 2. These da-and electrical loads are output in the form of ener-ta are obtained from the designers and constructiongy loads report. Application of DeST to buildingmaterial suppliers.industry has been approved by local authorities inShanghai and some other cities in China. Yan etalL5] indicated that the simulation results wereStairwellvery close to actual energy consumption.Even though DeST provides the function ofeconomic analysis, it does not meet the demands ofthis study. As a result, this pape develop the costanalysis module using energy consumption datBalcony_L Balconygiven by the DeST. Investment recovery period isused to represent the economical feasibility of theFig. 1 Ground plan of one residential building exampleenergy-saving schemes.Tab.1 List of energy-saving measuresHeat tranafer cofficient/Energy-saving measuresComponentsStructure composition[W. (m°.K)-I]Taking heat preservation measuresExternal wall0.74on external walls and roofingRoofing40 mm XPS0.65Heat preservation window withChanging windowsExternal window3. 1(Se=0. 83)double-layer center-hollow glassChange the window wall ratio of southChanging widow wall ratioand north wall from 0.6 to 0.4Adding horizontal sun- shadingSun-shading1 mm wide sun- shadingof energy -saving measures. Energy consumption ofTab.2 Unit price of energy -saving measuresthe initial and the improved design are simulatedUnit price /Measuresusing DeST and compared with each other. The(Yuan.m-2)simulations are based on the standard operationalTaking heat preservation205mode which is based on energy-saving codes mademeasures on externalRooling165by Chinese government authorities and is embed-walls and roofingded in the software. The simulation results areExternal Window650shown in Tab. 3.Energy cost analysis is then carried out usingAdding horizontalSun shading3the simulation results. Assume the energy price ofsun-shading中国煤化工the average power3.2 Energy Cost AnalysisThe initial design is improved by the inclusionYHCNMHGEconomic Analysis of Energy efficient Buildings in China677Tab.3 Simulation results of energy consunptionAnnual accumulated bheatAnnual accumulated coolAnnual accumulatedDesignsload index/(kWh.m-)load index/(kWh. m-2)heat load/kWhcool load/kWhInitial20.818.830 13327 203Energy6. 878. 039 98011 661-aving3.3 Discussionsituation when deciding the values of these parame-Technical energy-saving measures adopted inters. However, the focus of the case study is tothis case study are well developed and the opera-demonstrate the use of the simulation model. It istional and maintenance (O&.M) costs are thus notconvenient to change the values of the parametersconsidered. According to the simulation results ，in real world application, as what we present inthe investment recovery period will be 1~ 2 athe sensitivity analysis below.longer if the 0&M costs are included, which areFour scenarios of different value of discountedassumed to be certain proportion of the initial in-rate, energy price and energy-efficiency rate arevestment.constructed though more combinations can beThe electricity price in Shanghai is 0. 617formed in real world practice. A sensitivity analy-Yuan/kWh and 0. 307 Yuan/kWh from 7:00 tosis shown in Fig. 2 is further conducted with base-22:00 and 22:00 to 7:00, respectively. Air condi-line values as i=6%, 7=4%，a= 90%. The cal- .tioners are mainly used in the night and 0. 4culation results under these four scenarios are givYuan/kWh was used as energy price in this studyen in Tab.4. Energy-efficiency rate and price fluc-on the basis of a preliminary survey and calcula-tuation for implementing energy-saving measurestion. Due to the government control, energy priceare identified as the most sensible factors.in China will not rise annually as specified in thisInvestmentmodel. However, the increase of energy price inrecovery period/acertain year can be transformed to annually con-30卜. Discounted rateAnnual increstant increase. The CPI in China is close to 4%.* Annual inerease of20So 7 is assumed to be 4% in this case study.士Energy ecient rate22 t+ Price fucatuationThe extra cost due to the adoption of energyfor energysaving:saving measures was not handled as an increase ofmeasures18-the initial investment. Rather, a dedicated simula-Change 1%ion model was developed for three concerns.Firstly, the charge of energy-saving measures is-10060。60not included in traditional building cost. The sepa-ration of energy conservation cost from normalFig.2 Sensitivity analysis of uncertain factorsconstruction cost will provide a clear and detailedevaluation of these measures. Secondly, the opera-4 Conclusiontional and maintenance costs of each energy-savingmeasure are usually different. These differencesA method of analyzing energy cost was devel-can be addressed using the simulation model. Last-oped for residential buildings on the basis of lifely, this study contributes to the improvement ofcycle concept and energy simulation software. Newthe economic analysis module of DeST, and thedesigns with energy-saving measures were com-variables and parameters of the simulation modelpared against the initial scheme to show the effectform an interface between the DeST software andof difftheer measures. Ththe model.investl中国煤化工sed to comparecost aTYHCN M H G represented byIn this case study we tried to reflect practical678 HU Hao(胡昊)， YANG zhi ming(杨志明)the reduction of heating/cooling load index. Thismodel to an optimization model in future research.study also demonstrates the economic feasibility ofIn order to obtain more reliable input data aboutadopting energy-saving measures in residentialenergy consumption, the energy simulation soft-buildings. The case study shows that the initial in-ware DeST was used. This study also contributesvestment (cost) is paid back during the operationalto the improvement of the economic analysis mod-phase through less consumption of energy. It fur-ule of the DeST software. Additionally, the con-ther indicates that the investment recovery periodcept " energy cost" was proposed and it will helpbetween 10 and 19 years is acceptable to house-better understand energy saving measures.holds and developers. Calculation results from thisA preliminary study relevant to the economicmethod will help homebuyers and. house developersanalysis of energy efficient buildings was present-have a better evaluation of cost and benefit of ener-Although encouraging results have beengy-saving flats.achieved, only one case study was conducted.A simulation model based on the LCA andcurrent simulation model will be further extendedtechno-economic analysis theories was establishedto an optimization model in our future research. Irto analyze economic benefits of energy efficientaddition, more practical examples will be testedbuildings. It is expected to extend the currentusing the methods established in this study.Tab.4 Calculation results of investment recovery periodi=5% ,7- 0%。a= 100%i-5%.7-6%. a= 100%i=5%. =6%. a= 80%i=5%.7=6%. a= 120%T/aA,/kWhF/YuanA./kWhA:/kWhl/hWh0-174 345- 174 345-17434513 775-16057014 601-159 74411 681-16266417 521- 156 82411 332-11172815 163- 99 94212 130-114 8238 196- 85 06199323-71 67515 747-37 83512 598-6513718 896- 10 530108879- 62 79615 898-2193712 718- 52 41919 0788 54818 457-5433916 048-5 88912 838- 39 58128 053- 46 2861620010 31112 960- 26 621147 305-31 311-13 208- 330156 957-24 35413 33413 00486 009-5 4095 723r。18. 9511. 36.14. 029. 55ronment and energy savings in the building sector inChina. [EB/OL] http: // www. aderme. fr , 2003.Acknowledgment The authors are grateful to[3] National Bureau of Statistics of China. Chinesethe School of Architecture , Tsinghua University forStatistics Yearbood 2002[M]. Beijing: China Statis-providing the softrware DeST freely for academictic Press, 2002(in China).use. Thanks are also given to Mr. Lei Zhang, En-[4] Peterson S R. Retrofitting existing housing for ener-y conservation: an economic analysis [R]。 Finalgineer of Shanghai Construction (Group) Co. forReport National Bureau of Standards, Building Sci-providing the data of energy-saving measures.ence Series, Washington, 1974.References[5] Armuth A，Szoke K. Economic evaluations con-cerned with energy conserving improvements of the[1] BP (British Petroleum). [EB/OL]. http: //www.中国煤化工-arian examples [C]//bp. com ,2005.，Proceedings of the[2] French Global Environment Facility (FFEM). Envi-MHC N M H Glolume la; Key noteEconomic Analysis of Energyelficient Buildings in China679Papers, Invited Papers and Submited Papers, 1980，[1] ZhaoJ Y, 1in W. Bref analysis on ppied economi-256 - 260.cal eficiency of building energy conservation technol.[6] Giffin T M. 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