Buildings have an important role in mitigating, adapting, and developing resilience toward climate change. While green buildings help reduce construction’s detrimental impact on the environment, the real-estate market and select industry stakeholders remain unconvinced regarding the monetary returns of investment through building resource efficiency. Life cycle cost (LCC) assessment is an important tool used by professionals globally to assess the economic feasibility of green buildings over their service life. In India, LCC studies have been adopted for private-sector residential buildings. Moreover, municipal bodies have incentivized green buildings for private developers to offset any incremental initial cost. However, LCC calculation is yet to become mainstream within the public procurement system for institutional buildings in India. Considering that building owners and occupants would accrue any operational cost benefits of green buildings, this work aims to address issues regarding cost barriers for mainstreaming the LCC of green and sustainable institutional buildings in India. Indian public-sector organizations such as the Central Public Works Department (CPWD) have had a long-term financial interest in property, own large portfolios, and are committed to delivering a project’s best value to their clients. Accordingly, actual data from CPWD buildings and developing factors were used to create useful scenarios for future decisions based on the LCC of the buildings. Three GRIHA-rated CPWD projects were selected as case studies to investigate their LCCs. Results indicated that despite initial incremental expenditure, all the projects showed significant net savings at the end of 25 years. LCC comparison enables decision making for buildings with equal performances, while in the case of varying performances, LCC techniques relate the total LCC to identifiable units of performance to enable decisions.
Research Article
Life Cycle Costing of Institutional Buildings in India: A Case Study of GRIHA-Certified CPWD Buildings
https://doi.org/10.21203/rs.3.rs-1498374/v1
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life cycle costing
institutional buildings
climate change mitigation
built environment green building cost
In 2017, building construction (including manufacture of materials and products for buildings construction, such as steel, cement, and glass) and operations accounted for nearly one third, i.e., 36% of global final energy use and 39% of energy related carbon dioxide emissions [1]. This is approximately 5% increase in final energy demand since 2010, when building and construction accounted for 32% of total global final energy use and 19% of energy related greenhouse gas emissions [2]. The trend indicates that (i) growth in building sector activity and energy demand surpassed energy efficiency gains due to increase in population and floor space; and more importantly that (ii) technological advances, building envelope measures (e.g., improved windows and insulation), improvements in performance of building energy systems (e.g., heating, cooling and ventilation), behavioral changes and policy initiatives resulted in implementation of cost-effective strategies that helped to offset the effects of population, floor area and energy service activity in buildings.
As per the Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report (AR5), this trend of increasing energy use and related emissions may double or triple [1, 2, 3] by middle of 21st century due to factors such as population growth, increase in building energy use due to increased levels of wealth, migration to cities, and greater access to housing and electricity in developing countries.
The government of India adopted resource efficiency in buildings to optimize the environmental footprint and save costs during operation through implementation of the Green Rating for Integrated Habitat Assessment (GRIHA) framework in 2007. The GRIHA rating framework is an evaluation tool for measuring and rating a building’s environmental performance. It facilitates design and evaluates a project through its life cycle including pre-construction, building planning and construction, and operation and maintenance stages. In addition to reducing the greenhouse gas emissions from buildings, GRIHA optimizes electricity consumption while meeting comfort requirements, reduces dependence on fossil fuel-based electricity and reduces stress on natural resources. Other benefits of GRIHA-rated buildings include direct health benefits like reduced air and water pollution.
Rule 136 (1) of the GFR 2017 issued by the Ministry of Finance [4] require Central Public Works Department (CPWD) to consider LCC of projects while sanctioning detailed design. However, this has not been implemented for a government project thus far [5] and the performance of CPWD projects with respect to various LCC parameters is not clear.
Life cycle cost (LCC) was defined by Rebitzer and Hunkeler [6] as the assessment of costs associated with the life cycle of products that would be covered by any of the project or product stakeholders. LCC can be defined as how feasible an option is, which would help in enhancing the environmental and/or social performance.
Life cycle cost analysis (LCCA) is a method to estimate the total cost of ownership of installations. It takes into consideration all costs for acquisition, ownership and disposal of a product or a system. LCCA is particularly helpful when choosing the most cost-saving alternative from several alternatives that provide almost the same performance but differ in initial and operating costs. Moreover, LCCA can be used as a tool for assessing sustainability in buildings [7]. Several research studies have been conducted to link building sustainability and sustainability rating systems. Hamim et al. [8] conducted an LCC study for rigid and flexible pavements and found that a rigid pavement is more cost-effective than a flexible pavement in terms of overall performance. Flexible pavements’ life cycle costs were found to increase significantly when they were repaired on a regular basis. However, rigid pavements were found not to require expensive periodic maintenance. Kambanou et al. [9] addressed the importance of applying LCC and how understanding the concept could help in better decision making in regards to which cost-effective alternatives could be used. Fuller et al. [10] shed light on how LCC could assist in determining the best alternative that ensures the maximum cost saving in operation, maintenance, and repair costs. The most essential sustainable characteristics in green buildings and their effect on the life cycle costs were examined in a research study by Weerasinghe and Ramachandra [11]. In their study, the Net Present Value (NPV) method was used to compare the monetary amounts paid over the lifetime of a building while taking into account the time value of money (i.e., changes of money value over time as a result of economic and financial factors). The authors concluded that water efficiency and site characteristics play an important role in building sustainability. Shrestha and Pushpala [12] compared the construction costs for green buildings using statistical analysis for existing buildings and it was concluded that although green buildings would have higher construction costs than non-green buildings, they have lower operational costs. Rehm and Ade [13] demonstrated that despite there being evidence that buildings might have a negative impact on the environment, the adoption of green construction principles would have a major impact in reducing these impacts. A comparison was made between the actual construction costs of several certified green and conventional office buildings in New Zealand. The goal was to analyze specific cost plan data to determine the influence of green building on construction costs and it was concluded that green buildings are not significantly expensive compared to conventional non-green buildings. Alsadi et al. [14] studied the effect of adopting Leadership in Energy and Environmental Design (LEED) on the overall cost including savings over the long term. A cost analysis in which the construction costs of the building were calculated both before and after the addition of incorporating LEED in construction was performed. The cost of constructing the two stories was determined to be $571,235, while the cost of incorporating LEED features was approximately 30% of the total building cost. Based on this estimate, it was determined that incorporating LEED features into a typical building would result in a 30% increase in construction costs, with a 15-year payback period (i.e., the owner can return the amounts spent in construction after 15 years). Nangare and Warudkar [15] concluded in a study carried out to assess the use of green building technologies that using these technologies is cost-effective and time-efficient in the long term. Further, the authors showed that using such technologies could be beneficial for both health and the environment. Kansal and Kadambari [16] compared the costs incurred in constructing conventional and sustainable structures and found that the initial cost of a green construction is around 7.5% more than that of a conventional building. For a 20-year return period, the life cycle cost of a green building is 25.6% lower than that of a conventional building. A study was conducted for converting a conventional existing building into a green building while considering energy consumption, water efficiency, material selection and financial factors [17]. Weeransinghe and Ramachandra [18] published a study in which the cost of constructing a green industrial manufacturing building was found to be 37% greater than that of constructing a comparable conventional structure. However, they concluded that savings on the operation, maintenance, and end-of-life costs of green buildings were 33% less than those of conventional structures.
Weerasinghe et al. [19] presented empirical evidence regarding the economic benefits associated with the usage of less energy in environment-friendly buildings from which the economic performance measured in terms of energy usage was investigated. The research concluded that a green building saves 71.1% of energy consumption. Economic analysis showed that green buildings help in maintaining energy consumption levels for an operating building will not exceed more than 5% for 25 years. Li at al. [20] compared and analyzed construction costs of green-certified and conventional residential buildings. The average construction cost in dollars per square meter of green-certified buildings was found to be only 1.58% higher than the cost of conventional residential buildings. Vyas and Jha [21] carried out a study to determine the actual costs of operation and maintenance for green and non-green building types. Ping and Chen [22] compared the life cycle costs of green-certified industrial production facilities to those of conventional buildings to determine how sustainable characteristics affect life cycle costs. Biolek and Hanak [23] explained in their research that estimating life cycle costs of structures would allow investors to find the most cost-effective functional material. Their article demonstrated how decision makers such as investors could use LCC as a tool to make more informed decisions regarding building materials. Carbon emissions resulting from building material manufacturing were investigated in a study, in which it was found that manufacturing greenhouse gas (GHG) emissions account for 80–90% of total emissions [24].
Gluch and Baumann [25] examined the theoretical assumptions of the LCC approach as well as its practical utility in making environmentally responsible investment decisions. Although LCC’s monetary benefits and vast reach may argue in favor of its adoption, it does not account for irreversible actions, commodities that have no owner, and the costs of future generations. Furthermore, LCC does not take into consideration decision makers’ limited ability to make fair decisions in the presence of ambiguity. The simplicity of LCC to a monetary unit, scarcity of reliable data, the difficulty of the development process, and conceptual uncertainties all restrict its practical utility in real-world situations.
Studies on cost of buildings are required to support green building rating tools as well as help in the decision-making process through the entire life cycle. Schmidt and Crawford [26] developed a framework for assessing the life cycle GHG emissions and life cycle cost of buildings. They estimated emissions to account for 10–97% of a building's total GHG emissions throughout its entire life cycle. As a result, building decisions must be considered from the entire life cycle perspective. Building developers, designers, and owners lack the requisite knowledge and tools to correctly analyze life cycle costs and balance them against GHG emission reductions, even though project cost is a major component in decision making. The cost of a building can be calculated using a variety of methods, including LCC. Moreover, LCC and life cycle GHG emission evaluations are routinely used separately.
The present research is focused on green building strategies developed and executed by Central Public Works Department (CPWD), Government of India to achieve GRIHA rating for buildings in the composite climate zone. Although multiple government agencies (such as the National Buildings Construction Corporation and Hospital Services Consultancy Corporation Limited) have embedded sustainability within their operations as project management consultancy (PMC) [27], and/or real estate development, the research has been undertaken under the ambit of a Memorandum of Association between SPA Delhi and CPWD, and hence CPWD projects were studied in detail. As directed by the Bureau of India Standards, equal levels of building performance (in this case, compliance with CPWD Works Manual to achieve GRIHA 4-Star and 5-Star rating), LCC comparison enables decisions to be made. Case studies of three institutional buildings were conducted and the developed LCC framework was applied to their cost analysis. CPWD also follows the LEED and IGBC green building rating systems, which are prevalent in India. However, GRIHA has been endorsed as the national rating system for green buildings in India by the Ministry of New and Renewable Energy and acknowledged by the Master Plan of Delhi [28], i.e., the region where the case studies are located. Therefore, buildings following GRIHA framework were identified. The objective of this research study is to address the prevailing environmental issues related to green buildings from a cost perspective in India by developing an LCC framework, and analyzing the three buildings on various parameters of the LCC framework. To achieve this objective, factors that are included in LCC analysis in general and in CPWD in particular were investigated.
The remainder of this paper is structured as follows. Section 2 describes the materials and methods used in the study. Sections 3 and 4 describe the results of the three case studies and their discussion, respectively. Finally, section 5 concludes the paper.
The research methodology involved a thorough literature review and framing of research questions. Reports published by various research institutes, interviews, and news articles, as well as technical documents, research articles, policies, agreements with contractors, and tender documents were used for data collection. The identified parameters for LCC were then used to assess three buildings as the proposed case study, which are under CPWD in India. CPWD adopted the GRIHA rating system for internal certification of projects as a sustainability rating system. Construction of public projects in India is guided by the CPWD Works Manual [29], which integrates and facilitates implementation of strategies for energy and resource efficiency in each project. The Energy and Resources Institute (TERI) worked with CPWD to facilitate the integration of energy-efficient building measures, which ensured that energy and resource efficiency is an inherent part of the building construction process at CPWD [30].
For this study, parameters identified for LCC of CPWD projects include the additional cost of active and passive design strategies that contribute to climate change mitigation and adaptation. They include Envelope (wall, roof, and fenestration), Heating Ventilation, and Air Conditioning systems (HVAC), Electrical systems (indoor lighting), Building Management System (BMS), GRIHA registration and certification fee, green building consultant fee and post-occupancy audit fee. The cost analysis of outdoor lighting, renewable energy, site works, water saving measures during construction, water works inside the building, rainwater harvesting, and waste management was excluded.
The study aims to restrict the life cycle cost analysis to the cost of specific parameters that have an additional expenditure while also ensuring reduction in carbon emissions. There are also several good practices followed by CPWD that form a part of the GRIHA framework but cannot be included as incremental costs. Cost of measures that do not have a measurable impact on emissions is also outside the scope of this study.
For example, topsoil preservation is a partly mandatory requirement of GRIHA. It is also a good practice followed by CPWD since before GRIHA was adopted. The section on ‘Earthwork’ of Delhi Schedule of Rates (DSR) provides unit cost of excavation and banking of topsoil; however, measuring the impact of preserving topsoil on climate change is outside the purview of this study. Moreover, the cost of topsoil excavation by CPWD cannot be considered an additional cost incurred by the project.
Similarly, replantation of existing tress on site is a GRIHA requirement that entails additional expenditure. It is not included in the CPWD DSR but impacts alleviation of the urban heat island effect, which in turn has an indirect impact on reduction of cooling loads, thereby avoiding carbon emissions. However, the impact and cost of strategies that contribute to reduction of the urban heat island effect is outside the scope of this study.
Even though renewable energy utilization reduces carbon emissions and is included as a measure for climate change mitigation and adaptation, costs of renewable energy systems have not been included in the calculation of project LCC. This is so because the study focuses on active and passive design strategies for optimizing energy consumption while ensuring occupant comfort. Electricity supply using solar energy does not constitute a design strategy. It also does not facilitate optimization of energy use.
As per the Indian Standard on LCC, the term includes all costs and revenues, including initial costs of development, operation, repair, maintenance, energy consumption, rentals, and insurance, and provides an analysis framework that assists in making decisions between different design and specification options with different cash flows over a period.
As per ISO 15686 [31] (International Organization for Standardization, 2020), LCC can address a period of analysis which covers the entire life cycle, taken as 25 years for this study.
The following costs were used to collate the LCC calculation for green (i.e., 4-Star or 5-Star GRIHA rated) and conventional cases (GRIHA 1-Star building as per CPWD DSR 2007) CPWD projects:
Single costs: These are costs that occur only once during the service life of a building:
Initial investment costs include the acquisition costs, planning and design costs, incremental costs of envelope, systems costs for HVAC, lighting and electrical systems, and costs towards obtaining green building certification. Since all projects are government buildings, acquisition costs, and planning and design costs were not considered for this study. All initial investment costs were incurred at the beginning of the study period.
Capital replacement costs include the replacement costs of lighting and HVAC systems. Capital replacement costs are taken as on base date as single costs. The replacement costs of lighting fixtures were calculated in accordance with the fixtures’ specifications and available data. The number of times the fixtures are replaced over the service life of a building depends on the type of the fixture used by each project. Replacement costs of lighting fixtures calculated as per specifications and
available data. The replacement costs have been calculated for 25 years for each
building.
For HVAC systems, the replacement is assumed to occur every 20 years.
Resale value of building is the remaining value at the end of service life (i.e., 25 years). Residual costs such as resale values, salvage value or disposal value is taken as
single cost. For this study, and as per discussions with financial experts, it was assumed that the residual value for the project was 6% of the initial investment cost, which increases at 8% annually.
Uniform annually recurring costs are costs that occur every year during the service life of the building and occur in the same amount (constant amount) every year. These costs include the following:
- Operating cost, maintenance cost, and repair costs were considered at 5% and 10% of system cost for green and conventional CPWD buildings, respectively. These figures were also validated as per the annual O&M agreements of case study buildings between CPWD and service providers.
Nonuniform annually recurring costs are costs that occur every year but tend to increase at a constant escalation rate every year over the service life of the building. They include the following:
- Energy cost of building due to lighting, HVAC equipment and electrical systems. Usually, energy consumed in a building comprises electricity, diesel, liquefied petroleum gas and other costs. However, for the purpose of this study, only electricity consumption was considered because the maximum energy usage by a building is in the form of electricity. Annual energy consumption figures for conventional buildings were calculated based on energy simulation reports. These figures were then multiplied by the unit electricity tariff to obtain the annual energy costs for conventional cases.
There are several tools to measure the financial performance of any investment. Key decision-making parameters that emerge from LCC studies include life cycle cost, payback period, net savings (NS), savings-to-investment ratio (SIR) (adjusted), internal rate of return (IRR) and annual cost (AC) or annual equivalent value (AEV).
Life Cycle Cost: Single net present value (NPV) in monetary terms is useful in the economic evaluation of alternatives for building design and specification. Currently, decisions on the construction of commercial, institutional, and residential buildings are based on initial costs or capital investment values, which might be misleading. Once the present costs of the project have been determined, the values are summed up to assess the total life cycle costs for the green and conventional cases of the building. A low LCC indicates a cost-effective project. Equation 1 presents the different parameters used in LCC calculations.
LCC = PVI + CRC + EC + OMR – RV, (1)
where LCC is the total life cycle cost of building in current value; PVI is the present value of investment costs; CRC is the present value of capital replacement costs; EC denotes the present value of energy costs; OMR represents the present value of non-fuel operating, maintenance, and repair costs; and RV is the present value of resale.
Payback Period is defined as the time taken to cover the investment costs through cumulative savings during operation of the building. The project is considered cost effective if the discounted payback period DPP) is less than the study period.
where t is the payback period taken in the framework equal to 25 years, and all the costs in Equation 2 represent the difference between the costs at years 1 and 25.
Net savings (NS), expressed in terms of the present value (i.e., discounted) of the unit of currency, is the difference between operations-related savings and the additional investment costs. Choosing an alternative with the highest NS is the same as the one with the lowest LCC.
Savings-to-investment Ratio (SIR) is calculated by dividing the future (net) savings by the increased investment costs. It is generally expressed in present value (i.e., discounted). An SIR greater than one indicates that the alternative is cost effective. Multiple projects can be prioritized using SIR by ranking their SIRs in descending order and choosing the projects with the highest SIRs. The costs given in Equation 3 are the costs used for calculating SIR.
where ΔI is called the initial incremental investment and is calculated by subtracting the initial investment in the conventional (non-green) building case from that in the green building case.
Adjusted Internal Rate of Return (AIRR) is the compound rate of interest, which when used to discount the cost and benefits over the period of analysis would make costs equal to benefits when cash flows are reinvested at a specified interest rate. By using AIRR, the discount rate that would generate a zero NPV can be calculated.
Annual Cost (AC) or Annual Equivalent Value (AEV) is a uniform annual amount equivalent to the project net costs, considering the time value of money throughout the period of analysis. The alternative with the lowest AEV would also have the lowest total cost.
Projects may use LCC to estimate the overall costs of project alternatives and select the design that ensures that the facility will provide the lowest overall cost of ownership consistent with its quality and function. In this study, single net present values for life cycle costs were calculated. The payback period and SIR were also calculated.
2.1 Data Collection
The approach adopted for data collection based on parameters identified for the LCC analysis of the selected CPWD project was as follows. A review of primary documents (for construction and operation) including the final agreement between CPWD and contractor, final bill under CPWD agreement and tendered BOQ from CPWD was conducted. Then, a questionnaire for green building consultants was prepared, in which interviews and discussions with concerned CPWD officials were conducted. A conventional base case (as per CPWD Plinth Area Rates and Delhi Schedule of Rates) for the case study was created to be used in the comparison between the green building and conventional alternatives.
Three buildings were used as case studies: Indira Paryavaran Bhawan, Jor Bagh, New Delhi; Lecture Theatre and Lab Complex at IIT Delhi; and Punjab National Bank Corporate Headquarter, Dwarka, New Delhi (hereinafter referred to as IPB, IIT, and PNB, respectively). Case study selection in terms of data availability and collection for this research was covered under the ambit of the Memorandum of Understanding (MoU) signed between SPA Delhi and CPWD on 29th April 2019 (Annexure 1). Since GRIHA was endorsed by CPWD in 2009, it was decided by SPA Delhi and CPWD to identify and study buildings constructed by CPWD in Delhi NCR (composite climate zone) between 2009 and 2019. Selection of case study buildings is based on the following parameters:
• To be minimum 4- or 5-Star GRIHA rated (or provisionally rated) and comply
with relevant and applicable Indian codes and standards in a composite climate
zone.
• Building use to be institutional and project to be operational (day use).
• 40% (or more) of the building to be air conditioned.
• Built-up area to be more than 20,000 m2 (i.e., project eligible for seeking
environmental clearance).
Tables 1 and 2 give the details of these buildings.
|
TABLE 1. Key information about the case studies |
|
Building |
Built-up Area |
Total Project Cost (Rs.) |
Date |
Salient Features |
|
Indira Paryavaran Bhawan |
31,400 m2
|
Rs.199.88 cr (Rs.63,670/m2)
|
2014 |
|
|
Lecture Theatre and Lab Complex at IIT Delhi |
45,761 m2
|
Rs.115 cr (Rs. 25,130/m2)
|
2015 |
|
|
Punjab National Bank Head Office |
76,188 m2
|
Rs.405 cr (Rs. 53,160/m2)
|
2017 |
|
A summary of building envelope specifications of the three case study buildings is provided in Table 2. Further, a summary of the building energy systems in the three case study buildings is provided in Table 3.
TABLE 2. Case study building envelope specifications.
|
Building |
Climate zone |
Building materials (envelope) |
||
|
Wall |
Glazing |
Roof |
||
|
IPB |
Composite |
• 200-mm AAC Block + |
• U-value of external window assembly: 1.5 W/m2K |
• Brick koba treatment + PUF + heat reflective tiles |
|
IIT |
Composite |
• 200-mm AAC Block + |
• U-value of external window assembly: 1.48 W/m2K |
• RCC slab + 75-mm XPS + tiles |
|
PNB |
Composite |
• Thick stone cladding + 230-mm fly ash brick + 115-mm fly ash brick + Plaster |
|
• RCC slab+50-mm fiber glasswool + |
|
TABLE 3. Case study building energy system details. |
|
|
Building energy systems |
||
|
Building |
Lighting |
HVAC |
Electrical system |
|
IPB |
• Daylight integration |
• Room temperature of 26 ± 1°C |
• Total load: 830 kW |
|
IIT |
• Daylight integration |
• Room temperature of 26 ± 1°C |
• Total load: 2195 kW |
|
PNB |
• Daylight integration (51.6%occupied areas daylit) |
• Room temperature of 24 ± 1°C |
• Total load: 1271 kW |
2.2 Statistical Data Analysis
Statistical analysis was performed using SPSS version 21.0 for Windows, (SPSS, Chicago, Illinois). Continuous variables were presented as mean ± standard deviation (SD) and median as interquartile range (IQR). Data were checked for normality before statistical analysis. Non-normally distributed continuous variables, namely Single Investment Cost, Capital Replacement Cost, Energy Cost, Recurring Cost and Cumulative Cost, were compared using the Mann–Whitney U test between IPB, IIT, PNB and the corresponding conventional buildings. For the statistical test, a p-value less than 0.05 was taken to indicate a significant difference.
3.1 Combined analysis for IPB, IIT and PNB
A summary of the statistical analysis of the three case study projects is presented in Table 4 and Fig. 1.
| Table 4. Combined statistical analysis for IPB, IIT and PNB. | ||||||
|---|---|---|---|---|---|---|
| Present values for cost | PNB + IPB + IIT (in crorea rupees) Mean ± SDMedian (IQR) | Conventional (in crore rupees) Mean ± SDMedian (IQR) | p value | |||
| Single Investment Costs (I) Capital Replacement Costs (Repl) Energy costs (E) Annually Recurring costs (OM&R) Residual Costs (Res) Total Costs | 30.1 ± 15.39 | 22.7 (16.2–51.4) | 17.5 ± 7.59 | 14.2 (10.41–28) | < 0.001** 0.007 < 0.001** | |
| 2.1845 ± 3.315 (n = 14) | 1.108 (0.123–2.33) | 0.622 ± 1.277 (n = 36) | 0.275 (0.033–0.598) | |||
| 23.227 ± 25.24 | 11.24 (6.37–30.3) | 48.597 ± 51.046 | 25.545 (13.887–61.772) | |||
| 14.3705 ± 10.6156 | 11.52 (6.87–17.75) | 16.73 ± 11.29 | 14.46 (8.548–21.59) | 0.116 | ||
| 4.92081 ± 3.0615 (n = 3) | 3.712 (2.65–8.4) | 1.1397 ± 0.6 (n = 3) | 0.923 (0.677–1.819) | 0.050 | ||
| 67.9016 ± 48.124 | 46.97 (34.68–98.99) | 83.09 ± 67.46 | 56.21 (38.76–106.65) | 0.124 | ||
| a1 crore = 10 million. | ||||||
Single Investment Cost of IPB + IIT + PNB (i.e., mean value of Rs. 30.1 crores with standard deviation of Rs. 15.39 crores, and median value of Rs. 22.7 crores with interquartile range between Rs. 16.2 crores, and Rs. 51.4 crores) is significantly large (since p-value of 0.001 < 0.05) compared with that of the conventional building (mean value of Rs. 17.5 crores with a standard deviation of Rs. 7.59 crores and median value of Rs. 14.2 crores with interquartile range between Rs. 10.41 crores and Rs. 28 crores).
Capital Replacement Costs of IPB + IIT + PNB (i.e., mean value of Rs. 2.18 crores with standard deviation of Rs. 3.31 crores for replacement of lighting fixtures done 14 times and replacement of air-conditioning systems once over a period of 25 years, and median value of Rs. 1.10 crores with interquartile range between Rs. 0.12 crores and 2.33 crores) are much larger (since p-value 0.007 < 0.05) than those of the conventional building (i.e., mean value of Rs. 0.62 crores with a standard deviation of Rs. 1.27 crores for replacement of lighting fixtures done 36 times and air-conditioning systems once over a period of 25 years, and median value of Rs. 0.27 crores with interquartile range between Rs. 0.03 crores and Rs. 0.59 crores).
Energy costs of the conventional building (i.e., mean value of Rs. 48.59 crores with a standard deviation of Rs. 51.04 crores and median value of Rs. 25.54 crores with interquartile range between Rs. 13.88 crores and Rs. 61.77 crores) are significantly greater (p-value 0.001 < 0.05) than those of IPB + IIT + PNB (i.e., mean value of Rs. 23.22 crores with a standard deviation of Rs. 25.24 crores and median value of Rs.11.24 crores with interquartile range between Rs. 6.37 crores and Rs. 30.3 crores).
There is no significant difference (since p-value 0.11 > 0.05) in Annual Recurring Cost for IPB + IIT + PNB (i.e., mean value of Rs. 14.37 crores with a standard deviation of Rs. 10.61 crores and median value of Rs. 11.52 crores with interquartile range between Rs. 6.87 crores and Rs. 17.75 crores) and conventional building (i.e., mean value of Rs. 16.73 crores with a standard deviation of Rs. 11.29 crores and median value of Rs. 14.46 crores with interquartile range between Rs. 8.54 crores and Rs. 21.59 crores). There is a borderline significant difference (since p-value 0.05 = 0.05) in Residual Cost for IPB + IIT + PNB (i.e., mean value of Rs. 4.92 crores with a standard deviation of Rs. 3.06 crores for three buildings and median value of Rs. 3.71 crores with interquartile range between Rs. 2.65 crores and Rs. 8.4 crores) and conventional building (i.e., mean value of Rs. 1.13 crores with a standard deviation of Rs. 0.6 crores for three buildings and median value of Rs. 0.92 crores with interquartile range between Rs. 0.67 crores and Rs. 1.81 crores).
There is no significant difference (since p-value 0.12 > 0.05) in the Total Cost for IPB + IIT + PNB (i.e., mean value of Rs. 67.90 crores with a standard deviation of Rs. 48.12 crores and median value of Rs. 46.97 crores with interquartile range between Rs. 34.68 crores and Rs. 98.99 crores) and conventional building (i.e., mean value of Rs. 83.09 crores with a standard deviation of Rs. 67.46 crores and median value of Rs. 56.21 crores with interquartile range between Rs. 38.76 crores and Rs. 106.65 crores).
Referring to Fig. 2, the summary of the IPB + IIT + PNB statistical analysis is provided below:
-
• Single investment costs for green buildings are significantly higher than their corresponding conventional cases.
-
• Capital replacement costs for all three green buildings are also much higher than for their conventional cases.
-
• Energy consumption costs for conventional cases is much higher than for green buildings.
-
• There is no significant difference in annual recurring costs for green and conventional buildings.
-
• There is a borderline significant difference in residual costs for green and conventional buildings.
-
• There is no significant difference in the total costs for green buildings and conventional cases.
The summary of the LCC for the three case studies is presented in Table 5. All buildings are economically viable with the payback period ranging between 3.8 to 10.5 years and SIR ranging between 1.8 and 5.5. Even though there is an initial incremental expenditure ranging from 56–90% for incorporating green building features, they result in net savings ranging from 17.5–38% at the end of 25 years.
| Project | Initial investment | Discounted payback period (years) | Life cycle costs incurred over 25 years | SIR (%) | ||||
|---|---|---|---|---|---|---|---|---|
| Rupees | % Increment | Rs./m2 | Rupees | % Savings | Rs./m2 | |||
| IPB (C) | 141,827,193 | 7574 | 59,50,87,967 | 17.49% | 31,779 | 1.852276 | ||
| IPB (G) | 226,983,556 | 60.04% | 12,121 | 10.5 | 49,09,97,402 | 26,220 | ||
| IIT (C) | 104,104,641 | 2873 | 77,11,52,475 | 38.01% | 21,280 | 5.583628 | ||
| IIT (G) | 161,973,677 | 55.59% | 4470 | 3.8 | 47,79,99,378 | 13,190 | ||
| PNB (C) | 270,287,130 | 7136 | 2,53,70,09,278 | 30.36% | 66,986 | 3.943443 | ||
| PNB (G) | 513,837,495 | 90.11% | 13,567 | 5 | 1,76,68,43,090 | 46,651 | ||
It may be inferred that as a demonstration project, IPB was ahead of its time in adopting GRIHA rating. The initial incremental cost for green building features of the project is approximately 60%. The net savings at the end of 25 years, with a payback of 10.5 years, is approximately 17.5% of overall costs, i.e., Rs. 59.5 crores. The SIR of 1.85 (> 1) indicates that the green building is economically feasible. Green building features incorporated in the project design were taken up under a special provision because the CPWD schedules and specifications did not incorporate GRIHA rating requirements in 2007 when the project was initiated. Design and construction of IPB paved the way for several GRIHA-rated green buildings to be constructed by the government and private entities towards meeting India’s nationally determined contributions.
As an academic building, IIT incurred an initial incremental cost of approximately 56%, with a payback period of 3.8 years. The net savings at the end of 25 years is approximately 38% of overall costs, i.e., Rs. 77.12 crores. The SIR of 5.58 (> 1) indicates that the green building project is economically feasible. Principles of design followed by this project, including reduced air-conditioned area, may be adopted by other upcoming academic buildings as well.
PNB incurred an initial incremental cost of approximately 90%; however, it recovered the additional expenditure in a mere 5 years. The net savings at the end of 25 years is approximately 30% of overall costs, i.e., Rs. 253 crores. The SIR of 3.94 (> 1) indicates that the green building project is economically feasible. Principles of design followed by this project may be adopted by other financial institutions and multinational organizations such as Infosys and Google.
Given that sustainability is an important part of CPWD design and construction practices, and that relevant parameters are dovetailed and implemented in the Works Manual for all public projects, the use of LCC for their projects is recommended. Based on the life cycle analysis of selected case studies, which are representative of CPWD buildings at large, it can be inferred that projects following CPWD schedules and specifications fare well on various LCC parameters.
GFR 2017 issued by the Ministry of Finance requires CPWD to consider life cycle cost of projects while sanctioning detailed design. However, as per the study findings, projects following CPWD schedules and specifications including green building guidelines need not calculate LCC. In order to ensure that the LCC of projects is financially feasible, compliance with CPWD schedules and specifications should be ensured.
In cases where the levels of performance vary, the LCC techniques relate the total life cycle cost to identifiable units of performance in a way as to enable decisions. Therefore, based on the learnings from statistical analysis of data, where energy costs during building operation are the most significant, it may be relevant for CPWD to amend the requirements in the ender documents accordingly and include performance parameters for the envelope (including wall, window, and roof) and energy systems, which may be clearly defined while inviting tenders.
Assessment of LCC for envelope and energy systems will enable eligible CPWD projects to (i) demonstrate financial sustainability, (ii) strengthen data collation on LCC for future CPWD projects and for developing payback period baselines for each building typology, and (iii) encourage bidding teams to propose the most environmentally and economically effective options for implementation.
For future work, the following points must be taken into consideration:
• The challenges with LCC are essentially because it is based on estimation and future outcomes and hence may not be theoretically accurate. It may, however, be overcome using actual data from CPWD buildings and developing factors for normalization that would help create useful scenarios for future decisions based on the LCC of buildings. Therefore, data for LCC of more CPWD institutional projects in different climatic zones are required.
• It has been observed that final GRIHA certification linked to post occupancy audit is awaited in all three case study projects, for various reasons. It is to be noted that a change of design parameters during operation through a change in set point temperatures, occupancy or operational schedules will impact the LCC of a given project. Therefore, focus on post-occupancy energy and water audits for ensuring the LCC of CPWD projects may be considered for future work.
• In addition to energy systems, the LCC of strategies for renewable energy, water management, and sustainable building materials may be included for future studies.
Competing Interests
The authors have no relevant financial or non-financial interests to disclose.
Funding
No funding was received for conducting this study.
Acknowledgments
The authors would like to acknowledge the contribution of officials at the National CPWD Academy at Ghaziabad, including Er. Manoj Kumar Sharma, ADG, (T&R) (Retd.); Er. N K Bansal, Chief Engineer (T&R)-I; Er. Awadhesh Kumar CE (T&R)-II; Ar. Nirupama Chadha, Chief Architect; Er. Santosh Kumar, Superintending Engineer (T)-I; and Er. Satyendra Kumar, EE(T)-VI along with others involved in collecting necessary data and information on the case study buildings. Further, the authors would like to thank the green building consultants, facility managers, and CPWD officials deputed at offices identified as case study buildings who helped in understanding the buildings and related costs.
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