Analysis for Individual Buildings

The same analysis, presented for large-scale energy efficiency programs specific to an entire building stock, can apply to individual buildings. Indeed, an EP, EPh, can be defined for an individual building or even an energy system within a building (such as lighting, air-conditioning, or appliances) using an expression similar to that of Eq. (14.3):


  • VAh is the average annual value provided by the building, including any combination of any VA such as asset value (housing), rental value (office building), and sale value (retail).
  • EUh is the annual energy used by the building or building energy system.

A decomposition of Eq. (14.7) allows the estimation of the individual building EP as a function of its EUI value, EUIh:

As noted earlier, the term 1/EUI,, (expressing the floor area served by a unit of energy) is considered as a measure of energy affordability, EAh:

As noted in Figure 14.5 for a villa located in Riyadh and Abha, various EEMs, including installing wall and/or roof insulation, low-e glazing, LED lighting, and a high-efficiency air-conditioning system, have diverse effects on energy affordability, EAh, expressed in terms of the potential building floor area served by per 10,000 kWh/year to maintain acceptable indoor environment quality. The data shown in Figure 14.5 are based on results of the analysis carried out by Alaidroos and Krarti (2015). As expected, measures that increase energy efficiency also enhance energy affordability—and thus EP.

The EP metric, proposed for an individual building or for a building subsystem, incorporates two indicators as illustrated in Figure 14.6: the energy efficiency and the value-added productivity. In addition, quantifiable and measurable indicators for NEBs can contribute to the VA, such as rental rates (residential, commercial) or sale levels (retail). It should be noted that the impact of any EEM on an individual building EP can be determined using the same analysis outlined in Section 14.3.3.

Household energy affordability expressed in floor area covered by 10.000 kWh/year electricity consumption in Riyadh and Abha, KSA

FIGURE 14.5 Household energy affordability expressed in floor area covered by 10.000 kWh/year electricity consumption in Riyadh and Abha, KSA.

Basic concept of individual building EP

FIGURE 14.6 Basic concept of individual building EP.

Impact of Energy Efficiency Measures

The change in EP, AEPB, associated with any EEM targeting a building stock or an individual building can be estimated as noted in Eq. (14.10):


  • EPBr and EPBe are EP values for, respectively, retrofitted and existing buildings.
  • VABr and VABc, are the value-added values for, respectively, retrofitted and existing buildings.
  • TFCB r and TFCB(, are the TFC values for, respectively, retrofitted and existing buildings.

Any EEM may change both the VA and the TFC, depending on the quantifiable resulting benefits, AVAEE, and energy savings, ДTFCEE. As noted earlier, the benefits can encompass both benefits from reduced energy demands (including the avoided costs for energy generation and distribution as well as reduced carbon and other greenhouse gas emissions) and a wide range of NEBs (such as increased worker productivity due to improved indoor air quality and thermal comfort).

The new VA. AVAEE, can be determined by estimating the monetary value of the benefits arising from the EEM:

The retrofitted TFC can be determined from the energy use savings, ATFCEE:

Thus, the change in EP can then be expressed as:

The percent increase in EP in the building sector can then be determined simply as a function of percent changes in both value-added and energy consumption:

Based on the expression of Eq. (14.14), two basic principles can be formulated to assess the impact of any EEM on the building sector EP:

  • 1. Any EEM that saves energy consumption and increases the value-added boosts EP. In other terms, any cost-effective EEM increases EP.
  • 2. Any EEM that reduces the VA, even if it reduces energy consumption, may lower EP. Such is the case of an EEM that is not cost-effective.

The threshold of value-added reduction, after which EP starts to decrease, due to any EEM is estimated using Eq. (14.15):

Estimation of Value Added from Energy Efficiency

The change in VA resulting from any EEM, whether applied to the entire building sector or an individual building energy system, can be estimated using net present value (NPV) analysis to account for implementation costs, 1C, initial monetary benefits, B0, and annual cash flows from the action as discussed in Chapter 3:


CFn is the annual cash flow, which typically includes potential energy cost savings, AECn, operation and maintenance costs, OM„, NEBs (such as emissions reduction, enhanced work productivity, and increased sales), B„, and other costs (such as replacement and resale costs), On:

SPPW is the single present payment worth factor, which depends on the annual average discount rate, rd, and the lifetime, N, expressed by the number of year for the EEM as shown in Chapter 3:

It should be noted that the discount rate, rd, encompasses various economic rates, including nominal interest rate, inflation rate, energy escalation rate, and if applicable tax rate, as discussed in Chapter 3. The annual change in VA can be estimated using the annualized costs (AC) of the energy project (i.e.. EEM) obtained from the present worth value, NPW, and the uniform series present worth factor, USPW:

The USPW depends on the life-cycle period N and discount rate, rd, of an economy as outlined in Chapter 3:

The lifetime-avoided energy (i.e., electricity or fuel) consumption, U,ol, from an EEM that results in uniform annual savings. A, can be expressed using Eq. (14.21):

When, by contrast, a large-scale energy efficiency program is implemented incrementally, the annual cash flows are not uniform but follow a gradient after the initial phase of M years. Such a series is illustrated in Figure 14.7. In this case, the

gradient series present worth (GSPW) is used to convert the annual cash flows to the present:

Additionally, the lifetime avoided energy consumption follows a gradient, Glo which can be computed from the final annual energy savings, A, as follows:

It should be noted that both NPV and AC can be used to assess the cost-effectiveness of the EEM. In the following section, various applications of the EP analysis are outlined to evaluate the benefits of energy efficiency actions for both individual buildings and entire building stock in the GCC region.

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