Lee, H W (2012) Application of target value design to energy efficiency investments. PhD thesis, University of California, Berkeley, USA.
Abstract
Inherent to energy efficiency (EE) investments are various uncertainties. These can be managed and reduced by an application of Life Cycle Cost Analysis (LCCA) and simulation model. However, current practices in project development and the underwriting process of EE investments in the commercial building sector appear to lack uniform processes to accommodate an effective use of LCCA. Accordingly they do not address to the extent they could energy-related uncertainties, and this deficiency appears to result in financial barriers that hinder project realization. Target Value Design (TVD) is a management practice that make possible for customers’ needs to dictate the development of project designs, and designs are steered to deliver intended customer values within project and financial constraints. TVD has proven effective in managing project cost uncertainty by providing a structured process. It helps achieve a high level of integration and collaboration among project stakeholders. In order to expand the application of TVD to include life cycle performance of buildings, the objective of this dissertation is to investigate a standard process and protocol for applying TVD to EE investments to manage three types of energy-related uncertainties: those related to (1) project cost, (2) operational practice, and (3) system performance. This dissertation involves interviews to develop a theoretical understanding of EE investments and to argue for the use of TVD during preconstruction phases. To effectively implement TVD, the following processes are suggested: (1) the TVD protocol that the lender and borrower can follow to achieve effective underwriting in energy retrofit investments, and (2) a standard TVD decision-making process (TVD-DMP) for the delivery of new energy efficient commercial buildings. This dissertation explores the development of a simulation model, Energy Retrofit Loan Analysis Model (ERLAM) to support Step 4 of the TVD protocol. ERLAM is tested with a case study of an energy retrofit loan in Northern California. The goals of ERLAM are (1) to determine the impacts of the energy-related uncertainties on the financial performance of the loan, and (2) to support the overall TVD process by determining the target building performance and allowable cost. This dissertation delivers a proof of concept for TVD in EE investments through a case study. The case study analyzes a San Francisco hospital project where the project team had challenges with a heat recovery system. To overcome the challenges, the team implemented TVD, which resulted in reducing energy-related uncertainties, system complexity, and overdesign. Research findings illustrate that, when applied to EE investments, TVD can reduce energy-related uncertainties, enhance the predictability of achieving financial goals, and consequently lower financial barriers. Future case studies and surveys can help further validate the effects of TVD on EE investments. Future research is also needed to refine steps of the TVD protocol and TVD-DMP and to enhance the applicability of ERLAM on more and different types of projects.
| Item Type: | Thesis (Doctoral) |
|---|---|
| Thesis advisor: | Tommelein, I D and Ballard, G |
| Uncontrolled Keywords: | complexity; efficiency; project team; uncertainty; hospital; building performance; collaboration; commercial building; construction phase; cost analysis; integration; investment; life cycle; project cost; retrofit; project stakeholder; stakeholders; energy efficiency; life cycle cost; case studies; case study; interview; simulation |
| Index terms: | energy efficiency, management practice, energy retrofit investment, life cycle cost analysis, project stakeholder, life cycle cost, cost analysis, heat recovery system, target value design, life cycle, decision-making process, case study, project design, dissertation, integration, commercial building, interview, project development, building performance, financial performance, efficiency, collaboration, construction phase, survey, complexity, project team, project cost |
| Subjects: | decision analysis, project delivery, organizational analysis, economics, data collection methods, contractual arrangements, sustainability and energy, renovation and retrofit, construction type, energy systems, financial and cost management, quality assurance, sociology, business analysis, research dissemination and communication, management, research methods, performance management, systems engineering, value management |
| Topics: | Stakeholder Management, Research Practice, Construction Technology, Sustainability, Project Management, Cost Management, Risk Management, Engineering Principles, Quality Management, Business Strategy, Procurement, Organizational Design |
| Descriptive scope: | 4 PCEA |
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