life cycle costing a tool for energy efficient procurement
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The DEEP Toolkit. TOOL 2.c . Life Cycle Costing Guide for Senior LA Staff. LIFE CYCLE COSTING A Tool for Energy Efficient Procurement. The DEEP Toolkit. TOOL 2.c . Life Cycle Costing Guide for Senior LA Staff. Overview. What is Life Cycle Costing? Why should my Local Authority use it? - PowerPoint PPT PresentationTRANSCRIPT
DEEP – Dissemination of Energy Efficiency Measures in the Public Building Sector (EC DG TREN, 2005-2007)
LIFE CYCLE COSTING
A Tool for Energy Efficient Procurement
The DEEP Toolkit. TOOL 2.c. Life Cycle Costing Guide for Senior LA Staff
DEEP – Dissemination of Energy Efficiency Measures in the Public Building Sector (EC DG TREN, 2005-2007)
Overview
• What is Life Cycle Costing?• Why should my Local Authority use it?• How can my Local Authority use it?• What are its limitations?• Where can I find out more?
The DEEP Toolkit. TOOL 2.c. Life Cycle Costing Guide for Senior LA Staff
DEEP – Dissemination of Energy Efficiency Measures in the Public Building Sector (EC DG TREN, 2005-2007)
What is Life Cycle Costing?
Life Cycle Costing (LCC) is a methodology that enables
you to incorporate costs and benefits that occur over
the lifetime of a product into your procurement
decisions – rather than considering the initial capital
cost of a product only.
Costs and benefits – e.g. energy consumption,
replacement of equipment or parts, consumables and
disposal – they all affect the ultimate price, yet are rarely
considered when selecting a product!
The DEEP Toolkit. TOOL 2.c. Life Cycle Costing Guide for Senior LA Staff
DEEP – Dissemination of Energy Efficiency Measures in the Public Building Sector (EC DG TREN, 2005-2007)
Why should my Local Authority use it?There are many benefits for Local Authorities in using Life Cycle Costing on a systematic basis:
• It can save you money • It can reduce the time and effort involved in frequently replacing
equipment• It supports the purchase of better quality equipment• It encourages more logical decision-making• It supports local sustainable development
In summary, life cycle costing supports your responsibility to the community to use public funds wisely and sustainably
The DEEP Toolkit. TOOL 2.c. Life Cycle Costing Guide for Senior LA Staff
DEEP – Dissemination of Energy Efficiency Measures in the Public Building Sector (EC DG TREN, 2005-2007)
Example 1: energy efficient lighting
Standard
60W
£0.50 X10 = £5
Energy efficient:
12 W
£1 x 10 = £ 10
Energy efficient:
20 W
£5 x 10 = £50
The DEEP Toolkit. TOOL 2.c. Life Cycle Costing Guide for Senior LA Staff
DEEP – Dissemination of Energy Efficiency Measures in the Public Building Sector (EC DG TREN, 2005-2007)
Results – NPV, Energy & CO2
The DEEP Toolkit. TOOL 2.c. Life Cycle Costing Guide for Senior LA Staff
DEEP – Dissemination of Energy Efficiency Measures in the Public Building Sector (EC DG TREN, 2005-2007)
COMPARISON OF OPTIONS
-2500
-2000
-1500
-1000
-500
0
0 5 10 15 20 25
years
Cu
mu
lati
ve N
PV
60W standard
12W energy efficient
20W energy efficient
The DEEP Toolkit. TOOL 2.c. Life Cycle Costing Guide for Senior LA Staff
DEEP – Dissemination of Energy Efficiency Measures in the Public Building Sector (EC DG TREN, 2005-2007)
How can my Local Authority use Life Cycle Costing?
• Identify types of procurement for which LCC is appropriate (e.g. buildings, energy and water using equipment).
• Identify staff responsible for procurement of equipment where LCC can be applied.
• Incorporate a requirement for LCC into your procurement policy – so that it becomes a systematic part of the procurement process.
• Provide training in use and benefits of Life Cycle Costing.
• Gain experience in using LCC, and adapt it for your needs.
The DEEP Toolkit. TOOL 2.c. Life Cycle Costing Guide for Senior LA Staff
LimitationsLCCA only takes account of the costs and benefits that accrue during
Your ownership of the equipment, unlike Whole Life Costing / Life Cycle
Impact Assessment in which the social and economic benefits
related to its entire life-time are considered, e.g.
•
•Source: http://www.dk-teknik.dk/ydelser/miljo/LCA%20guide/3rd_ed/faq5.htm
Typical coverage of life-cycle cost analysis
The DEEP Toolkit. TOOL 2.c. Life Cycle Costing Guide for Senior LA Staff
DEEP – Dissemination of Energy Efficiency Measures in the Public Building Sector (EC DG TREN, 2005-2007)
How can I find out more?
Contains:
• Life Cycle Cost Analysis Tool
• Training materials for Procurement Staff
• Information on Procura+ Campaign – you can join!
Plus• Other tools to support
energy efficient public procurement
DEEP http://www.iclei-europe.org/deep
The DEEP Toolkit. TOOL 2.c. Life Cycle Costing Guide for Senior LA Staff
The sole responsibility for the content of this publication lies with the authors. It does not necessarily reflect the opinion of the European Communities. The European Commission is not responsible for any use that may be made of the information contained therein