Cost model: Offices

<B><font size=”+2”>Sustainablity profile</font></b>
The profile of sustainability has increased considerably over the past few years as government policy, growing public awareness and corporate social responsibility initiatives have encouraged companies and individuals to act on the broader impacts of their activities.
The Brundtland Commission’s 1987 definition of sustainability states that it involves “meeting the needs of present generations without compromising the needs of future generations to meet their own needs”.
In more practical terms, the concept of the triple bottom line divides sustainability issues into three strands of activity:

• Economic sustainability – ensuring long-term prosperity through the effective use of resources.
• Environmental sustainability – preventing harmful or irreversible effects to the environment.
• Social sustainability – treating all people fairly, providing equal opportunity and responding to the needs of stakeholders.
• In the UK it is environmental issues, in particular greenhouse gas emissions, that dominate the public debate. As construction and property are major consumers of energy, raw materials and land, the environmental agenda is increasingly affecting construction.

The table below reveals the impact of the UK property and construction sector on the environment in terms of its consumption of resources. This illustrates its potential sensitivity to changes in the availability or regulation of these resources.
However, there are several government measures in place to encourage the adoption of sustainable practice, including including revisions to Part L of the Building Regulations, the climate change levy, landfill and aggregate taxation, and enhanced capital allowances.
Alongside these policies, corporate social responsibility (CSR)` – which is concerned with the long-term durability of businesses based on good business management – is gaining a higher profile. As buildings can provide a very direct symbol of the values of an organisation, there is potentially a close link between CSR and sustainable construction.

<B><font size=”+2”>Establishing the business case for sustainability</font></b>
The formulation of a business cases for investment into sustainability is complex area, covering a broad range of economic and non-economic drivers, including:

• Increased efficiency in the use of resources and reduced environmental impacts through lower emissions, waste and water management and so on.
• Operational cost reductions over a building’s lifetime, primarily related to energy consumption and replacement of mechanical plant.
• Increased productivity from buildings that are more responsive to the needs of the workforce.
• Access to emerging niche property markets that value sustainability objectives.
• Management of PR, risk and liability related to environmental issues.
• Potential for long-term growth in shareholder value or utility in response to changing economic and regulatory conditions.
• Management of corporate social responsibility issues, potentially generating benefits including access to capital and greater stakeholder loyalty.

To date, construction and property have had limited success in embedding sustainability into general practice. Many of the claims made about the economic benefits of sustainability are often marginal, difficult to quantify or derived by end users rather than providers. Furthermore, the incentives to invest in sustainability are not sufficiently compelling to encourage their widespread adoption and regulatory requirements do not ensure that developments meet best practice standards.
However, for enlightened and well-advised clients, sustainability issues can be addressed on a project specific basis without incurring significant cost or performance penalties.
And as costs of technologies and energy change, and regulatory requirements develop, it is possible to forsee the balance of incentives will shift in favour of sustainability.
<B><font size=”+2”>Developing a sustainability plan</font></b>
A sustainability plan is needed to achieve the optimum balance between client priorities, resources and constraints – and to ensure that the objectives are achieved.
The key elements of such a plan are a sustainability champion with a clear vision, the development of a balanced solution, and the use of targets and benchmarks to monitor progress.
<B>Sustainability champion</b>
The appointment of a champion is essential, as the client must drive the sustainability vision, identifying the degree of sustainability and innovation it is comfortable with. Objectives should be based on a whole-life assessment of a range of economic and non-economic criteria. The development of these objectives is an iterative process and should be supported by the project team.
<B>A balanced solution</b>
A balanced programme is important to ensure that a wide range of environmental, economic and social issues are considered and that funds are invested in areas that generate the greatest life-time benefits. For example, a green office building that relies heavily upon car-based commuting will not provide a sustainable solution without significant investment in transport management.
<B>Use of targets</b>
Targets and benchmarks help to communicate goals, secure buy-in and provide the basis for ongoing management. Not all aspects of project sustainability are easy to quantify and benchmarks for tangible elements of environmental sustainability, such as operational energy use or water consumption, are important to complement some of the more ambiguous elements of a programme.
<B>Tools for sustainability plans</b>
Substantial investment in research and development means there is a wide range of information and tools available to support the development of sustainability plans, including:
<B>Management frameworks, promotional tools and process guides</b> These tools are aimed at increasing awareness and understanding of sustainability and providing support for business cases. Recent examples include Construction Industry Council’s Constructing for Sustainability and the SIGMA guidelines, which provide a broad programme framework. CIRIA’s Sustainable Construction Procurement is a guide to the delivery of projects with an explicit environmental agenda.
<B>Project assessment and decision-support tools</b> In addition to the widely used BREEAM environmental assessment models, tools that support design decision-making and option appraisals include:

• Arup’s SPeAR tool, aimed at assessing the balance of sustainability performance across various indicators. SPeAR can be used to assess projects, project portfolios or a client’s overall range of activities.
• ENVEST, the BRE assessment method that aggregates the overall environmental impact of a building into a single unit of measurement, the ecopoint. ENVEST can be used to compare alternative designs or specifications.
• Sustainability accounting and reporting, a methodology developed by CIRIA to identify, evaluate and manage social and environmental risks.

<B>Performance measurement and benchmarking tools</b> The DTI’s key performance indicator programme has been expanded to include environmental indicators. Other examples include:

• CALIBRE, the productivity tool that includes SMART waste, which is aimed at reducing waste in the construction process using real-time, on-site measurement.
• The Movement for Innovation’s sustainability indicator, which is designed principally for use by project managers to assess performance across the project cycle.

<B><font size=”+2”>Design and construction of sustainable buildings</font></b> Construction sustainability is concerned with the full range of economic, environmental and social issues. Although most of the economic and social impacts are determined by the decision to build, detailed issues that can be addressed on a project include the provision of appropriate working conditions for constructors and end users, and design for productivity and longevity. Most sustainability drivers do however relate to environmental issues, which are examined in greater detail below.
<B>New build vs refurbishment</b>
Because of the environmental impact of construction and additional waste associated with demolition, it is worthwhile considering whether a new-build solution is necessary.
The assessment will need to be made on a whole-life basis considering cost, energy and emissions, productivity and development value.
<B>Transport management</b>
Transport between buildings accounts for some 18% of UK greenhouse gas emissions.
The cost-effective design of low-energy buildings in well-connected town-centre locations can be very challenging. However out-of-town locations best suited to low-density green buildings can be affected by poor accessibility. Sustainable transport planning should address bus and shuttle bus services, facilities for cyclists and measures to reduce car usage.
<B>Low energy in use</b>
Fifty per cent of UK greenhouse gas emissions are related to energy required to heat, light or cool buildings. Low energy costs are a disincentive to invest in these features but there are several benefits to building owners that do so, including lower maintenance costs, simplified building operation and long-term competitiveness. The key design elements that contribute to low-energy consumption are: Building orientation Minimising effects of solar heat gain and glare.
Design for natural ventilation This places limits on the depth of the floor plate therefore has a significant effect on the building plan and plot utilisation. The main characteristics of naturally ventilated buildings are:

• Narrow floor plates, typically ranging from 15 m to 18 m, window to window
• A high wall-to-floor ratio
• A high proportion of opening vents
• Avoidance of subdivision of internal spaces.

Natural ventilation only provides acceptable performance in certain circumstances. Where it is not feasible displacement systems that use a high proportion of fresh air and heat recovery are the optimum low-energy alternative.
Mixed-mode systems and heat recovery In commercial markets, the constraints on internal layout imposed by naturally ventilated solutions are often unacceptable to occupiers or investors. Mixed-mode systems offer alternative solutions that should result in long-term lower energy usage and emissions while providing a more flexible building. At their most basic, mixed-mode solutions involve providing the infrastructure to enable the retrofitting of mechanical systems: more sophisticated systems combine natural and mechanical elements such as fan-assisted stack ventilation, used in buildings with a deep floor plan and open atrium. Mechanical ventilation systems can also have heat reclaim technologies to offset fan energy.
<B>Thermal stability</b>
The flywheel effect, provided by a building’s thermal mass, can be used to regulate temperature and reduce the need for mechanical cooling. Solutions based on night-time cooling have the following design requirements:

• Automatic opening vents
• Exposed concrete surfaces to a depth of more than 100 mm
• Avoidance of continuous downstands to prevent the formation of warm air pockets
• Maximisation of the surface area of the thermal sink by, for example, use of vaulted ceiling profiles
• Acoustic treatments to the exposed soffit.

<B>Use of renewable energy sources</b>
Currently available sources of renewable energy include solar collectors for water heating, photovoltaics, and use of ground water as a source of heating or cooling. Currently the payback on all of these technologies is long and the take-up is low. In office buildings, the most suitable, albeit subeconomic, application is solar water heating for WCs.
<B>Maximising daylight</b>
High levels of daylight are widely believed to contribute to higher worker productivity. If solar gain is properly controlled, energy consumption for cooling and lighting can also be reduced. Lights are most likely to be remain switched off if there is an even distribution of light in the interior – achieved by the use of high ceilings, perimeter light shelves and the control of solar glare.
Minimisation of internal heat gains Internal heat gains can be managed by:

• Controlling solar heat gain using external shading
• Minimising the use of artificial light
• Control of equipment heat gains through the use of technologies such as flat screens
• Location of heat generating space in areas where the heat can be directly removed.

<B>Thermal insulation</b>
Insulation standards in excess of Part L requirements will reduce heating and cooling loads. It is valuable to combine high thermal mass with high insulation to control requirements for cooling.
<B>Airtightness</b>
Typically 50% of ventilation heat loss in a well-insulated building is caused by infiltration through the building fabric. High standards of air tightness therefore contribute to reduced heating and cooling loads – particularly if a heat recovery system has been adopted.
Low-embodied energy and emissions Embodied energy and emissions are associated with the manufacture, transport and assembly of a building. Construction activities account for 10% of UK CO₂ emissions and 10% of the energy consumed over the life of a conventional building. Specific steps that can be taken to reduce embodied energy include:

• Design for longevity – loose fit buildings
• Material selection – minimising over-specification, reducing the physical mass of material used, controlling the use of sensitive materials such as aluminium, cement and plastics, and selecting materials with relatively low-embodied energy, based on guides such as the Green Guide to Specification
• Reuse of materials and on-site disposal
• Use of local materials and labour
• Management of recycling, including the specification of recycled materials, the design of components for future reuse and the design of the building for adaptation.

<B>Waste management and recycling</b>
British construction generates 72 million tonnes of waste a year, more than 10 million of which are discarded, unused materials. The main ways of managing and minimising waste are:

• Site management – avoidance of mistakes and the mis-ordering of materials
• Protection of completed work and on-site materials
• Management of the recycling of construction waste
• Use of prefabricated or modular components to minimise variations, errors, rework and waste.

<B>Water consumption and management</b>
Sustainable buildings should optimise their water consumption as well as mitigate the impact of the building on local ground water. Strategies to control consumption of mains water include:

• Specification of low consumption fittings, including spray taps, low-flush appliances and automatic controls
• Rainwater harvesting – providing water for WCs and irrigation
• Grey water recycling – reuse of water. Both rainwater harvesting and grey water recycling require significant investment, with limited opportunities for payback.

The main tools of sustainable urban drainage are porous paving materials, which, in conjunction with soakaways, can help to reduce the amount of storm water run-off directed into storm drains.
<B>Environmental management</b>
Sustainablility can also be enhanced through careful environmental management, including:

• Management of bio-diversity
• Pollution control
• Reduction of the use of toxic materials (such as PVCu, paints and solvents which are based on volatile organic compounds)
• Provision for ongoing recycling.

<B>Procurement of sustainable buildings </b>
The performance of the contractor and supply chain will have a significant influence upon the achievement of many sustainability objectives. As a result the criteria for the appointment of the project team will need to consider sustainability issues, particularly at the prequalification stage, including:

• The track record of delivering sustainable buildings, including material procurement, waste management and working conditions
• Availability of supply chain and subcontractors with experience of working under environmental management regimes
• Use of formal environmental and waste management systems such as ISO 14001
• Health, safety and welfare performance.

Early appointment of contractors enables plans for sustainable construction to be put in place and maximum advantage to be taken of opportunities for off-site manufacture.
More time may be also needed for procurement if policies for sourcing of local materials are adopted.
One area of project delivery that requires particular attention on sustainable projects is handover and commissioning. It must be ensured that appropriate time and resources must be available to ensure successful operation by the end user.
<B><font size=”+2”>Incentives to investing in sustainability </font></b>
One of the ways in which the government encourages business to invest in energy efficiency is the enhanced capital allowances scheme. The scheme allows businesses investing in designated energy saving products to claim 100% first year capital allowances. Full details of the scheme can be found at www.eca.gov.uk.
Products qualify by being included on an official list or meeting efficiency criteria. Updated Energy Technology Criteria and Energy Technology Product lists were published on 14 July.
The complete list of qualifying technologies is detailed on the website and ranges from boilers, heat pumps and refrigeration through to combined heat and power and solar thermal installations. However, in order to qualify for capital allowances the asset must still pass the usual tests as to whether or not is “plant and machinery” for tax purposes. In practice this means, for example, that the majority of lighting installations would not qualify even if they meet the energy saving criteria.
As a further incentive to investment, from 1 April this year the Finance Act 2003 has introduced first year allowances for capital “expenditure on environmentally beneficial plant or machinery”. Qualifying assets will have to meet criteria to be specified by Treasury Order. At the time of writing, no order has yet been published but it is anticipated that it will include assets meeting strict water saving and efficiency criteria and will be incorporated into a Water Technology List to be published on the ECA website.

<B><font size=”+2”>Cost breakdown </font></b>
This cost model illustrates the cost effect of changes in design and specification required to achieve a good practice sustainable solution for an out-of-town office building. It demonstrates that significant elements of best-practice, low-energy and low-embodied-energy design can be adopted with a cost premium of about 10%. The model also details the additional costs associated with achieving higher levels of sustainability performance.
The model is based on a typical benchmark business park office costing £1255/m², a figure that is commonly used in early stage development appraisals. The base scheme is a six-storey building with a gross floor area of 7100m², planned with a single core and external stairs, incorporating displacement ventilation, category A fit-out and external works to the building plot.
Adjustments to the base building to meet sustainable design criteria involve changing the design to a two-storey building with a floor plan based on a 15 m window to window/lightwell dimension. These are broken down overleaf, with reasons for following this method or using these materials explained in bold type.
Rates are at third-quarter 2003 price levels, based on a lump sum contract and a location in south-east England. Demolition and site preparation, the tenant’s fit-out, professional fees and VAT are excluded.
Rates in the model may need to be adjusted to account for specification, site conditions, procurement route and programme.
Care should be taken in applying general location factors on projects where local procurement of labour and materials is proposed.