Sustainability costs

Introduction

One of the principal barriers to the wider adoption of more sustainable design and construction solutions is the perception that these incur additional unwanted costs. Evidence collected by Cyril Sweett and BRE contradicts this assumption. The study Putting a price on sustainablity identifies “quick wins” where major improvements can be made at low cost, and quantifies the costs associated with a range of sustainable solutions for four building types, using BREEAM as a simple measure of performance. The study shows significant improvements in performance can be achieved at very little additional cost. Here we look at one case study in detail and outline the other three.

Sustainable building at what cost – and for what benefit?

Beyond what is required by the Building Regulations, there is a lag in the widespread application of sustainable solutions that could improve a building’s performance. There are many reasons for this – not least the perception that there is a lack of client or customer demand, and also that sustainable alternatives are prohibitively expensive. Typically cost consultants can add a significant margin of as much as 10% to capital costs to allow for sustainable solutions.

The Cyril Sweett and BRE study is one of the first to examine this assumption in detail, providing real cost data for a range of sustainability technologies and design solutions. The results show major performance improvements can be achieved cheaply and even at no cost. Reaching the highest standards does incur costs, but careful consideration of designs and specification at an early design stage can present significant savings compared with an ad-hoc approach.

Reasons to be sustainable

The most powerful and direct driver for addressing sustainability is that the client, funder, landowner or planning authority has made it a key project requirement.

For example:

• The Housing Corporation requires an EcoHomes “Good” rating for any scheme they fund.
• English Partnerships requires partner developers to achieve a minimum BREEAM or EcoHomes “Very Good” rating.
• Public sector contractors must achieve BREEAM “Excellent” for all new buildings and their proposals are often critically evaluated according to the extent to which they address wider sustainability issues.
• Many high-profile private developers and landowners are seeking the same or higher standards of sustainability performance from their partners.
• Investors are becoming increasingly interested in sustainability and are encouraging property industry partners to understand and demonstrate how they contribute to the wider sustainability agenda.

Benefits of a proactive approach

There is significant competitive advantage to be gained from actively addressing the sustainability agenda. Active consideration for sustainability issues such as BREEAM compliance during the project development process ensures:

• Accurate and competitive pricing of bids
• Better risk management – for example, improved success in achieving planning or other regulatory consents
• More effective programme management.

Other benefits include reductions in running costs, improvements in living and working environments, and market differentiation.

Assessing the costs of sustainable buildings

The costs of achieving enhanced and exemplar environmental performance were investigated for four types of building (a house, a naturally ventilated office, an air-conditioned office and a healthcare centre). These buildings were chosen to represent Building Regulations-compliant, typical industry projects in the UK. BRE’s suite of BREEAM tools was used to determine benchmarks of environmental performance.

The capital costs of each design, management or specification BREEAM option was assessed and compared with the building base cases. The capital costs quotes include prelims, overheads, profits and contingencies. The costs are for items implemented at design stage, and not retrofitted. The most cost-effective options were favoured. The study focuses on new-build projects – however, many of the costs are also applicable to building refurbishments.

Three case studies were measured using standard versions of BREEAM (see below). The healthcare centre was assessed using bespoke BREEAM. Using BREEAM credits as a measure of environmental enhancement, the additional costs associated with each incremental improvement in environmental performance were assessed. Environmental “quick wins” and initiatives that need to be built into a project at design concept stage were identified.

In the BREEAM schemes, several credits are available for aspects of the site and its location. These include proximity to local amenities and public transport, existing ecological value and whether the site has previously been built upon. In this study, three location scenarios where assessed:

• Poor location (where no location credits are achievable)
• Typical location (where a selection of credits are achievable; a brownfield site with limited access to local amenities and public transport, in an edge-of-town location)
• Good location (where all location credits achievable)

The results of each scenario are presented in summary graphs (one of which “Cost verses environmental performance for a naturally ventilated office” is shown on page 86) and demonstrate the importance of location to the costs of achieving a high environmental rating.

Some site credits were not assessed, as costs were deemed to be too location dependent. These include the cost of improving site ecological value, planning for long-term impacts on biodiversity and the use of recycled aggregate. As these credits could not be assessed, innovative technologies including rainwater harvesting and photovoltaic panels were incorporated. These technologies may not represent the most cost-effective means of achieving a BREEAM “Excellent”. Depending on the location, credits could provide a more cost-effective way to enhance the BREEAM rating than some of the more innovative measures identified and costed in this study.

What is BREEAM?

BREEAM measures the environmental performance of buildings by awarding credits for achieving a range of environmental standards and levels of performance. Each credit is weighted according to its importance and the resulting points are added up to give a total BREEAM score and rating.

In this study, BREEAM Offices 2004, EcoHomes 2003 and Bespoke BREEAM 2004 were used. These were the most recent versions of BREEAM at the outset of the research.

Results for a naturally ventilated office

The diagram shows the increase in capital costs involved in building a naturally ventilated office in order to achieve a “Good, “Very Good” and “Excellent” BREEAM rating, in three locations. Building environmental performance was assessed using BREEAM Offices 2004.

For the case study building, a BREEAM “Good” rating could have been achieved at no additional cost even in a poor location (such as on a greenfield site some distance from amenities and transport links). In a good location (a brownfield site well located for transport and amenities), it was possible to achieve an “Excellent” rating for as little as a 2.5% increase in capital cost.

With the sustainability measures considered in this study, it was not possible to gain an “Excellent” rating for building in a poor location, although this could be achieved through considering the selection of credits excluded from this study (see “Assessing the costs of sustainable buildings”).

Summary information on uplift costs for a domestic dwelling, an air-conditioned office and a LIFT healthcare centre assessed in the study. These assessments demonstrate a similar pattern to that in the naturally ventilated office, although the total uplift for achieving the highest standards is greater.

Key findings

Our analysis demonstrates that many sustainability measures can be implemented at little cost and a limited number of items are available at no additional cost or even offering a cost saving.

However, there is some additional cost associated with achieving exemplar standards of performance, particularly if the most appropriate sustainability solutions are identified in an ad-hoc manner late in the design development process.

Other broadly applicable findings were:

• Development location and site conditions have a major impact on the costs associated with achieving higher (that is, “Very Good” or “Excellent”) BREEAM/EcoHomes ratings. Any estimates of the cost of achieving a BREEAM rating should include a thorough review of site conditions.
• Effective management of the development process is critical to ensuring that all low-cost options are identified and achieved. Costs can rapidly increase once all the low-cost options have either been implemented or exhausted.
• To enable environmental performance to be maximised at lowest cost, it is vital to consider sustainability at the earliest possible stage of the development process, and that every effort is made to incorporate all the possible low-cost items.

Identified low- or no-cost options include:

• specifying water efficient appliances
• ensuring all timber is procured from sustainably certified sources
• committing to good construction practice (such as the Considerate Constructors Scheme)
• providing low-energy lighting.

• Air-conditioning should be avoided where possible. Not only does this help to reduce energy use and associated CO2 emissions, but the use of a passive system also avoids the need for expensive refrigerants (particularly those with low global warming potential) and refrigerant monitoring systems.
• A more sustainable building can present significant operational cost savings through lower utility bills. This is a benefit to owner occupiers, but can also be positive influence when selling or letting.
• Understanding the long-term energy-saving potential of different measures is particularly important with the imminent implementation of the new Energy Performance of Buildings Directive. This directive will require all new buildings, public buildings and buildings being let or sold to have an energy rating prominently displayed. This directive will increase the value of including energy saving items in any new building.

Managing sustainability in the development process

The case studies included here indicate the nature of costs involved in procuring buildings with “Good”, “Very Good” and “Excellent” BREEAM ratings. It is important to remember, however, that specific costs cannot be transferred directly to any site or situation, and each building project must be considered in terms of its own opportunities.

Ensuring that sustainability is considered early in the development process will enable maximum performance to be achieved at minimal cost. The case studies illustrate a number of items as being cost-neutral – however, this may not be the case if they are not incorporated into the development process at the right time. For example, there is generally no cost associated with procuring timber from a sustainably managed source; however the procurement team must know that this is a requirement.

A consistent approach to incorporating BREEAM or other elements of sustainability into the development process at the right time and selection of a development team with appropriate experience are essential to achieving a cost-effective approach that reflects the specific needs of the project.

Failure to do so can mean that the opportunities for free or for minimal cost increases are missed and thereby result in rapidly escalating costs for achieving the required level of performance.