Life Cycle Cost Analysis in Dynamic Modeling on High

Rise Green Retrofit Office Building

Dita Meilinda Saputri1, a), Albert Eddy Husin1, b)
Author Affiliations
1
Master Program of Civil Engineering, Universitas Mercu Buana, Jakarta, Indonesia
Jalan Meruya Selatan No 1 Kembangan, Jakarta Barat

Author Emails
a)
Corresponding author: albert_eddy@mercubuana.ac.id
b)
ditajitot@gmail.com

Abstract. Green Building is a form of concern for environmental sustainability, one of which is in the construction
sector. In the implementation of Green Building, several problems arise, including the initial investment cost, which is
very high compared to conventional buildings, and the lack of public understanding about the Green Building concept,
which plays a major role in improving environmental quality. This study aims to develop improvement scenarios to
analyze the results of implementing the concept. Green retrofit on high-rise office building project modeling and
simulation using the life cycle cost method for cost performance. From the research results, we have identified 10
factors that affect cost performance in high-rise office building projects.

INTRODUCTION

As a result of the global economic expansion, there is a high demand for office space in urban areas. The
increasing need for office space has prompted the construction of high-rise structures, especially in urban areas.
By 2020, offices will account for 58% of all new construction. [1].

Indonesia, as a developing country in the construction sector, has a planning system and a construction system
based on Green Building to achieve Indonesia Construction 2030. Indonesian construction must be oriented not
to contribute to environmental damage, but to be a pioneer in improving and improving environmental quality.
Building construction has a great influence on the environment. Construction of buildings in India generates
around 42% of greenhouse gas emissions [2], building construction in Thailand produces 21% of greenhouse gas
emissions [3], and the construction of buildings in Indonesia produces 30% of greenhouse gas emissions [4].

The failure to address the consequences of the building industry's development in emerging countries is a
concern. Construction accounts for more than 40% of worldwide energy consumption and a third of global
greenhouse gas emissions. In general, manufacturing and transportation of materials, building, maintenance, and
demolition consume 10–20% of energy [4].

Green building techniques have been used in Indonesian construction projects. The implementation rate in the
Badung Regency of Bali was 65.14%. Green construction was used 72.22% of the time in Makassar's construction
buildings [5]. Green Construction was implemented by 68.75% of the contractors. However, knowledge of Green
Building criterion standards among construction players is still limited, as indicated by the fact that only around
half of contractors are aware of the standards and benefits of applying Green Construction [6]. The Minister of
Public Works and Public Housing (PUPR) published Minister of Public Works and Public Housing Regulation
Number 05 of 2015 concerning general rules for the implementation of sustainable construction to improve the
implementation of Green Building in Indonesia. The organizers are obligated to carry out development using a
green construction strategy (Green Building) and to consider the social and economic factors of the place during
the implementation stage. Green behavior and practices, green construction processes, and construction supplier
chains are all covered under the ministerial regulation's Green Building approach.
One of the problems that arise in the implementation of green building is the increase in costs from the total
project costs ranging from 4.5% - 7% [7]. The investment costs of waste materials can be used to reduce the
management of rising costs in Green Building initiatives. Using aggressive 3R (reduce, reuse, recycle)
techniques, we were able to save at least 3.7 percent of the expected material cost [8].

To combat the cost increase, a control system using dynamic system integration and Life Cycle Cost Analysis
(LCCA), an economical tool that provides various possibilities for determining the most cost-effective cost based
on the input provided, has been implemented. One of the most crucial components in LCCA modeling using
dynamic systems is the discount rate factor, which is part of the LCCA [9].

METHODOLOGY

This journal has the main variable to obtain results, namely increasing cost performance in green office
projects, where the achievement of cost optimization is the dependent variable, while the independent variable is
green building. The main variables aim to get the optimal value of project performance results in terms of cost
performance on green retrofit building-based office projects, these main variables can be identified in the main
factors and divided into sub-factors that are expected to be interrelated variables. The results of the identification
of the main variables are supported by several sub-factors which are then identified their effects on dynamic
system integration and LCCA in improving the performance of green retrofit-based office building projects.

The instruments in this study were arranged by identifying sub-variables based on prior journals, then
arranging the sub-variables into a research instrument in the form of a questionnaire composed of question items,
with the question items being arranged by changing the existing sub-variables. Respondents will choose from a
list of options in the questionnaire that has been distributed to them. Validation and reliability tests were conducted
using the Statistical Package for Social Sciences (SPSS) application after the variables were sent to the experts. It
may be trusted that each question item in this questionnaire will produce valid results if r count > r table with a
significance level of 5% and Cronbach's Alpha value is greater than 0.60, as determined by validation and
reliability testing.

TABEL 1. Data of case study

Data Explanation
Location Jakarta, Indonesia
Office 1 segment
Office Area 19,000 m2
Owner PT. Mandiri Bank
Green building Green retrofit system
Cost Green IDR 12,230,151,585

Surveys on factors which affect cost effectiveness for high-level projects, green development factors and
dynamic modeling factors, are carried out by the Social Sciences Statistical Package (SPSS) and run by
expert choice software and validated by experts and/or advisers to obtain an order of major success factors
(key success factor). It will be known from these considerations whether the use of the modeling system
and the Lifecycle Costs Analysis (LCCA) procedure can optimize the project from a cost viewpoint for a
High-Level Bureau Project.

RESULTS AND DISCUSSION

Most Influencing Factors

After each main factor / criterion, the Statistical Package for the Social Sciences (SPSS) is used, and the next
level is to summarize the total weight of the current criteria, according to each main factor / criterion. In the past,
the global value (global priority) had to be first determined for the local priority. The overall global weight value
can be seen in table 2. The above figures indicate the general order of the factors influencing cost and time
performance on the project of the high-rise office with the following results:
 TABEL 2. The 10 most influential factors
Factor Weight
Project manager 11.18%
AC Material 10.92%
Lamp Material 10.69%
Use of air conditioning electricity 10.21%
Lighting electricity usage 10.18%
Discount rate 9.67%
Number of years 9.44%
Solar cell 9.31%
LED light 9.22%
Alternative water sources 9.18%

Lifecycle Cost Analysis (LCCA)

Life Cycle Cost Analysis (LCCA) is a tool for the cost assessment of each phase of a structure. LCCA has
four principal factors: building, operation, maintenance, and destruction. The discount, power inflation and
lifetime have an important impact on the building's LCCA too [10].

System dynamics

The System Dynamics methodology was first introduced by Jay Forrester of MIT (Massachusetts Institute of
Technology) in the 1950s ([11]. In this study, the system is defined as a collection of elements that continuously
interact over time to form a unified whole. A system dynamic approach is introduced to simulate scenarios, using
relevant data in real situations [18]. This research is primarily used to create a model concept in making a dynamic
system model. The second is to draw up a causal diagram (CLD) obtained on the basis of the results from the
collection of data on the factors influencing the project's high-level office building cost performance. The third
stage is to create a stock flow chart (SFD) based on the previously created CLD. The fourth stage is to determine
the formulation of the input value of the variables in the SFD that is made. The fifth stage is to validate the model
against the SFD that has been made.

Causal Loop Diagram

Modeling is the main concept of model making. The causal circle diagram is used to describe the relationship
between the variables involved in a systematic pattern. the positive relationship that is directly proportional,
where the addition of value to the variable will be caused by the addition of value to the variable it influences.
On the negative arrow, it shows an inverse relationship, the increase in the value of this variable will be caused
by a decrease in the value of the variable. Effect of variables From the CLD that has been made, it can be seen
that each variable is interrelated, one example is the construction cost factor, and the rework factor. The greater
the cost of construction, the greater the possibility of return on capital in a green concept building, on the contrary,
the smaller the cost of construction, the faster the return on investment of construction costs. CLD explains the
factors that affect the cost performance of a high-rise office building project with a green building concept that
is interrelated so that from the results of the CLD an SFD can be formed which will later become a model as the
basis for making scenarios.
The 10 variables contained in the Causal Loop Diagram are described as follows and their effects on the Cost
Retrofit are shown in Figure 1a, 1b, and 1c
 Project manager. The project manager of the project will determine the success of a project management
office building with green building materials and effective financial
 AC material. Material eco-friendly air conditioning to reduce greenhouse gas emissions
 Lamp material. Material energy-saving lamps can last 10 years of use, the energy produced is very small
and can save more electricity.
 Use of air conditioning electricity. Air conditioning electricity per day, which is 20 kWh so that it can
support energy savings in office building operations
 Lighting electricity usage. Lightning electricity usage is very environmentally friendly. The use of light
per day only produces 30 watts of energy, but it does not generate excess heat
 Discount rate. The discount rate is one of the factors of life cycle cost. The discount rate affects the return
on capital retrofit cost
 Number of years. The number of years is one of the factors of life cycle cost
 Solar cell. The solar cell is a power plant that can convert sunlight into the electrical current use of solar
cells without noise and does not cause environmental operations that are environmentally friendly
 LED light. LED lights use much less electricity. LED lights can increase energy efficiency by up to 70
percent so that it can save electricity costs. The quality of LED lighting is better so it can reduce the use
of bulbs and can reduce greenhouse gas emissions
 Alternative water sources. Alternative water sources as an effort to save water will affect maintaining the
stability of the quality and quantity of clean water supply and can save the environment. The use of
recycled water can cover 20% of the total water needs of the building.

Project manager water resources

lighting electricity

Sollar cell

Cost green total

Cost green

LED lamp

Lamp material
AC electricity
AC VRV

Figure 1a. The 10 variables causal loop diagram

lighting electricity

Cost green total

Cost green

Lamp material

AC electricity
AC VRV

Figure 1b. Material Retrofit Cost causal loop diagram

Project manager
lighting electricity

Cost green total

Cost green

Figure 1c. Retrofit Cost causal loop diagram

 Eight of the ten major variables in Retrofit Cost have a cost value. The table 3 shows the amount of money
spent for each variable on retrofit costs.

TABEL 3. Amount of variables Retrofit Cost

Factor Price Percentage
Project manager IDR 90.000.000,00 0,74%
AC Material IDR 3.750.000.000,00 30,66%
Lamp Material IDR 1.500.000.000,00 12,26%
Use of air conditioning electricity IDR 900.000.000,00 7,36%
Lighting electricity usage IDR 840.151.584,87 6,87%
Solar cell IDR 1.200.000.000,00 9,81%
LED light IDR 1.200.000.000,00 9,81%
Alternative water sources IDR 2.750.000.000,00 22,49%
Total IDR 12.230.151.584,87 100%

Stock Flow Diagrams

Table 4 shows the value of each variable that affects the project cost increase variable obtained by using the
normalized weighting technique from the results of the expert's software selection process using the SPSS
program process, after which these values are entered into the Powersim Program with the system methods
dynamics. Before creating a scenario, first, the initial validation of the model that has been made is based on a
causal loop diagram (CLD), validation testing is carried out by using the average comparison test and the variation
of the amplitude of the comparison test. It is said to be valid if the mean comparison value is <5% and the
amplitude variation of the comparison value is <30% [12].

TABEL 4. Weighted value on variables

Factor Explanation

AC VRV IDR 376,275,890

LED light IDR 117.462.272

Plumbing System IDR 12,586,948

Glass IDR 10,023,826.476

Solar cell IDR 1,700,000,000

Scenario

The scenario model aims to improve system performance in overcoming existing problems, the types of
scenarios that will be carried out are cost green and lifecycle cost analysis (LCCA) improvement scenarios by
providing several improvement scenarios. Below are table 5 & table 6 regarding alternative scenarios for selecting
retrofit cost savings when applied to similar projects. The following are some formulations of improvement
scenarios used in this study:
TABEL 5. Retrofit Cost Scenario
Scenario Explanation
Pessimistic scenario Pressing labor wages
1. Comparison of material prices
Moderate scenario
2. Reducing labor wages
1. Comparison of material prices
2. Reducing labor wages
Optimistic scenario 3. Determination of the right working method
4. Systematic control mechanism
5. Experienced subcontractors
 TABEL 6. Lifecycle Cost Analysis Scenario
Scenario Explanation

Pessimistic scenario Discount rate 14.86%

Moderate scenario Discount rate 13.60%
Optimistic scenario Discount rate 12.63%

The model of each scenario, namely the pessimistic, moderate and optimistic scenarios is shown sequentially
in the Figure 2, Figure, 3 and Figure 4.

TL lamp
wall

pump

AC human resources

existing material
Initial cost

cost efficiency
Cost green Improvement
scenario

Green building
material Pressing labor wages
Sollar cell
LED lamp
AC VRV

Water resouces green building

human resources
Stopsol

FIGURE 2. Stock flow diagram for the pessimistic scenario cost green
 Wall TL lamp
Pump
human resources
AC

Exisiting material
Initial cost

Cost efficiency
Cost green Improvement
scenario

Green building comparison of

material material prices Reducing labor
Sollar cell wages
LED lamp

AC VRV green building

human resources
water resources

stopsol

FIGURE 3. Stock flow diagram for the moderate scenario cost green

TL lamp
pump
wall
AC

initial cost Exsisting material human resources

Cost green Cost efficiency Improvement

scenario

Sollar cell
green building
material

LED lamp
comparison of
water resources Green building Experienced
material prices
stopsol human resources subcontractors
AC VRV

Reducing labor Systematic control

wages mecanism
Determination of the
right work method

FIGURE 4. Stock flow diagram for the optimistic scenario cost green

From the scenario discussion above, if applied to a high-rise office building project, the value of the savings can be
calculated to minimize the cost green on a similar project as in table 7 and table 8. The following is a table of alternative
scenarios for selecting retrofit cost and life cycle cost analysis savings if applied to similar projects.
 TABEL 7. Simulation result of retrofit cost Improvements
Factor Result Explanation

Pessimistic scenario 8.5% IDR 10,382,385,044

Moderate scenario 6% IDR 7,302,024,143
Optimistic scenario 3.5% IDR 4,221,663,242

TABEL 8. Simulation result of lifecycle cost Improvements

Factor Explanation
Pessimistic scenario Payback takes 1 year
Moderate scenario Payback takes 9 months
Optimistic scenario Payback takes 8 months

The overall dynamic modeling of Green Building retrofit costs is depicted in Figure 5. In this modeling, it is clear
that each factor has an impact and is dependent on the decision to retrofit a green building. This modeling can be used
in similar situations, such as high-rise existing buildings.
 income year Existing cost pump

labor cost pump

wacc
Operasional AC ac 1 operasional lamp
payback periode lamp
ac durasion
cost operasional AC
WACC 1 NPV EX equipment cost pump
maintenance cost pump lamp durasion

WACC 2 LCC EX cost operasional lamp

WACC 4 cost lamp
WACC 3

cost ac labor cost ac

labor cost lamp operasional water
cost AC ex
maintenance cost lamp cost opersional electical
building rental time 1
Planning cost NPV GB durasion of used
LCC equipment cost lamp
equipment cost ac
TL lamp maintenance cost AC
pump
operasional cost
wall Maintenance cost EX
AC income year GB
LCC GB Operasional cost Ex Operasional cost Ex
Total NPV EX
1
material ex human resources
income cost EX NPV EX 1
Total Maintenance cost Ex
initial cost

operasional cost water

duration of used PDAM

cost green Total reduce cost green
improvment cost green NPV EX 2 meterial cost wall
NPV EX 3 PDAM cost usage cost water ACVRV
NPV EX 4 Maintenance year Persentase Sollar cell
maintenance cost wall
Existing
work method
Operasional years
Existing amount of usage
Duration AC VRV
Sollar cell labor cost wall LED lamp
Green building material
control mecanism
income cost GB
subcontractors Total NPV GB used AC VRV
LED BTKP equipment cost wall Operasional cost GB
water resouces material price PDAM GB
AC VRV comparison
labor wages
Green buuilding human
reosurces NPV GB2
stopsoll NPV GB3 BMP operasional cost AC VRV
LED duration opersional LED
operasional cost AC VRV
cost PDAM GB water GB
2
NPV GB1 NPV GB4
BPP Jumlah AC VRV

cost electrical LED

used water LED joint cost operasional lamp 1 Persentase kaca

maintanance cost cost water GB
recycle pump

% glass
BTKK
BMK

equipmnent cost AC VRV

BPK
amount Maintenace cost GB Maintenance cost GB

maintenance cost glass

labor cost AC VRV
material cost ac VRV
maintenance cost AC
VRV
maintenance year

FIGURE 5. Stock flow diagrams LCCA

 CONCLUSION

Based on the results of the study, 10 factors affect the retrofit cost performance of high-rise building projects,
namely project manager, ac material, lighting material, use of air conditioning electricity, use of lighting electricity,
discount rate, number of years, solar cells, LED lights, alternative water sources. From the results of system dynamics,
it is found that the selected scenario that can minimize the cost of green and LCCA in high-rise building projects is
the optimistic scenario of reducing green costs by 3.5% and the payback period within 8 months.

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