Sustainable Cities and Society 44 (2019) 715–725

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Sustainable Cities and Society

journal homepage: www.elsevier.com/locate/scs

The importance of life-cycle based planning in maintenance and energy T

renovation of multifamily buildings
Abolfazl Farahani , Holger Wallbaum, Jan-Olof Dalenbäck
⁎

Department of Architecture and Civil Engineering, Chalmers University of Technology, Gothenburg, Sweden

ARTICLE INFO ABSTRACT

Keywords: Improving the energy performance in the real estate sector has become increasingly important and drawn a lot of
Energy renovation attention during the past few decades. Despite all the technological developments, the energy efficiency mea-
Energy efficiency sures are yet expensive and when implemented only to improve the energy performance, are rarely economically
Maintenance justified. To lower the costs of energy performance improvements, an alternative is to combine energy efficiency
Buildings
measures with already required renovation measures. The problem with renovation on the other hand, is that its
planning is not strategic; it is mainly opportunistic, short-term and with the focus on the capitalization of newly-
discovered opportunities, meaning that renovation measures are coupled when one or more of the rather costly
building components have reached failure. The take on an opportunistic approach, however convenient, results
in loss of value which is most often neglected in the economic evaluation of renovation projects. The lack of
strategic planning and the subsequent loss of value become more important in less-attractive markets, where
there are both budget constraints and socio-economic issues. Energy performance and/or living standard are
often sacrificed through improper distribution of resources as the choice of renovation measures are often in-
fluenced by the return of investment. Therefore, a proper evaluation of renovation alternatives not only can
satisfy the technical and financial requirements but also help maintain proper living standard and improve the
energy performance in multifamily buildings. In a prior study, authors have proposed a systematic approach to
cost-optimal maintenance and renovation planning by combining the deterioration function of building com-
ponents with respective service-life cycle costing. This paper presents an extension of that methodology to
include the energy efficiency option pricing as an optimization criterion. The extended methodology is meant to
provide support for housing owners in building management in forms of technical and economic evaluation of
possible energy-renovation scenarios under time/budget constraints. To demonstrate the application of the
methodology, maintenance/renovation plans are devised for three building components with sharing fixed costs
(windows, faöade and roof) in both new and existing multifamily buildings.

1. Introduction
The real estate sector is the largest consumer of energy in Europe,
accounting for almost 40% of the total energy use and 36% of the
greenhouse gas emissions (IEA, 2015). Considering the low energy
performance of the existing buildings, the lower than expected rate of
renovation and the continuous growth of the total global energy de-
mand in this sector, buildings are expected to add substantial pressure
on the primary energy supply in near future (Atanasiu & Kouloumpi,
2013). That is why energy renovation has gained a lot of attention and
became of quite importance to the real estate sector in recent years.
Energy renovation measures are important not only to improve the
buildings’ energy performance but also to help them comply with
current living standards and regulations. In this regard, the European
Union has adopted number of directives to promote energy renovation
such as: the Energy Performance of Building Directive (EPBD), the
Ecodesign Directive and the Labeling Directive; however the increased
investment risks due to lack of information and transparency have
stagnated the energy renovation progress (Fabbri, Groote, & Rapf,
2017).
Building owners generally have to face multiple barriers to invest in
energy renovation in their portfolio. Apart from the financial con-
straints, lack of knowledge in the renovation process is often a crucial
hindrance. To facilitate the renovation progress, information specially
in regulatory compliance, planning, cost management, operation and
maintenance, insurance and investment need to be systematically

⁎
Corresponding author.
E-mail addresses: abolfazl.farahani@chalmers.se (A. Farahani), holger.wallbaum@chalmers.se (H. Wallbaum), jan-olof.dalenback@chalmers.se (J.-O. Dalenbäck).

https://doi.org/10.1016/j.scs.2018.10.033
Received 5 June 2018; Received in revised form 17 October 2018; Accepted 23 October 2018
Available online 26 October 2018
2210-6707/ © 2018 Elsevier Ltd. All rights reserved.
A. Farahani et al.
collected and become available to the decision makers (Sesana &
Salvalai, 2018).
The introduction of the Energy Performance Certificates (EPCs) in
2002 by the Energy Performance of Building Directive (EPBD)
(European Commision, 2002) as a mandatory requirement for the EU
member States was an attempt toward eliminating the knowledge
barrier. However, the EPCs’ general recommendations without specific
information and lack of important indicators related to the thermal and
visual comfort or the air quality that are important benefits of a
building renovation practice resulted in the low acceptance of the EPCs’
by the users and consequently limited market penetration.
In order to provide tailor-made and understandable information
about renovation potentials the EPC’s needed to be developed into in-
dividual renovation roadmaps, which would follow buildings
throughout the service life and facilitate the realization of consistent
customized renovation recommendations. This resulted in the evolution
of the EPCs into Building Renovation Passports (BRPs) (Fabbri, De
Groote, & Rapf, 2016).
The BRPs in addition to providing information regarding the energy
performance, support building owners with personalized instructions
(roadmaps) on renovation alternatives quantifying the potential energy
savings and related costs of the potential measures (Sesana & Salvalai,
2018). In this regard, the BRPs can push the renovation market forward
by providing necessary knowledge to the building owner and reducing
the investor’s risks.
One important guiding principle in developing BRPs relate directly
to the suggestion of the right timing and sequencing of actions in energy
renovations (Sesana & Salvalai, 2018). In energy renovation planning, a
common approach to the cost-effective energy performance improve-
ments is to combine energy efficiency measures so that the lower cost-
to-saving ratio of the cheaper measures compensate for the more ex-
pensive measures (Rysanek & Choudhary, 2013; Terés-Zubiaga,
Campos-Celador, González-Pino, & Escudero-Revilla, 2015; Verbeeck &
Hens, 2005). Moreover, there are great saving potentials in combining
energy efficiency measures with already required renovation measures
as the investment costs can be reduced to only the marginal costs.
Consequently, there has been an increase in the relative importance of
the deep-renovation1 practice where most renovation measures are
carried out at the same time in order to save on the sharing fixed and
logistic costs.
One problem with the deep-renovation practice is that the economic
evaluations are usually not made in a life cycle perspective. The main
underlying reasons are: lack of expertise, complexity of the problem
and also that the renovation plans are often opportunistic therefore
short-term (both in terms of planning and payback time) with the focus
on the capitalization of newly-discovered opportunities (Mjörnell, Boss,
Lindahl, & Molnar, 2014). Renovation processes in general are complex
and uncertain in terms of decision-making and planning (Economidou,
Laustsen, Ruyssevelt, & Staniaszek, 2011; Femenías & Fudge, 2010;
Reyers & Mansfield, 2001; Rosenfeld & Shohet, 1999). Renovation
planning becomes even more complex when market conditions are not
in favour of the building owners and incautious actions can result in
financial repression and socio-economic issues (Farahani, 2017). For
example, an expensive deep-renovation can result in either increased
vacancy or gentrification whereas renovation to lower standards can
reinforce segregation, result in poor relative living standard and low
energy performance. To avoid these consequences, there is a need for a
systematic approach to strategic renovation planning through which
life cycle costs can be minimized and sustainability values be taken into
accounts.
In this regard, the energy and economic performance metrics can
1
Deep-renovation here does not refer to the level of energy savings in re-
novation but combining different renovation measures to lower the fixed and
logistic costs.
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Sustainable Cities and Society 44 (2019) 715–725
directly benefit towards sustainable renovation by means of providing
better living standards and help diminishing socio-economic segrega-
tion. An economically justified renovation which results in higher en-
ergy performance, improved indoor condition and better living stan-
dard not only benefits the housing owners by means of creating a more
attractive living space for prospective tenants but also help existing
tenants by stabilizing the rent levels.
However, as mentioned earlier, current planning procedures for
renovation practices follow mainly on an opportunistic deep-renovation
approach. In this approach, costly renovation measures are carried out
at once when one or more of the rather expensive building components
have reached or is reaching failure. Even though deep-renovation leads
to reduced fixed- and logistic costs, in many cases the take on an op-
portunistic approach and the lack of long-term planning result in an
unrecognized loss of value in building components. The loss of value in
component level corresponds to the costs of nonutilized service life in
respective components. Available maintenance and renovation bud-
geting tools do not include this loss of value in the economic evaluation
of renovation projects (Brandt & Wittchen, 1999; Caccavelli & Gugerli,
2002; Flourentzou, Genre, Roulet, & Caccavelli, 2000; Flourentzou,
Brandt, & Wetzel, 2000). This is partly due to the complexity and un-
certainty involved in estimating the life expectancy of building com-
ponents under different in-use conditions (ISO15686-8, 2011).
In a prior study (Farahani, 2018) a systematic approach to strategic
renovation planning was introduced that helps decision makers take
advantage of the deep-renovation benefits while avoiding the loss of
value in the respective components. Based on that approach, a model
was developed to optimize the life expectancy of building components
by subjecting the respective components to different maintenance re-
gimes. The model uses time-condition performance and budget con-
straints criteria in the optimization process. Since, energy efficiency
measures are carried out together with already renovation measures,
changes in the life expectancy of building components change the time
for energy performance improvements hence the savings made through
energy use reductions. And so, in order to be able to fairly evaluate
renovation alternatives these savings need to be taken into account.
Therefore, this study presents an extension of the model (Farahani,
2018) to include energy performance improvement as an optimization
criterion. The addition of energy performance improvements, includes
both the marginal investment costs of implementing energy efficiency
measures and the reduced costs of operation (savings made through
energy use reductions) in the economic evaluation of energy-renovation
plans. The outcome is the cost-optimal energy-renovation year (along
with its respective maintenance plan) for the given combination of
building components. The expected total investment savings are meant
to lower the budgetary pressure on both the housing owners and the
existing/prospective tenants with respect to the implementation of
energy efficiency measures and maintaining the affordable rent levels.
The resulting long-term renovation plans can create opportunities for
the owners to elevate living standards (specially in less-attractive
markets) and improve the energy performance at lower costs.
2. Method
The theoretical framework used in this study is based on the dete-
rioration model proposed in (Farahani, 2018). In this model, the de-
terioration behaviour of building components is explained in the form
of condition-deterioration curves using Eq. (1) where deterioration
behaviour is divided in to two phases both of which are expressed by
the power law. Phase one describes the initial irreversible degradation
process and the second phase describes the phase during which the
condition of building components is retrievable by means of main-
tenance. Consider a building with n non-identical components where
component’s condition state can be characterized by a physical variable
Coi with i = {1, 2, …, n} . Each component is presumed to have one
minimum accepted quality (condition) and j = {1, 2, …, m}
A. Farahani et al.
maintenance operations. Assuming Coi (0) = 1 for a new component, the
deterioration model predicts the future condition state Coi (t ) of a
component at given time, t . A threshold Coi, min (minimum accepted
condition) is identified for each component to determine the end of
corresponding estimated service life (ESL). When the condition state
reaches the minimum accepted level, Coi, min , the component i is con-
sidered unusable (has reached failure).
( )
i, 1
t
1 t swi phase 1
Coi (t ) =
t swi
( )
(t t swi ) i,2
Coi (t swi ) Coi (t swi )
Coi (t swi )
where: t swi - time when phase 1 ends and phase 2 begins; i - exponent
defining the shape of the condition curve during each phase; Coi (t swi ) -
condition at t swi .
Using the deterioration function, the model simulates the condition
state of the given components under different maintenance intervals/
frequencies and calculates the estimated service life and the corre-
sponding service-life cycle costs for each respective plan. The condi-
tion/deterioration figures, in this study for the simplification purpose,
are replaced and presented by planning figures where only maintenance
and renovation years are marked, Fig. 1. The figure on top shows the
condition/deterioration curve whereas the bottom figure only shows
the corresponding maintenance and renovation years. Here, years 15,
30 and 45 correspond to the maintenance years and year 50 corre-
sponds to the replacement/renovation year. As it is shown in the top
figure, the replacement/renovation year is marked as the time when the
condition/deterioration curves reach the minimum accepted quality. In
order to identify properties related to the minimum accepted quality,
Coi, min , performance requirements regarding safety, function and aes-
thetic, should be specified for each component (Moser, 1999). For ex-
ample, the life expectancy can be defined by aesthetic requirements
before the minimum condition level is reached with respect to safety or
functionality.
Next in the simulation process, in a multi-criteria optimization
process, depending on limitations/restrictions, the cost-optimal re-
novation year is chosen and the corresponding budgeting plan is gen-
erated. Since in the deterioration model, the EAC (Equivalent Annual
Cost) method is used for the life cycle cost analysis, the addition of an
energy efficiency criterion requires the costs and benefits of the energy
efficiency investment to be expressed annually for the results to be
Fig. 1. Condition/deterioration curve (on the top) and the corresponding renovation plan (in the bottom).
Sustainable Cities and Society 44 (2019) 715–725
comparable.
For this purpose, the longest simulated service life is considered as
the reference service life for the three components. To calculate the
costs of different options (option pricing), the EE investment is im-
plemented in different years, (service lives). Thereafter, the savings
made through the implementation of energy efficiency measures (re-
duced energy use), between the simulated and the reference service life
is divided by the annuity factor to calculate the savings made in form of
EAC values (Eq. (2)). For the results to be comparable, the annuity
factor for the savings is calculated using the longest service life,
whereas the annuity factor for maintenance/renovation costs for each
phase 2
(1) simulated plan is calculated using the simulated service life.
1 ESLi Ctesti (1 + rc )t 1 ESL1 Se. E . Ce (1 + re )t
EACi =
AESLi, rd t=0 (1 + rd )t AESL1, rd t = ESLi (1 + rd )t
(2)
where: A ESLi, rd – is the present value of the annuity factor for plan i ;
A ESL1, rd – is the present value of the annuity factor for plan 1 (ESL1 refers
to the shortest maintenance interval thus the longest service life); Ctesti -
is the estimated cost for plan i in year t ; ESLi - is the service life for plan
i ; Se - is the potential energy saving; Ce - is the energy price; E - is the
total energy use and re and rd - are the prices differential rate (in costs of
services and materials) and discount rate, respectively. The present
value of annuity factor is used in order to simplify the evaluation of the
total cost in different maintenance plans and is equal to
1 (1 + rd ) ESL1
AESL1, rd =
rd (3)
The cost function includes all the costs identified for the
Ctesti
maintenance and replacement of each building component plus the
marginal costs of energy efficiency measures. For example, for win-
dows, proactive maintenance cost includes the costs of: frame adjust-
ments; handles and hinges fixation; new sealing and repainting the sash
and the frames. The reinstatement cost includes the total costs of in-
stalling a new identical window. And the energy efficiency cost be-
comes the difference between the total costs of the new more energy
efficient window and the reinstatement cost.
Ctesti = Cinsp + Cpro + Crein + CEE (4)
where: – is the cost function; Cinsp - is the inspection cost; Cpro - is
Ctesti
the proactive maintenance cost (of different types); Crein - is the
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Fig. 2. the modelling process flowchart.

reinstatement cost and CEE - is the marginal cost of the respective en- plan is calculated in Swedish Krona (SEK), 1 SEK = 0.1 Euros.
ergy efficiency measure. The estimation of the total cost for each The flowchart below, Fig. 2, illustrates the modelling process used
component is based on market average values. The total cost for each for the following simulations. The input variables as shown in the figure

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Table 1 For the energy efficiency, as an optimization criterion in this study,

maintenance and renovation data for the given components, (SABO, 2013; only the effects of timing is assessed which relates to the year of the
Westerbjörk, 2015). implementation thus the results stand valid regardless of the invest-
Component/measures Cost per Latest Energy ment’s profitability status.
façade maintenance saving Three building components are chosen for this study to demonstrate
area interval/Initial potential the given methodology; windows, façade and roof. The three compo-
service life (year)
nents are expected to financially and logistically benefit from a com-
Façade 147 25 – bined maintenance and/or renovation practice. The chosen components
- Repainting SEK/m2 and their corresponding service life costs represent some of the more
- expensive measures in residential buildings for which maintenance/
- Scaffolding + weather
renovation budgeting optimization make sense.
protection
- High pressure cleaning
The description of condition-deterioration models depends on the
- Decolouring + repainting identification of the degradation mechanism. For the three components
- Replacement 693 35 – considered for this study, namely the cementous plaster façade, the
- SEK/m2 double-glazed wooden windows and the plain copper sheet roof, con-
- Scaffolding + weather
dition states and required maintenance actions are based on the eva-
protection
- Replacement + painting luation of the physical and visual degradation of the respective com-
- Energy efficiency 231 – 8% ponents.
- SEK/m2 These components are assumed to be part of a multifamily building
- Added insulation
with windows to wall and roof to wall ratio of 1/3. The total energy use
Windows 141 20 –
- Repainting outside SEK/m2
is assumed to be 140 kW h/m2 and year. Table 1, shows the main-
- tenance measures assigned to each component including different op-
- Repainting the outer frame erations, maintenance conditions and the respective energy efficiency
- Repainting the windows sash measure. Since the energy efficiency investment to be used in the model
- Skylift
can be both profitable or unprofitable, the given energy saving poten-
- Adjustments 146 20 –
- SEK/m2 tials in the following table is considered as the average calculated en-
- Handles and hinges fixation ergy savings possible through the use of the given energy efficiency
- Mounting new sealing measures (Westerbjörk, 2015). The energy saving potentials remain the
- Repainting inside 102 20 – same irrespective of the implementation order.
- SEK/m2
- Repainting the middle sash
All the assumptions used in the economic evaluation of the simu-
- Repainting the inner frame lated maintenance/renovation scenarios are given in Table 2. The
- Repainting the inner sash sharing fixed costs on the other hand, is a share of maintenance/re-
- Replacement 1431 30 – novation costs that are similar in the three components, i.e. the cost of
- SEK/m2
scaffolding.
- Scaffolding + weather
protection For the optimization of the life expectancy of the given components
- Demounting a Matlab code is developed based on the modified deterioration-func-
- New windows tion introduced in the previous study (Farahani, 2018). Three scenarios
- Handles, fittings and lock are considered to illustrate the economic effects of timing in the im-
chains
- Inner casing and sealing
plementation of energy efficiency measures. The first two scenarios deal
- Outer sealing including with planning in buildings under normal in-use conditions whereas the
windowsill third scenario applies the deterioration model to a building under
- Energy efficiency 477 – 12% worsening in-use conditions. In all three scenarios, the energy efficiency
- SEK/m2
measures chosen for the respective components are only for illustration
- Triple-glazed windows (0.8
U-value) purposes and the corresponding costs and potential energy use reduc-
Roof 175 20 – tions are the average values based on ‘Halvera mera’ study,
- Repainting SEK/m2 (Westerbjörk, 2015).
- In the simulations, the reference year used for the calculation of
- Repainting of the sheets
- Fixing the roof safety
energy saving costs is chosen to be the longest service life amongst the
apparatus three components during which the technical/performance require-
- Replacement 1477 35 – ments for each individual component are met. All the scenarios are
- SEK/m2 simulated only for the maintenance regimes that keep the respective
- Scaffolding + weather
components in accepted/proper working condition. Therefore, post-
protection
- Dismounting the metal sheets poning maintenance and/or its negligence are excluded from the
- Double-rolled roofing
- Sealing and weatherproofing
- Replacing the downpipes Table 2
- Fixing the roof safety assumptions used in the calculation of the energy savings (Westerbjörk, 2015).
apparatus
- Energy efficiency 246 – 6% Parameter Value
- SEK/m2
Building energy use 140 kW h/m2. year
- Added insulation
Energy saving potential 26%
Energy price (average) 0.9 SEK/kWh
Growth rate in energy price 1%/year
Inflation 0%
Growth rate in construction and services costs 2%/year
can be estimated (or be taken from available datasets) and then cali-
Discount rate 6%
brated through inspections. This allows for a more accurate estimation Sharing fixed cost 150 SEK/m2
of the life expectancy.

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Table 3
summary of the three simulation scenarios.
Energy efficiency Renovation strategy Building condition / reference year Planning approach

Scenario 1 Included Gradual/Deep normal condition BAU

Scenario 2 Included Gradual/Deep normal condition Cost-optimal
Scenario 3 Included Gradual/Deep worsening condition BAU & Cost-optimal

Fig. 3. BAU gradual energy renovation plan.

optimization results. This assumption ensures that a proper living For the gradual energy renovation strategy in this scenario, win-
standard is met for the tenants by maintaining the standard condition dows and roof are scheduled to be maintained every 15 years whereas
and working performance throughout the service life of the respective for the façade, the maintenance interval is set at 20 years. The esti-
components. mated service life is 50 years for both façade and windows and 45 years
The first scenario represents an energy-renovation plan for a for the roof. The simulated maintenance/renovation plans are in-line
building managed according to industry-standard maintenance and with the recommended maintenance/renovation intervals given by the
renovation guidelines. Both gradual (step-by-step) and deep-renovation local guidelines (SABO, 2013). Fig. 3 shows the maintenance plans and
strategies are discussed in this scenario. In the second scenario, using the respective renovation year for the three components in this sce-
the proposed method, the energy-renovation plans are optimized for nario. The total cost for the gradual energy renovation plan in the first
both gradual- and deep-renovation strategies. In the end, the third scenario is calculated at 104 SEK/m2, year. The calculated individual
scenario illustrates a case where a building with worsening in-use and total costs for the given plan is given in Table 4. In the table the
conditions is subject to maintenance and energy-renovation planning. A fixed costs are the sharing fixed and logistic costs and the energy sav-
summary of the scenarios studied in this paper are given in Table 3. ings are the savings made through energy use reductions.
Here in this scenario if the owner’s decision is to take on a deep
renovation approach, since the renovation year for each component is
3. Results and discussion
considered to be the year of failure (after which the respective com-
ponent is unusable), the shortest service life amongst the three com-
3.1. First scenario
ponents is to be chosen as the renovation year thus year 45 is to be
chosen for deep renovation. In this case, all three components are to be
In the first scenario, energy-renovation plans are presented for the
renovated at the designated year (Fig. 4).
three components using the industry-standard maintenance and re-
In this strategy, the last maintenance measure for windows is
placement intervals given by the local guidelines (SABO, 2013), (BAU
eliminated and replaced by the respective renovation measure. As for
scenario). This scenario is considered to be representing the most
the façade, the renovation measure is simply brought forward to year
common approach to maintenance and energy renovation planning in
45. Considering that such renovation planning is opportunistic, deci-
multifamily buildings in Sweden. In this scenario the respective com-
sions are made in a short notice, year 45 becomes the only option for
ponents are considered to be used under normal in-use conditions.
renovation if the acceptable working condition of the respective
building components are to be met.
Table 4
details of the BAU gradual energy renovation plan.
The calculated total deep energy renovation cost, given in Table 5,
indicates almost no financial gain in combining renovation measures in
Maintenance interval Renovation year EAC (SEK/m2, the deep renovation strategy as opposed to the gradual renovation. In
(years) year)
the deep renovation strategy, the total cost has remained almost the
Windows 15 50 43.5 same at 103.5 SEK/m2, year. This exemplifies the importance of life
Facade 20 50 14.5 cycle cost assessment in renovation planning as the presumed cost re-
Roof 15 45 29.5 ductions (fixed costs and energy use) are taken away by the higher life
Fixed costs – – 20.5
cycle costs (loss of value) of the façade.
Energy savings – – 3.5
Total – – 104.0 In practice, most often the economic evaluation of renovation pro-
jects does not include a complete service-life cycle cost analysis. Deep

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Fig. 4. BAU deep energy renovation plan.

Table 5 in premature renovation of the respective components.

details of the BAU deep energy renovation plan. In order to demonstrate the importance of early energy renovation
Maintenance Renovation year EAC (SEK/m2, year) planning, in the second scenario, the proposed method in this study is
interval (years) including energy used to find the cost-optimal energy renovation plan for the given three
efficiency building components. Applying the method, the service lives of the
respective components are optimized where total renovation costs,
Windows 15 45 43.5
Facade 20 45 17.0
technical performance and energy performance improvements are
roof 15 45 29.5 taken as optimization criteria. To optimize the service life for an in-
Fixed costs – – 18.0 dividual component, the service-life cycle cost analysis is carried out on
Energy savings – – 4.5 the estimated life expectancy under different maintenance regimes to
total – – 103.5
create a cost profile from which the estimated service life which results
in the lowest life cycle cost is chosen as the cost-optimal energy re-
novation year, Fig. 2. Thereafter, an energy renovation plan for the
renovation is often considered as the profitable strategy compared to cost-optimal combination of the three components is devised by cal-
the gradual renovation since it offers advantageous in both financial culating the estimated reductions in fixed- and logistic costs in potential
and administrative terms. Nonetheless, it is shown in the first scenario combination scenarios.
that the value loss due to premature renovation of building components Fig. 5 displays the total life cycle cost reductions for a single com-
can overthrow the aforementioned benefits. Therefore, an opportunistic ponent (windows) using both an opportunistic and strategic (long term)
deep energy renovation would be financially justified only if the savings energy renovation planning. As it is shown, the total cost in strategic
made through the reduction of fixed costs by combining renovation planning constantly stands lower than the total costs in opportunistic
measures as well as through energy use reductions, resulted in savings planning at point by point cost difference for different renovation years.
greater than the energy efficiency investment costs and the loss of value The increasing life cycle costs in opportunistic planning in shorter

Fig. 5. the effects of energy renovation strategy on the life cycle costs of windows.

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Table 6 opportunity to budget future maintenance-renovation costs and enough

Details of the cost-optimal energy renovation plan. time to prepare for the upcoming renovation project.
Maintenance Renovation year EAC (SEK/m2, year) Changes in the in-use conditions can result in faster/slower dete-
interval (years) including energy rioration of building components which in return alters the life ex-
efficiency pectancy of the respective components. In the third scenario, the pro-
posed situations are meant to represent more realistic situations where
Windows 18 48 37.5
Facade 24 42 15.5
maintenance and energy-renovation are planned for a building under
Roof 18 42 31.0 worsening in-use conditions. In reality as there can be changes in the in-
Fixed costs – – 16.0 use conditions (ISO15686-8, 2011), maintenance and energy-renova-
Energy savings – – 4.5 tion plans become subjects to changes and opportunistic decisions. To
total – – 95.5
avoid this situation, a proper inspection regime is required so that
changes in the deterioration behaviour of building components can be
realized and the maintenance/renovation plans can be adjusted ac-
service lives, represent the loss of value in pre-mature energy renova- cordingly (Farahani, 2018).
tion of the respective component (windows). Whereas, in the strategic
planning, the maintenance plans are optimized so that there is no loss of
value in the earlier energy renovation years. 3.3. Third scenario

3.2. Second scenario
In this scenario, the model is used to obtain the cost-optimal energy
renovation plans for the respective components. Fig. 6, displays the
devised cost-optimal energy renovation plan. In this plan, the potential
combined maintenance and energy renovation years for the three
components that result in the lowest total life cycle costs are chosen as
the cost optimal energy renovation plan. The total cost in this alter-
native plan is calculated at 95.5 SEK/m2, year is 8% lower than the total
cost in the opportunistic deep renovation plan in the first scenario with
the total cost of 103.5 SEK/m2, year. The 8% reduction comparing to
the deep-renovation plan in the first scenario, is equal to 73% of the
total marginal energy efficiency investment costs. The detailed life
cycle costs for each component together with the total fixed costs and
the energy savings are given in Table 6.
The given cost-optimal plan suggests earlier renovation years
comparing to the industry standard plan (scenario 1) for both roof and
façade at 42 years of service life and for windows at 48 years of service
life. The earlier renovation years and the cost-optimal maintenance
schedule result in higher energy savings at 4.5 SEK/m2, year and lower
total fixed costs at 16 SEK/m2, year.
In the optimization of the maintenance/renovation plans, the time-
condition (technical performance) for each component is considered as
the main limitation so that the respective components stay at proper
working condition throughout their service lives. Having a long-term
energy renovation plan gives housing owners/managers the
In the first case in this scenario, it is assumed that the in-use con-
ditions for windows and façade have been worsened in time. Due to the
changes in the indoor condition, outdoor environment and tenants’
behaviour, the windows’ and façade’s deterioration rates are assessed to
have been increased so that the assessed conditions are equal to the
expected conditions in 4 and 5 years, respectively.
In a BAU scenario, once the increased deterioration is observed,
maintenance is carried out as soon as the condition limits have been
reached, year 11 and 15 for windows and façade respectively, Fig. 7.
Since the deterioration for both components have been increased, the
shorter maintenance intervals are used for future maintenance activ-
ities. As for the roof, considering that there have been no changes in the
deterioration behaviour, similar to the first scenario, the industry
standard maintenance plan is applied.
The faster deterioration results in shorter life expectancy. The esti-
mation of the life expectancy is possible through inspections towards
the end of the service life when the overall condition is low. Therefore,
in this case, through a condition assessment by the time the last
maintenance measure has been carried out for the windows, year 33, a
preliminary renovation year can be estimated, Table 7. Evaluating the
overall condition of the façade at the same time, the preliminary re-
novation year for façade can also be estimated. Since the two life ex-
pectancies are close, the common approach is to take advantage of the
opportunity and plan for a deep energy renovation practice, year 37.
In this situation, the resulting higher total costs for windows and
façade comparing to the industry standard plan illustrate the effects of
worsening in-use conditions in the life cycle costs of building

Fig. 6. Cost-optimal energy renovation plan.

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Fig. 7. BAU energy renovation plan in a building with worsening in-use conditions.

Table 7 and energy renovation is the complexity of the service life estimation
Details of the BAU energy renovation plan for the building with worsening in- under changing in-use conditions. In the following example, the ap-
use conditions. plication of the proposed method in the implementation of the changes
Maintenance Renovation year EAC (SEK/m2, year) in the in-use conditions in the deterioration behaviour of building
interval (years) including energy components and so the life expectancy is demonstrated.
efficiency In the proposed method, the changes in the in-use conditions are
easily implemented in the deterioration behaviour by means of changes
Windows 11 37 66.5
Facade 15 37 23.5 in the size of time increments thus the life expectancy and the new life
Roof 15 45 29.5 expectancy range is incorporated in the calculation of the total re-
Fixed costs – – 31.0 novation costs using new maintenance intervals and frequencies.
Energy savings – – 6.0
Fig. 8 displays the simulated cost-optimal energy renovation plan
Total – – 144.5
for the given components under worsening in-use conditions. Com-
paring Fig. 8 with the cost-optimal energy renovation plan given in the
second scenario, Fig. 6, one can easily notice the effects of worsening
components. A proper inspection regime can help distinguish changes in-use conditions on both maintenance intervals and the renovation
in the in-use conditions early on in the service life of the corresponding years for the three components. Considering the faster deterioration of
components thus help eliminating the loss of value by changing the windows and facade in this case the estimated service lives are now
maintenance and renovation schedules. Table 7 presents the main- shorter and the total life cycle costs for the two components, Table 8,
tenance and energy renovation years as well as life cycle costs for the are higher than the cost-optimal plan under normal in-use conditions,
given energy renovation plan given in Fig. 7. In this example the total Table 6. The total cost is in this case at 126.5 SEK/m2, year is 12%
cost is calculated at 144.5 SEK/m2, year showing a 38% increase lower than the total cost in BAU plan under similar in-use conditions.
compared to the total costs in the scenario with normal in-use condi- Since maintenance is one of the in-use conditions affecting the de-
tions, Table 4. terioration behaviour of building components (Brandt & Wittchen,
The main reason behind the opportunistic approach to maintenance 1999), postponing and/or neglecting maintenance has similar

Fig. 8. Cost-optimal energy renovation plan in a building with worsening in-use conditions.

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Table 8
Details of the cost-optimal energy renovation plan for the building with wor-
sening in-use conditions.
Maintenance Renovation year EAC (SEK/m2, year)
interval including energy
efficiency
Windows 13 38 54.5
Facade 16 38 22.5
Roof 16 44 30.0
Fixed costs – – 25.5
Energy savings – – 6.0
Total – – 126.5
worsening effects on the deterioration behaviour and so the life cycle
costs of the building components. In the less-attractive markets, post-
poning/neglecting maintenance is considered as one of the common
approaches to lower budgetary pressure when there are budget con-
straints. The given example however, highlights the economic defi-
ciency of neglecting/postponing maintenance.
3.4. Sensitivity analysis
To evaluate the sensitivity of the results toward input values, the
energy efficiency input data has been changed up to ± 30 percent of the
given values in both tables 1 and 2. The discount rate has also been
changed from 5 to 7 percent. For all the possible combinations, changes
made to the input values did not affect the resulting maintenance and
energy renovation plans. The results of this analysis indicate the in-
sensitivity of the results towards changes in the energy investment costs
and the corresponding potential energy use reductions. Therefore,
considering the low costs of energy and relatively high life cycle costs of
building components, the model can be used to estimate the cost-op-
timal time for implementation of energy efficiency measures even when
the energy performance improvement data is very limited and un-
certain.
3.5. Summary
Considering that the aim of cost-optimal maintenance and renova-
tion planning is to not only optimize the service-life cycle costs of
building components but also maintain appropriate condition/perfor-
mance of the respective components, the model used in this study
prioritizes performance over costs which excludes late maintenance.
This limitation results in maintenance and energy renovation plans that
maintain acceptable working condition of the components thus pro-
viding better living standards for the tenants.
Using this model, it is shown that ignoring the value loss in the
economic evaluation of deep renovation results in an over-estimation of
the potential gained benefits. The cost-optimal maintenance/renova-
tion planning results indicate the importance of long-term energy re-
novation planning as actions taken toward the end of components’ life
expectancy not only limits the optimization opportunities but also re-
sults in below standard condition/performance levels for the respective
building components.
The 38% increase in energy renovation costs due to changes in the
in-use conditions (third scenario) signifies the importance of the in-use
conditions in techno-economic performance of building components.
Worsening of the in-use conditions results in shorter service life thus
higher chances of unexpected failure. These changes, as soon as re-
ported, should be stopped/fixed to avoid further loss of value. A proper
inspection regime not only provides an opportunity to detect changes in
the in-use conditions but also helps in better understanding of the de-
terioration behaviour of different building components.
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Sustainable Cities and Society 44 (2019) 715–725
4. Conclusions
The available maintenance/renovation budgeting and energy si-
mulation tools fail to include the effects of timing in the economic
evaluation of energy renovation projects (Brandt & Wittchen, 1999;
Caccavelli & Gugerli, 2002; Flourentzou, Genre et al., 2000; Flour-
entzou, Brandt et al., 2000). These tools target the profitability of en-
ergy efficiency investments using three different approaches. First, by
grouping measures into investment packages where low-cost measures
compensate for the higher costs of expensive energy efficiency mea-
sures. Second, by combining energy efficiency investments with the
anyway replacement costs of the respective building components. And
third, by combining the first two approaches (deep renovation) where
the majority of building components are renovated and an energy ef-
ficiency package is implemented at the same time. In neither of the
aforementioned approaches however, the effects of timing through a
complete service-life cost analysis is taken into account.
The systematic approach to maintenance/renovation planning pro-
posed by Farahani (2018) is therefore presented in this study with the
addition of energy performance improvements as an optimization cri-
terion to include the marginal investment costs of energy efficiency
measures and the reduction in operation costs through energy use re-
ductions in the economic evaluation of energy-renovation projects. The
optimization results illustrate the importance of timing and show great
savings potential in energy-renovation planning as opposed to the
conventional methods. It is shown that a cost-optimal maintenance/
renovation plan (second scenario) can result in savings up to 73% of the
total marginal energy efficiency investment costs.
Furthermore, in order to evaluate planning opportunities in existing
buildings, the effects of in-use conditions in the economic evaluation of
energy-renovation planning are as well taken into account. The results
show that changes in in-use conditions can potentially increase the total
service-life costs of maintenance/renovation plans (38% in the third
scenario) thus indicate the importance of a proper condition monitoring
plan.
Considering that the resulted savings in the total service-life costs
presented in this study are achieved through optimization of energy
renovation planning for only three components, scaling the analysis up
to building or portfolio level can potentially increase the estimated
savings and so help property managers to more reliably adjust main-
tenance and energy renovation plans based on budget constraints and
the market conditions/demands. Specially in less-attractive markets,
the reduced costs of building maintenance and energy performance
improvements can help maintaining the affordable rent levels for the
low-income tenants thus avoiding intensified segregation. On the other
hand, maintaining standard living condition can create better in-
centives for prospective tenants and so lowering the risks of vacancy in
the portfolio.
In the end it is given that the maintenance and energy renovation
planning model is quite insensitive towards changes in the investment
costs and the potential energy use reductions. Therefore, the resulting
cost-optimal energy renovation plans can be used even with uncertain
energy investment data. In order to produce more extensive results and
strengthen the effects of energy use reductions in maintenance and
renovation planning the addition of carbon-footprint as an optimization
criterion can be proposed for future studies.
Acknowledgment
This work was supported by the Swedish energy agency under Grant
[37578-2].
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