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Independent Consultancy Study on BCA Green Mark Schemes

A consultancy study was conducted to examine the robustness and cost effectiveness of the BCA Green Mark Schemes. The one-year study was done by Squire Mech Pte Ltd (jointly with RSP Architects Planners & Engineers (Pte) Ltd, Building System & Diagnostics Pte Ltd, Arcadis Singapore Pte Ltd). The study focused on the latest GM criteria for new buildings: GM Non-Residential Building 2015 (NRB: 2015), and GM Residential Building 2016 (RB: 2016).

One of the study deliverable is to conduct a Life Cycle Cost Analysis (LCCA) to assess the cost effectiveness of Green Mark versus non-Green Mark projects. Some of the areas that were examined included the green cost premium, payback period and lifecycle cost savings throughout the lifespan of the buildings.


Key Findings for Life Cycle Cost Analysis (LCCA)

The key findings are summarised below:

• Green Mark building reap net positive savings throughout its life cycle, with energy savings outweighing the upfront investment cost

• The Net Present Value of the savings stream commensurate with the Green Mark rating

• Strong business case for developers to adopt the highest Green Mark rating




Methodology for Life Cycle Cost Analysis (LCCA)

Sample size: 25 Non-Residential Buildings (NRB) and 15 Residential Buildings (RB) projects

Assumptions:

• Life cycle of the building is 30 years

• Cost includes a) Initial Capital Expenditure (Capex); b) Operating Expenditure (Opex); c) Maintenance Cost; d) Replacement Cost; e) Zero End-of-Life (Salvage) Value of equipments at the end of 30 years

• Escalation Rate of 1.5% p.a. to account for the anticipated annual change in price of goods/materials and services

• Net Present Value (NPV) method used to determine the current value of all future cash flows generated by the project over the 30-year period.

• To account for future cash flows for time value of money, the study adopts a discount rate of 5%, which is aligned with industry’s practice.


From the LCCA, the NPV savings calculated as follows:

NPV Savings = NPV of Baseline Building (life cycle cost of a non-Green Mark building)
– NPV of GM Building (life cycle cost of a Green Mark rating building)


As the NPV savings (i.e. in terms of total absolute costs) vary from project to project depending on the size, complexity, etc. of the projects, the NPV savings are then normalised by their respective project’s Gross Floor Area (GFA) so that the data are comparable across the various Green Mark rated projects.

NPV Savings per GFA = NPV Savings / GFA


More Information

The full report from the consultancy study will be made available in end Jan 2020.


Acknowledgement

Special thanks to the independent review consultancy study team:

Squire Mech Pte Ltd

Arcadis Singapore Pte Ltd

Building System & Diagnostics Pte Ltd

RSP Architects Planners & Engineers (Pte) Ltd