Assessment of Optimal Investment Alternatives for Energy Retrofitting Measures of an Institutional Building

Built environment in general is accountable for more than 40% of total global energy consumption. Although the amount of building’s contribution in energy demand supposedly should increase with growing number of population, yet in recent decade, adopting energy conservation measures all around the globe not only prevented the escalation of energy consumption but also reduced it to a certain level. In North Cyprus however, the share of building stock which statistically appeared to be a major participant in energy consumption, due to absence of energy efficiency legislation in both new construction as well as existing buildings is substantially high. This thesis demonstrated a quantitative approach using combination of thermal modeling, deterministic financial model, sensitivity and Monte Carlo analysis to evaluate technical and financial energy efficiency potential among variety of retrofitting measures by considering a spectrum of associated uncertainties, changes and risks among independent input variables within the entire predetermined investment horizon on public non-residential building. The main objective of this study through complete demonstration of energy efficiency investigation is to assist investors in decision making process as well as encouraging government authorities in promoting application of energy efficiency measures with supplementation of impellent legislation and incentives. The building department of civil engineering in Eastern Mediterranean University has been technically and financially evaluated to examine the financial attractiveness of proposed four alternatives retrofitting scenarios. Retrofitting scenarios were included roof insulation, replacement of single glazed typical windows in the building with double glazed low-e windows, installation of lux and lighting control devices and the last scenario considered as combination of all aforementioned scenarios. An advanced stimulation software tool namely, design builder is employed to quantify energy consumption of the case study as well as the impact of each retrofitting scenario on building energy demand reduction. The result from technical assessment of the building demonstrated scenario 4 as the optimal scenario in terms of energy conservation. Henceforth, the result from thermal modeling is fed into designed deterministic financial model using Excel software to project the financial merit of each retrofitting alternative. From deterministic financial appraisal of four existing scenarios it is concluded that scenario 2 generates highest net present value (NPV) and internal rate of return (IRR) and it is minimized the payback period of initial retrofitting investment. Finally, through the sensitivity analysis, critical variables have been identified and by conducting a Monte Carlo analysis using Cristal Ball for each critical variable within the specified time horizon the probability distribution of intended output criterion is demonstrated. At the end based on stochastic behavior of key input variable on financial model’s outcome the optimum alternative is selected. In conclusion after performing sensitivity and risk analysis on the financial model it has been justified that scenario 2 should be considered as optimal scenario among others. Keywords: Energy efficiency, Thermal modeling, Cost benefit analysis, Risk analysis