EFFECT4buildings project creates a versatile toolbox for assessing energy efficiency measures

Seven Baltic Sea Region countries are taking part in the EFFECT4buildings project. Lappeenranta participates in the project through the Environmental Office of Lappeenranta Region and the GreenReality services. Other partner countries involved in the project are Sweden (lead partner), Norway, Denmark, Poland, Estonia and Latvia. The project will result in a comprehensive set of calculation and assessment tools, which can be used for justifying energy efficiency measures in buildings and producing understandable visual data to support decision-making. As project partner, Lappeenranta plays an important role in the project. We are in charge of both financial profitability calculation tools and bundling tools.

Profitability assessment

Assessing the profitability of energy efficiency measures is challenging. Although easy to understand, the well-known payback time approach is not the best method for this. While people tend to think that a payback period of 10 years is too long, the measure could still be financially viable.

The payback period method does not take into account the returns generated by the project after the end of the payback period nor does it consider the changes in the price of energy or value of money. It is important to take these factors into account when comparing the economical profitability of different investments.

Indirect effects, which are not directly linked to economical aspects, should also be taken into consideration. These include better indoor air quality and the resulting long-term benefits, such as savings resulting from a reduced number of sick leaves.

To tackle the challenges described above, the city of Lappeenranta has created a financial calculation tool for the EFFECT4buildings project. This tool can be used to compare two different energy efficiency solutions and to gain a better understanding of the profitability of investments.
To compare the profitability of different solutions, the tool assesses the future development of energy and water prices by analysing two different annual price changes.
This tool can also be used to monitor the benefits of indirect effects and the impact of different solutions on CO2 emissions.

Figure 1. Calculation tool results

Use the calculator to see how much you can profit from converting from oil to another option!
Now is the best time to switch from oil heating to another heating system. The ELY Centre offers house owners the possibility to receive financial assistance amounting to either 2,500 euros or 4,000 euros. This is an excellent chance to switch to renewable heating.

Bundling

Another particularly useful tool is TotalTool. The method behind the tool is called Total Concept Method (TCM). It combines or “bundles” several smaller energy efficiency measures together into a bigger package. The overall profitability of the package can then be estimated using the internal rate of return (IRR). The building owner determines the minimum acceptable IRR for the package. In practice, the more profitable measures support the less profitable ones which, if assessed individually, would not meet the minimum value determined by the building owner. This way, a bigger package can be carried out instead of single measures. A larger and well-founded package is also better for securing financing.

TotalTool is available for download here: http://www.belok.se/totaltool_2_setup.exe

(Please note that downloading the tool may require approval from your IT organisation)

The complete toolbox and the related guidelines and training materials be available here: https://www.effect4buildings.se/

We hope that you will find use for these resources in the implementation of energy efficiency measures!