Sub-Title Regional Cost-Optimization Study of Progressively Improving Energy Efficiency

Towards Net Zero Houses

Phase One of a four-year project lead by Natural Resources Canada

Project Goal

•  The Regional Cost-Optimization Study of Progressively Improving Energy Efficiency Towards Net Zero Houses, is part of a (NRCan) four year initiative.

•  The project aim is to: •  Develop a framework and methodology to carry out regionally-

sensitive recommendations to reach certain milestone reductions (ERS 80, ERS 85, ERS 80 – 50%, ERS 80 – 75%, and 100% reduction)

•  Specify a series of recommendations for builders in the 35 Model National Energy Code of Canada for Houses (MNECH) zones.

Archetype Houses

•  Four archetype houses were used from plans commissioned by NRCan

Archetype Descriptions For GTA Region Study

Descrip(on   Liveable  Area  m²  (s.f.)  

Archetype  1   One  storey  with  full  basement        177  (1900)  

Archetype  2   Two  storey  with  full  basement  and  >  15%  window  area  

     325  (3500)  

Archetype  3   Two  storey  slab  on  grade        195  (2500)  

Archetype  4   Two  storey  end  row  house  with  full  basement        139  (1500)  

Baseline and Progressive Reductions

•  Each archetype is modelled for: Baseline (ERS 75 – OBC 2006); ERS 80; ERS 85; ERS 80 – 50%; ERS 80 – 75%; 100% reduction

•  The following information is presented for each progressive level of reductions for each archetype: •  Summary of energy reduction measures •  Reductions on fuel consumption •  Impact of increased insulation levels •  Impact of Alternate Energy Technologies (AET) and Renewable Energy

Technologies (RET) •  Impact of load management •  Cost optimization (10 and 20 years) - Projected Operating Costs with

Estimated Premium for Energy Reduction Measures •  Net Present Value

Fuel Rates

•  An average of current fuel rates was determined via an on-line survey of fuel and power providers in the GTA region, carried out in March 2009.

•  For illustrative planning purposes, the current rate was used to estimate fuel costs for years 1-5. For years 6-10 the initial rate was multiplied by 150% and for years 11-20, the years 6-10 rates were multiplied by 150%. Projected Fuel Rates

   

Years  1-­‐5   Years  6-­‐10   Years  11-­‐20  Electricity  kWh   0.085   0.128   0.191  

Natural  gas  m³   0.385   0.578   0.866  

Assemblies and Mechanicals

•  A variety of possible superinsulated and advanced wall assemblies are created and costed.

•  Current installed costs associated with various mechanical systems are also compiled.

Energy Modelling Tools

•  Hot 2000 (v.10.31) is used to model the reductions in energy use.

•  Drainwater heat recovery reductions is measured using the on-line calculator developed by Natural Resources Canada and hosted at www.ceati.com/calculator/.

•  To get to Net Zero (100 on the Energy Resource Station [ERS] scale), the modified ERS rating developed for the EQuilibrium Housing Initiative is used.

•  The performance and sizing parameters for the 6m2 collector solar hot water system and the PV systems associated with each house in various scenarios are based on RETScreen results for such a system in Toronto as modelled in the CMHC study Approaching Net Zero in Existing Houses.

Financial Valuation Methods

•  Accepted methods of analyzing return on investment (Net Present Value in this instance) assess the attractiveness of an investment against the baseline ERS 80.

•  Planning assumptions for cost of capital are included in the calculation of ROI (Net Present Value).

•  A high hurdle rate of 7% is used in order to generate conservative results.

Archetype 2 – 2 Storey w/Basement

Energy Reduction Measures

•  The space heating scenarios for this archetype changes delivery systems: •  The ERS 85 reduction scenario shows a 7 kW, COP 3 air-to-air heat

pump, increasing the electrical load, but, in conjunction with further envelope improvements, reduces the space heating energy use by 13%.

•  In the 75% and 100% reduction scenarios, a combination solar thermal system with a high-efficiency instantaneous water heater is modelled to handle both space and water heating.

Reductions in Fuel Consumption

•  Envelope improvements from ERS 80 to ERS 85 drop natural gas consumption for space heating by 70%.

•  The ERS 85 shows the change in electrical use where an air-to-air heat pump is modelled.

•  Where the heating system changes to a lower-efficiency air handler (75% reduction), there is a less impressive drop in the space heating fuel use. The electrical load increases due to ventilation and the lower efficiency air handler.

Reductions in Fuel Consumption

Reductions in Fuel Consumption

Code  2006     ERS  80   ERS  85     ERS  80  -­‐50%  

ERS  80  -­‐75%  

ERS  80-­‐100%  

Natural  gas  space  hea(ng  m³   2,843   1,795   473   745   372   372  

Natural  gas  DHW  hea(ng  m³   711   406   406   406   83   83  

Electric  space  hea(ng  kWh   1,392   893   6,005   1,074   1,049   0  

Electric  ven(la(on   233   545   776   914   914   0  

Electric  baseloads  kWh   8,761   8,761   8,761   8,761   8,761   0  

Impact of Increased Insulation Levels

•  Most significant is the reduction in space heating requirements over the first four scenarios (Code 2006, ERS 80, ERS 85, ERS 80 – 50%) as these relate directly to the envelope improvements.

•  Where solar thermal is brought into play (75% reduction scenario, column 5 next page), the DHW and space heating loads are so low as to allow for a cost-effective system to supply up to 50% of the space heating requirements and 90% of the DHW needs.

•  Where ventilation (red bar) is a fairly constant, small portion of overall energy use, the more space heating can be integrated into a ventilation scheme (as opposed to ventilation being integrated into a space-heating system), the less electrical energy will be required.

Impact of Increased Insulation Levels

Aggregate Reductions in Space Conditioning Energy Use, MJ

ERS 80-50%

ERS 85%

ERS 80%

2006 Code

140,000

120,000

100,000

80,000

40,000

20,000

0

60,000

ERS 80-75%

ERS 80-100%

DHW

Ventilation

Space Heating

Impact of Alternate Energy Technologies (AET) and Renewable Energy Technologies (RET)

•  The drainwater heat recovery unit can save up to 73 m3 of

natural gas annually (equivalent to 2774 MJ, assuming 1 m3 = 38MJ), even more when the load is dropped by 150L/day.

•  AET and RET measures are carried out only in the 75% and 100% reductions after all envelope improvements are carried out.

•  The 6.8 kWp PV system introduced in the 100% reduction scenario produces enough power annually to compensate for the energy used by the natural gas fired water heater that provides back up to the solar thermal combination space and water heating system.

Energy Reductions Through AET and RET

ERS  80  -­‐50%   ERS  80  -­‐75%   ERS  80  -­‐100%  

Design  heat  loss  Btu/hr   37,000   No  change   No  change  

Design  heat  loss  W   10,838   No  change   No  change  

Space  hea(ng  MJ   28,286   7,240   7,240  Ven(la(on  MJ   3,293   1,411   1,411  DHW  MJ   15,064   14,928   14,928  Baseload  MJ   31,536   31,536   13,140  Total  MJ   78,179   55,115   36,719  Total  MJ  PV  produc(on   36,000  

Target  reduc(on  from  ERS  80  

59,186   29,593   0  

Impact of Load Management

•  A 7kW air-to-air heat pump is modelled in the ERS 85 reduction scenario to see how much electricity use increases when the envelope is reasonably improved.

•  The amount of electricity required for space heating and ventilation increases to just over 6,000 kWh annually (about 16 kWh/day).

•  If the baseloads are dropped from 24 kWh/day to 10 kWh/day, this combination of envelope improvements and space heating system would only increase the electrical consumption by 2 kWh/day (730 kWh/year) over “typical” electrical consumption in a Canadian household of four.

Cost Optimization (10, 20 years) Projected Operating Costs with Estimated Premium for Energy Reduction Measures

2006  Code  

ERS  80   ERS  85   ERS  80  –  50%  

ERS  80  –  75%  

ERS  80  -­‐100%  

Difference  in  cost  from  ERS  80   $7,750   $17,170   $30,857   $83,757  

Current  annual  gas  &  electric  cost  

$2,133   $1,638   $1,477   $1,070   $944   -­‐$5,246  

Year  6:  fuel  cost  increase  1   $3,199   $2,458   $2,216   $1,605   $1,415   -­‐$5,230  

Year  11:  fuel  cost  increase  2   $4,799   $3,686   $3,324   $2,407   $2,123   -­‐$5,206  

Total  projected  opera(ng  costs  over  10  yrs  

$26,660   $20,480   $18,465   $13,375   $11,794   -­‐$52,380  

Total  projected  opera(ng  costs  over  20  yrs  

$74,650   $57,340   $51,705   $37,445   $33,022   -­‐$104,440  

Net Present Value

Assumptions Cost of capital 7% (a high hurdle rate in order to generate conservative results)

Initial investment in energy savings measures made at once at the beginning of Year 0 Consistent annual cash flows for Years 1…n

The best investment for 2 Storey is 50%. This illustrates the importance of archetype in

accessing best investment.

ERS  85   50%   75%   100%  

Year  0  from  baseline  

NPV  Year  20   Year  0  from  baseline  

NPV  Year  20   Year  0  from  baseline  

NPV  Year  20   Year  0  from  baseline  

NPV  Year  20  

1  Storey   -­‐10,359.94   -­‐6,473.23   -­‐15,893.09   -­‐7,662.99   -­‐29,683.69   -­‐18,533.49   -­‐71,383.69   -­‐4,818.43  

2  Storey   -­‐7,749.69   -­‐4,756.94   -­‐17,170.49   9,389.59   -­‐30,857.49   -­‐18,110.85   -­‐83,757.49   -­‐1,216.93  

2  Storey  SOG   -­‐6,692.43   -­‐5,853.76   -­‐13,424.99   2,845.35   -­‐25,259.75   -­‐19,215.57   -­‐74,059.75   -­‐4,371.04  

Row  end   -­‐7,411.94   -­‐2,861.27   -­‐9,703.08   1,968.37   -­‐22,335.56   -­‐16,713.64   -­‐63,935.56   12,457.08  

Some Key Findings

Improve Typical Assemblies First

•  The Ontario new home market is price/location driven first, and specification driven second (by consumers).

•  The production housing market in Ontario tends to deal poorly with dramatic changes.

•  Therefore… •  The most effective starting point is to improve typical assemblies

before looking at the use of different materials. •  Modifying typical wall assemblies allows production builders to

quickly and easily compare cost differences, as the original assembly is familiar and a revised assembly would be easy to benchmark within current costing databases.

Market and Labour Constraints

•  One way of reaching better air tightness goals is to use closed cell insulation in the stud cavities with a few inches sprayed on the attic side of the ceiling prior to loose fill being added. •  ICF foundations would also likely need to be implemented to achieve

NZE performance

•  However, in Southern Ontario, there are significant hurdles to overcome in order for production builders to bring down air leakage levels to achieve substantial reductions past ERS 80, including: •  Extreme price sensitivity of the market (housing as a commodity) •  Scheduling concerns •  Labour and union resistance to new construction methods

Major Shift in Focus Away from Space Heating

•  As the envelope improvements reduce the heating load, the relationships between the various end uses change in the house. Appliances and other internal gains, such as occupants and available passive solar gain begin to play a stronger role in the space heating regime.

Conventional Envelope, 4 to 5 ACH

Plug Loads28%

Space (inc fans/pumps)

46%

Water24%

Ventilation2%

Superinsulated envelope 1 ACH

Plug Loads45%

Space (inc fans/pumps)

30%

Water17%

Ventilation8%

Preparation for Solar & PV Makes Sense

•  Solar ready features (preplumbing, prewiring) are achievable in cost-effective manners and also provide marketing opportunities.

•  Current costs for renewables, such as PV, are not in line with production builder pricing at this point, but preparation for these items makes sense as building envelope improvements are made.

ROI Analysis

•  The ROI analysis calculated Net Present Value (NPV) for all archetypes for all scenarios compared to the ERS 80 baseline.

•  The findings indicate the importance of the house type in determining the best investment in energy savings. •  For example, current costs for materials, labour and fuel (as well as

Ontario’s premium on green power production) show that the 50% reduction scenario is the best option for both Archetypes 2 and 3 (2 storey with basement and 2 storey slab on grade, respectively)

•  While the 100% reduction scenario is the best option for Archetypes 1 and 4.

Constraints Posed by Common Building Practices

•  The parameters required by the GTA builders who participated in the study required that, out of several proposed options, the most expensive wall assembly be used – a 2x6 assembly with 25mm (1”) rigid foam to the exterior and the stud cavity filled with a high-density closed cell foam (RSI 0.041/R-6 per unit thickness).

•  With better market penetration, the cost of the closed cell foams (or other, lower cost materials with equivalent high insulation and good air sealing qualities) could drop, making this type of wall assembly more cost effective.

•  Where material costs can be reduced, the ROI analysis would change dramatically.

Future Directions

•  Additional analysis carried out in other zones as part of The Regional Cost-Optimization Study of Progressively Improving Energy Efficiency Towards Net Zero Houses will assess the impact of zone on cost optimization and return on investment.

•  Future research may include sensitivity analysis and stochastic modelling for variables such as cost of capital and fuel costs to provide a more robust analysis of ROI.