D8.2 ANALYSIS OF THE BUSINESS CASE FOR THE APPLICATION … PLUS_D8.2.pdf · D 8.2 Analysis of the...
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Achieving near Zero and Positive Energy Settlements in Europe using
Advanced Energy Technology H2020 - 678407
D8.2 ANALYSIS OF THE BUSINESS
CASE FOR THE APPLICATION OF THE
TECHNOLOGIES AND PROCESSES
DEVELOPED IN THE PROJECT
Authors: Luciano Pana Tronca, Morna Isaac (E Co.)
Contributing authors: Marion Denantes, Grant Ballard-Tremeer (E Co.)
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Deliverable nature: Report
Dissemination level: Public
Contractual delivery date: May 2017
Delivery date: June 2017
Version: 1.1
Number of pages: 110
Keywords: Business case, NZEB, attractiveness and achievability
Lead beneficiary 12 - ECO
Participating beneficiaries: 1 – UoA 2 – TUM 3 – BGU
4 – UNIPG 5 – OBU 6 – CYI 7 – TUC 8 – ABB
9 – ANERDGY 10 – FIBRAN 11 – ARCA 12 – ECO
13 – OPAC38 14 – VASSILIOU 15 – CONTEDIL
16 - JRHT
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History of changes
Version Date Change Page
1.0 19.05.2017
1.1 14.06.2017 Formatting and layout changes All
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Executive Summary
This report is the deliverable of Task 8.2 of the ZERO-PLUS Project, titled “Analysis of the
business case for the application of the technologies and processes developed in the project”.
The aim of Work Package 8 is to contribute to accelerating the take-up of Near Zero Energy
Buildings (NZEBs) and their systems in the market by developing a model for business growth.
The business case analysis in the present report is the second stage of support to companies
planning to exploit the project’s outputs to expand their participation in this market, following
the first stage in which a market analysis was performed.
In this report a business case is developed following the steps shown in the figure below:
The outcome of this analysis is a comparison of costs, benefits, risks and deliverability of
selected options.
A business case for a settlement that meets the three ZERO-PLUS performance criteria of
reduced energy consumption, increase in renewable energy production and reduced initial
cost was developed. These criteria are achieved through the use of the ZERO-PLUS
approach, which employs an integrated and iterative design process as shown in the following
figure:
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A number of options for the business case were initially identified and a preliminary
assessment made of the chief characteristics of these options. Based on an estimate of the fit
of each option with the nature of the ZERO-PLUS project, the case for change and the
strategic landscape, four options were selected for further analysis:
Option Name
Description Selected for further analysis
Research unit on energy efficiency in settlements
Involving researchers from the areas of architecture, engineering and environmental design, this unit would investigate how to improve construction processes and how to overcome barriers resulting from the fragmentation of the construction value chain. The unit would focus on applied research with the intention of generating results that could be used to create improved policies relating to sustainable construction.
Settlement Efficiency Standard
This standard could look specifically at settlement level integration of energy production and use. Over time it could evolve into a more comprehensive standard, including other sustainability features.
Joint Venture
To form an independent company between some or all of the members of the consortium, to provide services for different stages in the construction process. It can be one single organisation with different services or various agreements with smaller organisations with specified niche markets.
European Innovation
To develop an organisation that supports innovation in the construction industry by lobbying and networking between
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Option Name
Description Selected for further analysis
Agency for Construction
companies in the sector. The Agency could have as one of its aims to facilitate funding for innovation by SMEs. An example of a similar agency is Innovate UK.
ZERO-PLUS Forum or Fair
A space where supply and demand for innovative technology for the construction of settlements meet, similar to existing events of this nature.
Settlement Passport
Similar to a building passport but distinct from a certificate of sustainable performance of a building such as LEED or BREEAM certificates). Such a passport would facilitate communication between owner, investor, maintenance professionals and tenants.
ZERO-PLUS Contract Template
Develop a contract template for construction developers that can resolve the split incentives problem by engaging the buyer or tenant in a long term obligation to pay for energy efficiency measures.
ZERO-PLUS Toolkit
Create a ZERO-PLUS Toolkit for developers that want to achieve the three ZERO-PLUS objectives in a construction project.
In the option analysis we looked at the benefits, costs, risks and deliverability (implementation
time) of each of the four selected options. The results of this analysis are summarized in the
following figure, in which for each of the four aspects analysed a greater distance from the
center means a more desirable result. The figure illustrates that while the benefits of the
Settlement Efficiency Standard are potentially the greatest, overall the toolkit comes out best.
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Benefits (farther fromcenter - higher benefits)
Costs (farther from center- lower costs)
Risks (farther from center- lower risks)
Deliverability (fartherfrom center - shorter
delivery time)
Settlement Efficiency Standard Joint Venture Settlement Passport Toolkit
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Table of Contents
EXECUTIVE SUMMARY ............................................................................................................ 5
TABLE OF CONTENTS ............................................................................................................ 9
LIST OF FIGURES................................................................................................................... 12
LIST OF TABLES .................................................................................................................... 13
LIST OF ACRONYMS .............................................................................................................. 14
1. INTRODUCTION .................................................................................................................. 15
2. METHODOLOGY FOR THE BUSINESS CASE IN THE ZERO-PLUS PROJECT ............................. 17
2.1 Definition and purpose of a business case ......................................................................................... 17
2.2 Steps in the development of a business case ..................................................................................... 19
2.2.1 Task definition ...................................................................................................................................... 20
2.2.2 Options identification .......................................................................................................................... 25
2.2.3 Options analysis ................................................................................................................................... 25
3. TASK DEFINITION: THE NATURE OF THE PROJECT .............................................................. 27
3.1 The ZERO-PLUS concept ..................................................................................................................... 27
3.2 ZERO-PLUS and the design and construction process ......................................................................... 34
3.3 Key Performance Indicators ............................................................................................................... 37
3.3.1 KPIs for the construction sector: project level. .................................................................................... 37
3.3.2 KPIs for the construction sector: company level ................................................................................. 39
3.3.3 KPIs for the construction sector: environmental impact ..................................................................... 40
3.3.4 KPIs assessing innovation ..................................................................................................................... 40
3.3.5 KPIs for procurement activities ............................................................................................................ 41
3.3.6 Example of KPI matrix in a Sustainable Building Standard................................................................... 42
3.4 Business cases developed in other EU Research Projects ................................................................... 42
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4. TASK DEFINITION: BUILDING THE CASE FOR CHANGE ........................................................ 44
4.1 Barriers and suggested approaches to remove them ......................................................................... 44
4.2 Drivers, Benefits and Constraints ....................................................................................................... 45
4.2.1 Drivers .................................................................................................................................................. 45
4.2.2 Benefits ................................................................................................................................................ 46
4.2.3 Constraints ........................................................................................................................................... 50
5. TASK DEFINITION: STRATEGIC LANDSCAPE OF ZERO-PLUS ................................................. 54
5.1 Stakeholder analysis .......................................................................................................................... 54
5.2 Competitors ....................................................................................................................................... 62
6. DEVELOPING THE BUSINESS CASE: OPTION IDENTIFICATION ............................................. 65
7. DEVELOPING THE BUSINESS CASE: OPTION ANALYSIS........................................................ 71
7.1 Benefits ............................................................................................................................................. 71
7.2 Costs .................................................................................................................................................. 75
7.2.1 Methodology and prior considerations ............................................................................................... 75
7.2.2 Conclusion of the cost analysis ............................................................................................................ 80
7.3 Risks .................................................................................................................................................. 80
7.3.1 Risk Profiles .......................................................................................................................................... 82
7.3.2 Conclusion ............................................................................................................................................ 84
7.4 Deliverability ..................................................................................................................................... 84
7.4.1 Implementation plan profiles .............................................................................................................. 87
8. OPTION ANALYSIS: ATTRACTIVENESS AND ACHIEVABILITY ................................................. 89
8.1 Attractiveness and Achievability Indexes ........................................................................................... 90
8.2 Attractiveness .................................................................................................................................... 91
8.3 Achievability ...................................................................................................................................... 92
9. CONCLUSION: COMPARISON OF THE OPTIONS .................................................................. 93
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10. REFERENCES ................................................................................................................... 95
ANNEX I EU HORIZON 2020 PROJECTS ............................................................................ 96
IDEAS ............................................................................................................................................................ 96
INTREPID ...................................................................................................................................................... 97
ORIGIN .......................................................................................................................................................... 99
ANNEX II SURVEY ................................................................................................................ 102
ANNEX III RISK TABLES ...................................................................................................... 106
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List of figures
Figure 1 Methodological approach for the development of a Business Case. Source: (Gambles,
2009). .................................................................................................................................................... 19
Figure 2 Attractiveness-Achievability chart. (Source: Gambles, 2009). ............................................... 26
Figure 3 Strategies and goals of the ZERO-PLUS project. .................................................................. 29
Figure 4 A conventional design and construction process. .................................................................. 32
Figure 5 ZERO-PLUS approach to construction. .................................................................................. 33
Figure 6 Key project stages. Source: (Constructing Excellence). ......................................................... 39
Figure 7 Top 6 Benefits for Technology Providers according to the survey responses. ...................... 47
Figure 8 Top 6 Benefits for Case Study Partners according to the survey responses. ........................ 47
Figure 9 Top 6 Benefits for Research Institutions according to the survey responses......................... 48
Figure 10 Average, maximum and minimum rating for the importance of benefits according to the
survey responses. ................................................................................................................................. 49
Figure 11 Top 5 Constraints for Case Study Partners. ......................................................................... 51
Figure 12 Top 5 Constraints for Research Institutions. ........................................................................ 51
Figure 13 Top 5 Constraints for Technology Providers. ....................................................................... 52
Figure 14 Average, maximum and minimum rating for the importance of constraints according to the
survey responses .................................................................................................................................. 53
Figure 15 Stakeholders importance/influence diagram ........................................................................ 62
Figure 16 Outputs and benefits Map ..................................................................................................... 73
Figure 17 Implementation timetable ...................................................................................................... 87
Figure 18 Option Analysis summary ..................................................................................................... 90
Figure 19 Attractiveness of the options for the Zero Plus BC. .............................................................. 91
Figure 20 Achievability graph ................................................................................................................ 92
Figure 21 Achievability & Attractiveness Graph. ................................................................................... 93
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List of tables
Table 1 The difference between a business case and a business plan (source: Gambles, 2009). ..... 17
Table 2 Comparative stages in the construction process. .................................................................... 34
Table 3 Barriers identified by ZERO-PLUS partners to the construction of NZEBs and NZESs and
suggested approaches to mitigate these barriers. ................................................................................ 44
Table 4 Strategic landscape. ................................................................................................................ 54
Table 5 Four Suggested options for the business case ........................................................................ 66
Table 6 Benefits and Outputs weighting ............................................................................................... 74
Table 7 Outputs score ........................................................................................................................... 74
Table 8 Option scoring .......................................................................................................................... 75
Table 9 Cost analysis of the selected options....................................................................................... 78
Table 10 Risks areas. Source: (Gambles, 2009) .................................................................................. 80
Table 11 Option analysis summary ....................................................................................................... 89
Table 12 Risk analysis for the Toolkit ................................................................................................. 106
Table 13 Risk analysis for the Settlement Efficiency Standard .......................................................... 107
Table 14 Risk analysis for the Settlement Passport ........................................................................... 108
Table 15 Risk analysis for the Joint Venture ....................................................................................... 109
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List of acronyms
NZEB Near Zero Energy Building
NZES Net Zero Energy Settlement BC Business Case BP Business Plan EU European Union A&A Attractiveness and Achievability KPI Key Performance Indicator AU Available to Use CI Commit to Invest AC Actual Cost TCI Total Cost at Commit to Invest DCC Duration of Design at Commit to Construct DCI Planned Time for Design at Commit to Invest CAU Construction time at Available to Use CCC Expected Construction time at Commit to Construct CO2 Carbon IEC Integrated Energy Contract ROI Return On Investment EPNSP Energy Positive Neighbourhood Service Provider HAN Home Area Network IoT Internet of Things
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1. Introduction
The present report is the output of a project Task on the “Analysis of the business case for the
application of the technologies and processes developed in the project”.
First, we define the methodology for the business case. This includes the definition and
purpose of a business case and the differentiation between the concepts of business case
and business model. Then, we define the steps the business case follows. In the current
business case, E Co. acts as the business case author, while the ZERO-PLUS consortium is
the business case owner.
The following 3 chapters discuss the task definition, starting with a general analysis of the
context and ending with the identification of options for the business case.
In Chapter 3 “Task Definition: The Nature of The Project”, we describe the ZERO-PLUS
concept, as a value proposition for end-users of the technologies and processes to be
developed. We explain the reason for the business case. We also compare the ZERO-PLUS
approach in construction to the traditional construction stages, which can be considered state
of the art for the construction of a settlement. To further develop the understanding of the
nature of the project, we analyse 3 Horizon 2020 Projects’ business cases, as well as key
performance indicators for construction management, innovation and procurement in
the construction industry.
In Chapter 4 “Task Definition: Building the Case for Change”, we analyse the need for change
in energy efficiency in the construction sector. For that, we analyse the barriers to market
penetration described in our previous report, D8.1 Market Analysis of Current Trends in the
Construction of Residential Highly Energy Performing Buildings, and propose approaches
to remove them. We also look at drivers for change, the benefits the project wants to achieve
and the constraints this business case faces. This chapter includes the results from a survey
distributed among the project participants.
In the next chapter, we conclude the Task Definition series with the “Strategic Landscape of
ZERO-PLUS”. This chapter contains a stakeholders’ analysis of the project participants and
other actors in the construction industry. This chapter also includes the outcomes from a
workshop in which the project partners identified the main technologies and processes
used by competitors.
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In Chapter 6 we identify eight business case options for the ZERO-PLUS concept and describe
them. Based on the task definition information, we then select four options for a more
comprehensive analysis.
The option analysis in Chapter 7 is based on the benefits, costs, risks and deliverability of
each option. The analysis is based on five benefits that the ZERO-PLUS business case could
achieve. The cost assessment includes a general overview of the main costs that each option
would incur for its implementation. We identify risk areas and develop risk profiles for each
option, as well as risk mitigation actions to bring the risk scores down. For deliverability, we
choose nine business development activities for each option and estimate the time in
semesters required for these activities until 2022.
In the final chapter, we discuss the analysis in terms of attractiveness (benefits/costs) and
achievability (risk/deliverability), and give alternatives and recommendations to support the
business case owner in choosing an option for the exploitation of the ZERO-PLUS project.
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2. Methodology for the Business Case in the ZERO-PLUS project
2.1 Definition and purpose of a business case
A business case (BC) is a document that is intended to enable and convince a decision maker
to make the right decision. The BC analyses the different opportunities and choices, and the
benefits, costs and risks of an action compared to realistic alternatives, and explains how the
option can best be implemented (Gambles, 2009).
The outcomes of the BC will be a comparative analysis of costs, benefits, and risks of the
different options and the formulation of a recommendation for the decision maker to approve
a specific action for an organisation.
The decision makers are the ultimate owners of the choice between the alternatives provided
by the BC authors.
In contrast to the BC, a business plan (BP) is related to the objectives of the organisation. It is
based on the business model and uses a structure that was determined in prior decisions.
Table 1 summarizes the difference between BC and BP.
Table 1 The difference between a business case and a business plan (source: Gambles, 2009).
A Business Case... A Business Plan...
Is organized
around...
A single action or single decision
and its alternatives.
An organization or the whole enterprise.
The plan may cover a single product or
product line or the whole organization.
Predicts... Cash flow results and important
non-financial impacts that follow
from the action.
Business performance of the
organization, especially in the main
categories of the income statement.
May include projected pro-forma income
statements or balance sheets for future
years.
Focuses on... Business objectives for the action. Business objectives for the
organization.
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A Business Case... A Business Plan...
Is based on ... A cost model and a benefits
rationale, designed for the case and
applied to one or more action
scenarios.
The business model for the
organization (showing where and how
the company makes money, similar to
income statement), as well as expected
trends, competitor actions, etc.
Measures... Financial metrics such as Return on
Investment, or payback period,
based on projected cash flow. Also,
includes important non-financial
impacts.
Business performance in terms such as
sales, margins, profits, and business
"health" by contributions to important
balance sheet categories
In a non-profit or
government
organization...
The scope of the case may include
benefits and costs to the population
served as well as the organization
itself.
May focus on funding needs, budgetary
requirements, and ability to operate
within a budget.
As stated above, the main purpose of the BC is to choose an option from the ones identified.
This option is the course of action to be taken and converted into a project. The BC should:
Enable the right decision based on a comparative analysis of costs, benefits, and risks
of the choices.
Meet compliance requirements (external such as EU regulations or internal such as
governance processes of the organisation)
Identify funding and recommend funds to commit to the recommended option.
Identify and engage with stakeholders to understand their perspectives.
Include an outline implementation plan as well as a risk map.
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Figure 1 Methodological approach for the development of a Business Case. Source: (Gambles, 2009).
2.2 Steps in the development of a business case
In this section, we present a methodology that can be used to develop a BC. As illustrated in
Figure 1, this methodology has four main steps:
1. Task definition: answers the question of what the project aims for.
2. Option identification: several options will be outlined and briefly explained, after
analysing the drivers and barriers of the project.
3. Option analysis: out of the options identified, a few will be selected and analysed in
more depth.
4. Recommendation: the final goal is to recommend the option which would fit best with
the nature of the project and the outcomes the stakeholders are expecting. This is
based on the goals, drivers, barriers and variables taken into account in the
development of the BC.
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2.2.1 Task definition
As seen in Figure 1, the first step for developing a BC is to define the task and answer the
question: what is the BC for?
The task definition includes:
A. The definition of the nature of the project, in our case the ZERO-PLUS project: refers to the question of what the project is about. Based on the characteristics of the project we can infer the needs that need to be solved by the BC.
B. Building the case for change: analysis of drivers and constraints of the project that would limit the availability of the options. The question to be answered is: why should the project be done?
C. The strategic landscape: relates to the context in which the project exists. Who are the stakeholders and how can their drivers for cooperation influence the outcome of the BC?
In the following pages, we describe this methodology in more detail and discuss how we can
apply it to the development of a BC for the exploitation of the technologies and processes
developed in the ZERO-PLUS project.
A. Task definition: The definition of the nature of the ZERO-PLUS project
The ZERO-PLUS project can be defined as a research project that includes a demonstration
of the construction of buildings in different case studies. The project is complex, with a variety
of stakeholders with different objectives. The business case for ZERO-PLUS involves a
settlement that meets the three ZERO-PLUS performance criteria: reduced energy
consumption, increase in renewable energy production and reduced initial cost.
Previous EU-funded projects in related areas (IDEAS, Intrepid and ORIGIN; descriptions
found in Annex I of this document) focused on value creation at a particular point in the
process. In contrast to this, ZERO-PLUS considers the entire construction process and all
aspects where value is created. Therefore, ZERO-PLUS tries to integrate construction, which
will ultimately impact particular markets and products. ZERO-PLUS is not only about the
construction of a settlement, it's about how the construction of a net zero energy settlement
will satisfy the needs of the stakeholders.
Section 3 of this report describes the nature of the project for ZERO-PLUS in detail.
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B. Task definition: Building the case for change
The aim of this phase is to analyse the drivers, constraints and barriers. Drivers are factors
that cause a particular phenomenon to happen or develop (Oxford Dictonaries, 2017). The
drivers are important as they will, later on, be used to understand the benefits the project wants
to achieve. The drivers will be closely related to the barriers identified and the approaches to
mitigate those barriers.
It is also important to analyze the constraints, which are “factors which limit the range of viable
options which can be put forward in the business case” (Gambles, 2009). The constraints will
provide the boundaries of the viable options.
The following is a categorisation of typical constraints faced by businesses:
The size of the market. The extent of the market determines a businesses’ ability to
make sales. You can't make sales if there are no customers out there.
The nature of demand in the market. It is important to identify the nature of your
customers and their requirements through detailed market research.
The availability of supply. A business often depends on supplies. For example, clothes
retailing business needs to acquire garments, in the appropriate quantities, prices and
at the right times.
The nature of the competition. The strength of the competition is a key constraint to
business success. Businesses need to position themselves in such a way as to limit
the effect of the competition.
The availability of finance. Businesses need to have the right quantities of finance at
the right times to match their needs. Liquidity and cash flow are thus very important.
The quality and skills of employees. The human resource is one of the most important
resources of any organisation. It is essential to have the right number of people with
the appropriate skills to enable the business to achieve its business objectives.
The quality of direction and management. Directors and managers of a business need
to have the right skills and abilities e.g. to create well-structured plans, and to motivate
and lead other members of the organisation.” (Business Case Studies, 2017).
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Marketplace constraint. A company may have worked through all of its constraint
issues, in which case obtaining more orders from the market is considered the
constraint.
Paradigm constraint. When employees hold a belief that causes them to act in a certain
way, this is called a paradigm constraint, and can impact a process to such an extent
that the belief is considered a constraint.
Physical constraint. A machine that has a large amount of work-in-process in queue in
front of it is obviously maxed out, and so could be a constraint.
Policy constraint. This is a management-imposed guideline for how a process is to be
conducted. For example, there may be a rule regarding the economic order quantity to
be ordered from a supplier. Unless carefully monitored, these policy constraints can
interfere with the orderly flow of work through a business. Policy constraints are difficult
to find, since you must track backwards to them by observing their effects on the
business. It may be equally difficult to eliminate such a constraint, since it may have
been used by employees for many years (Accounting tools, 2017)”.
The case for change identified in ZERO-PLUS is presented in Section 4.
C. Task definition: Strategic landscape
To identify the options that will be acceptable for the decision makers it is important to
understand the context of prior decisions and competing stakeholder interests at the task-
definition stage.
This step of the task definition needs to answer the following questions:
Who are the stakeholders? And what are the benefits they want to achieve? What are
the constraints?
What are the strategies of the stakeholders? This can be mapped through the KPIs of
the project, to understand how the decision-making process is done.
Who is ordering the BC?
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Who will make the final decision on the action to be taken?
Once the task definition stage is completed, we can assess whether stakeholders have the
power to decide on and commit to an action that will bring the expected benefits. No BC can
be developed for stakeholders that don’t have the right to make the decisions and the power
to commit to an action.
Stakeholder analysis
Stakeholders can be defined as “individuals or organisations that are affected by a project or
that have an effect on a project” (Ballard-Tremeer, 2016) or “individuals, groups of people,
institutions or firms that may have a significant interest in the success or failure or a project”
(European Commission, 2004). Stakeholders’ influence over a project can be positive or
negative, and may be direct or indirect. The basic assumption behind stakeholder analysis is
that different actors have different interests. Different stakeholder interests need to be
understood and recognised to obtain a better problem identification, clear objectives and
proper strategies to address them.
Stakeholder analysis involves identifying stakeholders and then exploring how we should and
can work with them. For example, in ZERO-PLUS, the case study partners might want to
reduce construction costs and improve energy efficiency, thus allowing them to reduce costs
for customers while increasing sales. For technology innovators, the research project will
allow the technology to complete the readiness level scale, as well as providing a case to
show to potential buyers. Then, innovators can start marketing their products. For universities,
research is related to their core competence of creating applied knowledge. For the European
Commission, who provided the funds for the project, ZERO-PLUS will contribute to compliance
with its own policies on innovation and energy efficiency in construction.
In a stakeholder analysis, the following information should be collected about each
stakeholder:
Name
Association with the project:
o Internal: people and departments within the organisation, in this case the ZERO-
PLUS partners There is interdependence between the work these partners do.
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o External: people and organisations outside our organisation or project. They
may be customers, clients, suppliers and other key individuals or organisations
who take an interest in or are affected by ZERO-PLUS (Rawlins, 2006).
Type:
o Public: Organisations or actors that come from the public sector. They provide
public services or goods.
o Private: organisations or actors that operate with a profit framework or market
oriented.
o Public-Private: organisations that have both types of actors or mixed objectives.
Interests and how is the stakeholder affected by the problem the project wants to
address
Capacity and motivation of the stakeholder to bring about change
Possible actions to address the interests of this stakeholder
Influence/Importance:
o Influence: the power that stakeholders have over a project - to control what
decisions are made, facilitate implementation, or exert influence that affects the
project positively or negatively. It is the extent to which the stakeholder is able
to persuade or coerce others into making decisions, and following a certain
course of action.
o Importance: the extent to which stakeholder's needs and interest will be
influenced by the planned project. In other words, this is about how important
or essential is it that certain stakeholders are involved. Stakeholders may be
important because their involvement will lead to successful outcomes, or
stakeholders may be important because their involvement may lead to failure
(Ballard-Tremeer, 2016).
Section 5 of this report describes the strategic landscape for the ZERO-PLUS project in detail.
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2.2.2 Options identification
A major part of the business case is to identify the options for the business case and compare
them, in order to provide the information needed by the business case owner to make a
decision.
The following questions provide a framework within which possible options can be identified
and compared:
What: within the agreed framework or task definition, are there different options for
what the project is going to deliver?
Where: Is location one of the constraints or are there options?
Who: Who is going to deliver the project or the service?
How: How should the objectives be achieved?
A review of the initial list of options identified is conducted in order to choose a limited number
of options for which a fuller analysis will be conducted in preparation for the final choice of an
option with which to proceed.
The options identified for the ZERO-PLUS business case are presented in Section 6 of this
report.
2.2.3 Options analysis
Once a shortlist of the most promising options has been selected, their attractiveness (benefits
vs. cost) and their achievability (deliverability vs. risk) is analysed:
Attractiveness:
o Benefits: the positive outcomes that decision makers want. They are related to the case for change and the drivers.
o Costs: To identify the cost look at costs, savings and revenue streams: IT, staff, procurement, estate, project management, training, and contingency. Also relevant are tax, inflation, overseas transactions, and overheads.
Achievability:
o Deliverability: Includes a timeline for decision makers to know when the project will deliver and benefits be realised.
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o Risks: In this context, the purpose of assessing risks is not to manage them, but to factor them into the assessment of achievability. Risks are related to each option, and not to the benefits.
The result of this analysis can then be presented in a diagram (see Figure 2).
Figure 2 Attractiveness-Achievability chart. (Source: Gambles, 2009).
Options are placed on the chart by measuring attractiveness on the y-axis and their
achievability on the x-axis to give each option a unique set of coordinates. In the example from
Figure 2, option A was seen as the most attractive, while option D was seen as more
achievable. Options B and C would be discarded as they are below the attractiveness-
achievability frontier, which means neither of those reach the maximum level of efficiency, or
at least the levels options A and D have.
The attractiveness-achievability frontier is an efficiency frontier, which means that there is a
set of optimal portfolios that offers the highest expected return for a defined level of risk, or
the lowest risk for a given level of expected return (Investopedia, 2017). Options with high
benefits and lower costs will be higher in the chart, while options with quicker implementation
plans and lower risks will be on the right.
The option analysis for the ZERO-PLUS business case is presented in Section 7 of this report.
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3. Task definition: the nature of the project
ZERO-PLUS is part of an age of innovation in the construction industry, which is being driven
by the need to reduce energy consumption and emissions, and the resulting changes in public
policy.
The ZERO-PLUS concept is a design and construction management approach for the
construction of Net Zero Energy Settlements.
3.1 The ZERO-PLUS concept
The principle: the ZERO-PLUS concept uses collaboration between stakeholders to work at
the settlement level.
ZERO-PLUS is a collaborative approach to the design and construction of settlements,
involving technology suppliers, energy efficiency and renewable energy experts and
developers who work together from the earliest stages of project conception. The benefits of
settlement level planning of energy use that involves all stakeholders can include a higher
potential for renewable energy production, a reduction in energy consumption and cost
reduction of the measures required to achieve this. Achievement of these goals is ensured by
consistent collaboration between stakeholders, from the planning stage through to use of the
buildings.
The benefits of the analysis at the settlement level arise not only from the larger scale
compared to single buildings, but also, importantly, from looking at a system of houses with
their interactions. This means, for instance, cost reduction through the deployment of
renewable energy technologies at the settlement level instead of individually in each building.
The ZERO-PLUS approach means more opportunities in planning the entire settlement to
achieve energy saving goals. For example, to improve the microclimate and use systems such
as smart street lighting is only the start. The concept can expand to aspects such as efficient
water systems, electric mobility, etc.
Performance goals
The ZERO-PLUS concept includes three main performance goals:
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1. Operational energy usage in residential buildings in a ZERO-PLUS settlement is reduced
to an average of 0-20 kWh/m2 per year, compared with the current average of 70-230 kWh/m2
energy per year.
2. The settlement generates a minimum of 50 kWh/m2 of renewable energy per year. This is
possible through the integration in the settlement of innovative energy production
technologies.
3. The cost of NZE settlements is reduced by at least 16%, compared with current costs.
Strategies
The ZERO-PLUS concept covers the whole life of the settlement, from the design-planning
interface to the monitoring of performance, and is intended to accommodate continuous
improvement of the technologies and processes that reduce energy use, generate renewable
energy and reduce costs. As illustrated in Figure 3, the ZERO-PLUS concept uses three
strategies to achieve the performance goals:
Increasing the efficiency of the components that provide energy conservation and
energy generation in the settlement: Innovative technologies are developed and
applied to increase the efficiency of components providing energy conservation and
energy production in the NZE buildings and districts. This reduces costs, by allowing,
for example, less material and space to be used for these purposes.
Reducing the "balance of system" costs through efficient production and installation
processes: These costs encompass all the components other than those directly
providing energy conservation and generation, such as components for the storage,
distribution and management of the energy.
Reducing operational costs through better management of the loads and resources,
made possible by operating at a district scale rather than at the scale of a single
building. Operational costs are reduced through the optimal management of dynamic
energy loads and resources at the building and district level. This is done by using
innovative energy management technologies for the entire settlement.
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Figure 3 Strategies and goals of the ZERO-PLUS project.
Implementation
ZERO-PLUS settlements exceed the state of the art by setting performance objectives
requiring improvement relative to other energy efficient buildings. During the design of the
settlement, the energy production and the energy use for heating, cooling and lighting
(regulated energy) are estimated using advanced simulation techniques. The information from
the simulation results is used to optimize the technological innovations that are integrated in
the settlements.
The main components of the ZERO-PLUS approach can be summarized as follows:
1. Initial integrated design: Energy and initial cost analysis contribute to integrated design
of the settlement. A comparison of initial costs of the technologies used in the ZERO-
PLUS settlements with that of a reference building with the same energy and
environmental performance determines that the initial cost of the ZERO-PLUS building
is lower1.
2. Integrated optimization:
1 The cost reduction is calculated in comparison to a Zero Energy Reference building that has the
same energy and environmental performance but does not benefit from: energy reduction from advanced building envelope components; energy reduction from the use of advanced energy management systems; and energy production by settlement RES.
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2.1. Design, optimisation and integration at the building level: the energy and financial
performance of the settlement design is ensured through an iterative optimisation
process. A life-cycle cost analysis (LCCA) is used to determine the life cycle costs
of the innovative energy and environmental systems and techniques used in the
ZERO-PLUS settlement. The technological innovations used are optimised
according to the LCCA and energy requirements.
2.2. Settlement level optimisation: at the settlement level, renewable energy production
technology as well as settlement servicing technology (such as public lighting) is
modelled along with simulations of microclimatic conditions. This also provides
inputs for the design of outdoor common spaces.
3. Construction Management and Cost Control:
3.1. During construction, management and cost control tools are used to verify that
everything is going according to plan. All changes needed in the processes or
technologies deployed at the building or settlement level will be evaluated using
the change management tool, to determine the final savings compared to business
as usual.
3.2. As construction at the settlement level is more complex than the already complex
construction of energy efficient buildings, construction management tools and
processes are used to avoid clashes and delays. The coordination seen in
previous steps including the choice of the technology is monitored centrally to
ensure delivery of the settlement as designed, including the site planning.
4. Building Performance and Monitoring:
4.1. ZERO-PLUS has developed tools and protocols to monitor the performance of the
settlement as regards the targets for energy use.
4.2. Each building and settlement includes sensors to obtain monitoring data to check
on the targets that ZERO-PLUS aims for. The data collected includes: thermal
comfort, visual comfort, and indoor air quality for the building level.
4.3. At the settlement level an integrated resources management system and
dashboard enable verification of the energy demand and production. With this
information in hand, it is possible to control and manage the energy load.
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Impacts
ZERO-PLUS aims to overcome barriers such as the fragmentation of the supply side of
construction by integrating design and delivery of construction and by strengthening key
partnerships.
The expected impacts of the application of the ZERO-PLUS concept are an improved energy
and environmental performance at the building and settlement level, including improved
comfort and a lower financial burden on all the actors involved in the process. It will also
improve innovation capacity and the integration of new knowledge of cutting edge technology.
For specific stakeholder types, the main driver for application of the concept will vary. For a
social housing company, for example, the main driver could be the reduction of the financial
burden for residents while for settlements aimed at higher income brackets the main driver
could be increased comfort.
What would it mean to live in a ZERO-PLUS settlement?
Living in a ZERO-PLUS settlement would mean a more comfortable experience due to the
improvements in insulation and home energy management, with residents having access to
real and useful monitoring information. The ZERO-PLUS approach would benefit the residents
by lowering energy costs, as the buildings will have reduced energy consumption and most of
the energy required for the functioning of the house would be produced either in the building
or in the settlement.
The developer will be in charge of the servicing the system, with no need for the resident to
contact external advisors or consultants. Living in a ZERO-PLUS settlement will contribute to
increased sustainability through reduced energy consumption and CO2 emission reduction.
ZERO-PLUS and the Construction Industry
The ZERO-PLUS approach will help the private sector to comply with national and EU level
legislation, as well as increasing profitability by reducing construction and maintenance costs.
This will ultimately generate employment opportunities in the sector. The homes in this type
of settlements will be easily marketed due to their reduced price and the increased comfort
they will provide to residents.
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Given how risky real estate development is, encouraging innovation in a conservative market
like this is a difficult task. Industry leaders identified resistance to change as one of the main
barriers to innovation in the construction industry (Isaac, Pana Tronca, & Gajsak, 2016). That
is why in the development of the ZERO-PLUS concept emphasis is put on the promotion of a
new way of thinking. We aim to provide the market with strategies that can be employed to
reduce the resistance to change, and make it easier for the construction industry to quickly
adopt technologies and processes that are necessary to increase the energy efficiency of its
products.
ZERO-PLUS and the design and construction process
Table 2 provides an overview of a typical conventional design and construction process and
the main activities required to implement the ZERO-PLUS concept at each stage. To facilitate
creation of the overview, in the table the conventional stages are presented sequentially. In
reality, there can be significant overlap between the stages, for example before finalizing the
feasibility studies, the master planning stage can already begin (as illustrated in Figure 4).
Figure 4 A conventional design and construction process.
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In contrast to the linear conventional process (Figure 4), the ZERO-PLUS approach employs
an integrated and iterative design process (Figure 5). The purpose of this document is to
assess how the ZERO-PLUS approach could be implemented commercially. While containing
iterative elements, such an implementation would have to fit in with established practices in
the construction industry. In order to stimulate thinking about how the ZERO-PLUS approach
could be implemented in a way that is consistent with established practices, we present in the
following Section an overview of which ZERO-PLUS activities need to happen at which stage
in the conventional construction process. Iteration would still be a crucial element of the ZERO-
PLUS approach, since activities such as the design, simulation and optimization of the
technology at the building level would still involve iterations between designers and simulation
expertise. The degree of iteration that is feasible in a commercial implementation is, however,
still to be determined.
Figure 5 ZERO-PLUS approach to construction.
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3.2 ZERO-PLUS and the design and construction process
The following table (Table 2) provides an overview of a conventional design and construction process and
the activities required to implement the ZERO-PLUS concept at each stage.
Table 2 Comparative stages in the construction process.
Stage in design and construction process
Activities in design and construction process
ZERO-PLUS main components and detailed activities
Design: Feasibility Studies
The purpose of feasibility studies is to:
Establish whether the project is viable.
Help identify feasible options.
Assist in the development of other project documentation such as the business case, project execution plan, and strategic brief.
Preparatory activities:
Collection of the necessary data (wind maps and irradiation data) to plan the use of materials and technologies for outdoors such as renewable energy production, energy management, and environmental control to be implemented in common areas of the settlement.
Predict expected performance of technologies for energy management and production.
Customization of monitoring protocols and procedures to control and optimize environmental conditions of projected NZE settlement.
Design: Master Planning
Project masterplans tend to be focused on a specific site with definable boundaries. Masterplanning includes both an analysis process and the preparation of the spatial masterplan document, setting out proposals for buildings, spaces, movement strategy and land use in three dimensions. A complete masterplan is supported by financial, economic and social policy documents and delivery mechanisms (CABE, 2004). Hence, the main activities during masterplanning include:
Determining the size and scope of a development
Determining need for construction, land issues, risk assessment and environmental impact.
Settlement level optimization:
Design of the outdoor commons spaces in order to optimize outdoor local climate conditions in the settlement areas.
Improve the performance of outdoor renewable energy systems and technologies by considering local climate boundary conditions and constraints.
Customization of protocols to measure the actual in situ energy needs, savings and generation through technologies in the settlement common spaces.
Simulation of energy systems at the NZE settlement level.
For any new technologies for which such an analysis has not already been done: perform a comparative analysis of the materials and technologies from a life cycle impact point of view to be implemented in the outdoor environment.
Initial integrated design:
Selection of the combination of technologies to be implemented in the project at the settlement level.
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Stage in design and construction process
Activities in design and construction process
ZERO-PLUS main components and detailed activities
Approval of the Master Plan by planning authority.
Outline Building Design (1:100) (Concept design)
The concept design represents the design team's initial response to the project brief. During the concept design stage, the consultant team will develop:
The design concept
Outline specifications
Schedules of accommodation
A planning strategy
The cost plan
Procurement options
Programme and phasing strategy
Buildability and construction logistics
Design, optimization and integration:
Design coordination: including interface checking and clash detection
Design, simulate and optimize the technology of the building level: This includes energy producing energy technology and home energy management and control system.
Technical and financial optimization of the integrated design.
Conservative preliminary cost assessment and appropriate budget reserves
Creation of a detailed site plans including the work breakdown structure and a location based schedule.
Quality control and verification of the design.
Design of the monitoring and performance analysis platform.
Development of the performance analysis platform and its implementation for data gathering.
Optional: Perform an environmental assessment of the building based on an international standard (LEED or BREEAM).
Approval of the Outline Building Design
Detailed Building Design (1:50)
Detailed design should provide sufficient information for applications for statutory approval to be made. Detailed design should include:
Correct dimensional design of all building components and how they fit together
Overall layout
Road layouts and landscape
Operational flows and departmental operational policies
Horizontal and vertical circulation routes, including accessibility requirements
Identification of standard and non-standard room layouts
Building dimensions and gridlines
Architectural plans sections and elevations of buildings, parts of buildings and components
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Stage in design and construction process
Activities in design and construction process
ZERO-PLUS main components and detailed activities
Approval of the Detailed Design
The technical design may continue through the preparation of production information and tender documentation and even during construction itself, particularly where aspects of the technical design are undertaken by specialist subcontractors.
Start of construction2
Construction management:
Monitoring and Verification: Keep track of documentation in order to compare as designed with as built and to evaluate how and why there might be differences.
Selection of the monitoring and verification devices to be installed in the buildings.
The design of the building commissioning plan and implementation to verify the performance of the installed technology
Change management process
Completion Building performance and monitoring:
Co-heating test. In situ U-value measurements. Air-permeability test. Infra-red thermography. To get data to compare for monitoring and verification purposes
For settlements that will be maintained by maintenance companies, once these have been identified, awareness raising of their role in helping to achieve the impacts
Occupancy Collection and analysis of essential background information. Continuous monitoring. Walkthrough evaluation of all elements from systems to controls, to occupant behavior. Analysis.
End-users (residents and maintenance companies) take part in the monitoring and help to achieve the impacts by keeping an eye out for malfunctioning of systems and identifying potential improvements.
Post occupancy evaluation.
2 Construction can start before the detailed design has been completed, but will usually start only afterwards. The first
option is called "concurrent engineering". It has its advantages (such as reduced project duration) but also risks (such as the possible need for rework following later changes in the design). A major difference is that with concurrent engineering you will not have a single main contractor (since you cannot issue a tender that includes all the works), unless it is a "design-build" project (where a single company designs and constructs the entire project). You therefore have to use "construction management" (when a single construction manager has to coordinate the work of different contractors), with each one of the contractors who are responsible for different parts of the project (e.g. structure and M&E) selected through a specific tender.
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3.3 Key Performance Indicators
The use of Key Performance Indicators (KPIs) in management is crucial for decision making and is strongly
linked with the goals of an organisation. The specific KPIs used will depend on the level being looked at and
on the focus of a company or project. Recommendations on Key Performance Indicators that could be used
by companies that adopt the ZERO-PLUS concept will be made once a choice has been made for a business
case. During the development of the business plan such KPIs can be selected and defined.
The basic KPIs for ZERO-PLUS are those related to the three main performance goals (see Section 3.1):
1. Operational energy usage in residential buildings in ZERO-PLUS settlements (kWh/m2)
2. Renewable energy generated at the settlement level (kWh/m2)
3. Cost
In addition to these basic KPIs, other indicators may be developed or selected from existing typical KPIs.
Below we present a list of KPIs used in construction projects and companies, as well as general indicators
for business, innovation and sustainability (Constructing Excellence). These are examples of typical KPIs,
individual projects and companies will use some of the KPIs presented but may also have identified other
KPIs that are of particular importance to them.
3.3.1 KPIs for the construction sector: project level.
Client satisfaction (Product): How satisfied was the client with the finished product or a service (can
be measured for consultants’ or contractors’ services from the building’s owner’s perspective, and it
would be an internal KPI. This means it is a performance measure for supply). This can be measured
using a 1 to 10 scale, where 1 means totally dissatisfied and 10 totally satisfied.
Defects: measures the condition of the product at the time of handover to the client. This KPI can be
seen from the customers’ perspective using a scale from “defect free” to “totally defective” for the
impact on the client.
Predictability of cost: different KPIs for predictability depend on the procurement of the construction
process that is being implemented. In this case, the KPIs are created for a normal design and build
contract.3 Types of KPIs for predictability include:
3 Design and build is a type of procurement path for construction where both activities are performed by the same
stakeholder. A detailed evaluation of design and build can be found in the ZERO-PLUS report output”Analysis of the market potential within the EU 28 for ‘nearly-zero-energy’ buildings constructed using concepts developed in the project”.
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o Design cost: the cost of design at the ‘available to use’ (AU) (for a visual representation and
definitions please look at Figure 6) stage minus the expected design cost at the ‘commit to
invest’ (CI) stage, shown as a percentage:
(AU-CI)/CI
The ‘available to use’ (AU) stage is when residents can use the building. ‘Commit to invest’
(CI) refers to the stage where the design is presented to the finance office, but prior to signing
a contract.
o Construction cost: the cost at the available to use stage, minus the cost at the commit to
construct (CC) stage, represented as a percentage.
(AU-CC)/CC
Commit to construct is the phase where the contract has already been signed, and a bill of
quantities has been produced.
o Project cost: the actual cost of the combined design and construction process (AC) at AU,
minus the sum of total cost at the CI stage (TCI), represented as a percentage of CI.
AC-TCI/CI
The combined cost of design and construction (AC) is the total cost at the available for use
stage (AU). Total cost at the CI stage (TCI) is the total cost at the commit to invest stage.
Predictability of time:
o Design time: Duration of the design process at the ‘Commit to Construct’ stage (DCC), minus
the planned duration of the design at the ‘Commit to Invest’ stage (DCI), expressed as a
percentage of the duration at the CI stage:
(DCC-DCI)/DCI
The duration of the design process at the commit to construct stage (DCC) is the duration in
time for design and DCI is the planned time for design allocated at the commit to invest stage,
which is an earlier stage than commit to construct.
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o Construction time: the duration of construction at the AU stage (CAU) minus the anticipated
duration at the CC stage (CCC), as a percentage of the planned duration at the CC stage.
CAU-CCC/CCC
The duration of the construction at the available for use stage is the real time that passes from
construction until the residents use the building. CCC is the expected construction time at the
commit to construct stage.
Figure 6 Key project stages. Source: (Constructing Excellence).
3.3.2 KPIs for the construction sector: company level
Profitability: the company`s profit before tax and interest payments as a percentage of sales.
Productivity: company value added per employee.
Safety: accidents per number of employees per year.
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Employee satisfaction: can be measured according to different parameters, including influence over
their jobs, pay, work conditions, and a sense of respect from management. Can be measured on a
scale from 1 to 10, 1 being completely dissatisfied and 10 being completely satisfied.
3.3.3 KPIs for the construction sector: environmental impact
Impact on the environment. In this example, the impact on the environment is not measured from an
environmental point of view, but from a client satisfaction point of view. It is a complex indicator as it
has two variables, on one side the environmental management and on the other hand the
communication of it to the customer and their expectations.
o Product: customer satisfaction with the environmental impact of the process and the final
product on a scale from 1 to 10. This means that it is important that communication about how
the product was created is available to the customer.
Energy use:
o Product: amount of CO2 emissions caused by the energy use of the completed product or
facility per gross floor area (kg CO2/100m2/yr).
o Process: amount of CO2 emissions during the construction process per $ of project value (kg
CO2/$).
Water use: amount of water used to finalise the product, or used in the construction process (m3/yr).
3.3.4 KPIs assessing innovation
Innovation, too, must be defined so that it can be measured appropriately. The organisation also needs to
know what innovation means to their customers, and how to use internal processes to create value from
innovative products or services (Bearing Point).
Some KPIs can be measured in each step of the innovation process. These KPIs are measured as a division.
In the list below, first item should be divided by the second item. These items are separated by a colon.4
Ideas: Ideation campaigns
Ideas that reach concept design / Ideas
Implemented designs / Concept designs
4 For example, ideas/ideation campaigns show if the ideation campaigns brought up ideas that later can be
developed into innovative products. The goal of this section is to show that there are several KPIs that can be implemented. Later in the business plan, some of these KPIs will be selected and explained in detail.
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Ideas that sell / Implemented ideas
Ideas that make a profit / Ideas that sell
Sales leads / Target customer base
Sales / Sales leads
KPIs that measure financial and market measures of innovation:
Revenue from new products or services
Profit from new products or services
New customers from new products or services
New segments and sector entries from new products and services
KPIs that measure profitability from innovation:
How much have your customers increased their success (in terms of quality, sales, revenue…) or
reduced their cost due to use of your products and services
Rate of return on innovation investment (how sustainable is your innovation)
Market share growth from new products & services
Brand awareness and stickiness (those who stay with the new product / those who leave)
Patents created per year / Market share protected by patents
Revenue protected by patents / Revenue generated from licensing patents
3.3.5 KPIs for procurement activities
The following KPIs were identified for procurement activities (Proactis, 2017):
Internal:
o Multiple pockets of supplier information: this KPI measures the efficiency of procurement
management. Supplier data should be managed centrally to simplify the process of finding the
right supplier.
o Procurement team productivity: Productivity can be measured according to different
parameters, and it is up to the Procurement manager to determine which one is crucial or if it
is a mix of various variables. The main parameter is the time of a sourcing event.
External (Suppliers)
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o On-time delivery: amount of deliveries on time
o Supplier scorecards: each organisation can perform an analysis of their supply base. This may
include sub KPIs like quality, risk, compliance, delivery, cost and customer service.
3.3.6 Example of KPI matrix in a Sustainable Building Standard
Active house (Active House, 2013) is a standard for new construction. It has certain performance parameters
to certify whether a house meets their standard. The main factors considered are quantitative and they are
divided into comfort, environment and energy.5
To measure the active house standard about comfort, they measure:
Daylight: measured by the average daylight factor level
Thermal comfort: minimum and maximum indoor temperature levels
Air quality: concentration of CO2 at room level during occupancy.
Energy: Active house looks at primary energy performance, which is described as the difference between a
reduced energy demand and a renewable energy supply.
Concerning the environmental leg of the standard, performance is determined based on two factors:
freshwater consumption during construction and sustainable construction. The last one includes recyclable
content and responsible sourcing.
3.4 Business cases developed in other EU Research Projects
ZERO-PLUS is funded by the EU under the Horizon 2020 Framework Programme. Under this research
umbrella, some other projects within the energy efficiency and construction sector have developed Business
Cases and Business Models for products and services.
Although ZERO-PLUS is unique in its kind due to the challenging objectives it proposes, it is important to
look at what other EU funded projects achieved. A glance to the type of products and services created by
5 For further information: https://www.activehouse.info/
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these EU projects gives us the opportunity to understand what an EU project can achieve and also to see
what those BC authors and stakeholders thought that the market would need.
A summary of three Horizon 2020 projects and the business cases developed for those projects can be found
in ANNEX I.
All three projects are related to energy generation and management, and at some point include a notion of
settlement or at least a broader spatial dimension than a building. The business cases that came out from
these projects were:
Establishing a joint venture for energy management services for predicting renewable energy
generation, organisation of community demand, and optimisation to deliver control actions for the
system (ORIGIN project).
Technology that enable energy optimisation of residential buildings, focusing on the optimal control
of internal sub-systems within the Home Area Network (INTREPID project).
Service to existing companies with energy expertise to evolve into a new type of service provider,
“Energy Positive Neighbourhood Service Provider”. The IDEAS project also developed an Integrated
Energy Contract (IEC), which combines energy efficiency and renewable energy supply and
management in large buildings or group of buildings.
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4. Task definition: Building the case for change
This stage in the task definition focuses on identifying the drivers and constraints for the business case.
4.1 Barriers and suggested approaches to remove them
Previously, we asked the ZERO-PLUS project partners about the drivers and barriers for them to innovate in
the Near Zero Energy Building (NZEB) industry and for Net Zero Energy Settlements (NZES) to develop
(Isaac, Pana Tronca, & Gajsak, 2016)6.The analysis in this section is based on the barriers identified by our
partners in this survey. Below we suggest approaches to remove or mitigate the barriers. The identification
of the barriers and of possible approaches to mitigate them provides us with information on the problems that
the ZERO-PLUS concept will need to solve in order to be accepted in the market (see Table 3).
Table 3 Barriers identified by ZERO-PLUS partners to the construction of NZEBs and NZESs and suggested approaches to mitigate these barriers.
Technical barriers Mitigation approach
Uneven implementation of regulations in the EU
market that limits the capacity of greater economies
of scale by homogenizing the products and
processes.
Standardize and homogenize national regulations to
incentivise economies of scale as regards the minimum
required performance for near zero energy technology.
Standards and energy labelling haven’t yet
integrated enough the technology innovations.
Seek for a greater integration of innovative technology in
standards and energy labelling codes.
As a consequence of the low stage of development
of new technology, single sourcing is a risk in most
entrepreneurship.
Promote strategies for start up technology innovators for a
better sourcing base, reducing the risk of single sourcing.
More work needs to be done in the design and
optimisation of the technology on the building.
Promote integration of energy producing technology to the
building design.
Planning process is longer and more expensive than
normal construction.
Reduce the time for planning and optimisation of settlement
construction.
Economic barriers Mitigation approach
6 The report can be found in the following link: http://www.ZERO-PLUS.org/pdf/ZERO%20PLUS_D8.1.pdf
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It is difficult to calculate ROI in NZEBs due to user
behaviour, specially with energy management, it is
also not certain in sustainable construction in
general.
Research the causes for a weak ROI calculation in the
sustainable construction industry. Produce methodologies
to improve the calculations of Return on Investment based
on user behaviour.
Split incentives. Solve the dilemma between those who benefit from the
reduced energy costs and those who have to invest.
New technology experiences higher costs for the
market uptake, they also face cash flow issues when
they are subcontracted.
Improve financing for start ups in the energy efficiency
sector.
Behavioural barriers Mitigation approach
Construction industry is conservative, they won’t
change easily and they don’t have the skills and
proper information to make a conscious change.
Promote the skills (Training) and information necessary as
regards the use of innovative materials and technologies.
The advantages of NZEB are not know by the
general public well enough.
Promote the advantages of NZEB and NZES to the general
public in order to continue increasing the demand.
4.2 Drivers, Benefits and Constraints
To identify benefits and constraints affecting the business case, an online survey was sent to the ZERO-
PLUS consortium partners between the 16th of February and the 9th of March of 2017. There were 14
respondents, out of which 4 were case studies owners, 6 were research partners and 4 technology providers.
The survey questions can be found in ANNEX II.
4.2.1 Drivers
As regards drivers for the market to develop in the NZEB sector, in a previous report (Isaac, Pana Tronca, &
Gajsak, 2016) we found the following:
Demand:
o There is an increased demand for energy efficient buildings due to an increase of awareness
of sustainability. This is related with an increase in digitalisation and availability of information.
o Energy savings are seen from the consumers as a driver to buy or rent a sustainable house,
but also for social housing associations as something positive as increases the available
income for residents.
Public sector: Increased energy security.
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Legislation: regulations, in particular those that define goals while leaving space for innovation in how
to achieve them, and also soft norms such as ISO.
Awareness and knowledge: NZEBs also is something that increases the social image of companies.
Financial: Grants and soft loans from governments.
4.2.2 Benefits
In the survey that was conducted to obtain input for the business case, the participants were asked to consider
products or services that could grow out of the ZERO-PLUS project. Then they were asked to rate how
important the potential benefits of such a product or service are for their organisation
The list of benefits that was presented to the participants was as follows:
Contributing to high quality research, innovation and constant improvement of processes in the
construction industry.
Increased sales of energy efficiency products or services, through reducing costs for end users
(economies of scale)
Demonstrate the readiness of products and processes that are part of the ZERO-PLUS concept.
Enhance the reputation of participants.
Provide a clear roadmap for achieving compliance with European regulations for energy efficiency in
buildings.
Improve the quality of service to customers that would use or buy a ZERO-PLUS service or product.
Integration of the construction supply chain.
Increase awareness of sustainability in the construction industry.
Energy savings by users of the final product or service.
Energy security of users of the final product or service.
We also asked participants to add any benefits that they thought important to the list. The individual responses
here were:
Data availability for scientific purposes.
Networking, collaborating with partners for potential future joint projects (ranked with a 4).
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Collaboration with start-ups and improvement of the products (ranked with a 5).
In Figure 7 we find the top 6 benefits for technology providers, in Figure 8 for case study partners and in
Figure 9 for research institutions. We divided the analysis in these three groups who share similar
organizational characteristics and goals, as grouped in the stakeholders` analysis. An overall analysis is
found in Figure 10.
Figure 7 Top 6 Benefits for Technology Providers according to the survey responses.
Figure 8 Top 6 Benefits for Case Study Partners according to the survey responses.
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5
Increased sales of energy efficient products or services, throughreducing costs for end users (economies of scale)
Demonstrate the readiness of products and processes that are partof the Zero Plus concept
Enhance the reputation of participants
Provide a clear roadmap for achieving compliance with Europeanregulation for energy efficiency in buildings
Energy savings by users of the final product or service
Energy security of users of the final product or service
Importance
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5
Increased sales of energy efficient products or services, through…
Enhance the reputation of participants
Provide a clear roadmap for achieving compliance with European…
Improve the quality of service to customers that would use or buy a…
Integration of the Construction Supply Chain
Energy savings by users of the final product or service
Importance
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Figure 9 Top 6 Benefits for Research Institutions according to the survey responses.
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5
Contributing to high quality research, innovation and constant…
Demonstrate the readiness of products and processes that are part…
Enhance the reputation of participants
Increase Awareness on sustainability in the construction industry
Energy savings by users of the final product or service
Energy security of users of the final product or service
Importance
Top 6 Benefits for Research Institutions
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Figure 10 Average, maximum and minimum rating for the importance of benefits according to the survey responses.
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4.2.3 Constraints
Survey participants were asked for their opinion on constraints in the following question:
What factors (constraints) might prevent the service or product that might come out of the ZERO-PLUS
concept from achieving its goals? Please rate the following constraints from 1 to 5, with 1 not being important
at all and 5 being very important.
Eight constraints were proposed, and participants were also given the opportunity to add any constraints that
they thought important to the list. The presented constraints were the following:
Availability of finance
Availability of skills and labour
The market is saturated
Materials of supply limitations
Internal limitations to collaboration between the ZERO-PLUS partners
Legal constraints such as labour law, industry regulations or intellectual property
Lack of demand for the products or services
Time constraints such as delays in the implementation
Constraints identified by individual respondents are:
Market issues compromising the construction work
Products need to achieve more than existing products or cost less.
Lack of flexibility to allow sufficient adjustment to local requirements
Public awareness
Following the stakeholder analysis, with our three types of Project partners, in Figure 11 we find the top 5
constraints for case study partners, in Figure 12 for research institutions and in Figure 13 also the top 5 for
technology providers. Finally, in Figure 14 we present a graph with the average, maximum and minimum
rating for the importance of the constraints in general.
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Figure 11 Top 5 Constraints for Case Study Partners.
Figure 12 Top 5 Constraints for Research Institutions.
0 1 2 3 4 5
Availability of finance
Availability of skills and labour
Legal constraints such as labour law, industry regulations orintellectual propierty
Lack of demand for the products or services
Time constraints, such as delays in the implementation
Importance
0 1 2 3 4 5
Availability of finance
Availability of skills and labour
Internal limitations to collaboration between the Zero Pluspartners
Legal constraints such as labour law, industry regulations orintellectual propierty
Lack of demand for the products or services
Importance
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Figure 13 Top 5 Constraints for Technology Providers.
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5
Availability of finance
Materials or supply limitations
Internal limitations to collaboration between the Zero Pluspartners
Lack of demand for the products or services
Time constraints, such as delays in the implementation
Importance
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Figure 14 Average, maximum and minimum rating for the importance of constraints according to the survey responses
0
1
2
3
4
5
Availability of finance The market is alreadysaturated
Internal limitations tocollaboration betweenthe Zero Plus partners
Lack of demand for theproducts or services
Imp
ort
ance
Average Max Min
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5. Task definition: Strategic Landscape of ZERO-PLUS
5.1 Stakeholder analysis
The following stakeholder analysis matrix employs the stakeholder analysis methodology described in Section 2.2.1 above to analyse the stakeholders in the
ZERO-PLUS project and in the business case. The table (Table 4) is assessing the stakeholders mainly from the perspective of the business case and their
interest in it. The analysis of influence and importance, however, can only be done for a specific project and is done here looking at ZERO-PLUS.
Table 4 Strategic landscape.
Stakeholder Type
Interests and how the stakeholder is affected by
the problem the project wants to address
Capacity and motivation to bring about change
Possible actions to address stakeholder interests in the selected option for the business
case
Influence/ Importance
on the ZERO-PLUS project
ZERO-PLUS project partners: Technology providers
Internal/ Private
Their main objective is to introduce their innovations in to the market and achieve profitability.
Have the patents for the technology that will make achieve the objectives of the project.
Unknown interest in the future of the concept of ZERO-PLUS.
As guided by economic profit and in the case of start ups low financing capacity.
Ensure that new technologies are incorporated into the designed buildings and that this fact is given sufficient publicity.
Ensure sufficient financing for technology providers
seek for a greater integration of innovative technology in any standards and energy labelling codes developed.
Support start up technology innovators to develop a better sourcing base, reducing the risk of single sourcing.
Ensure integration of energy producing technology from the first stages of building design
Low/High
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Stakeholder Type
Interests and how the stakeholder is affected by
the problem the project wants to address
Capacity and motivation to bring about change
Possible actions to address stakeholder interests in the selected option for the business
case
Influence/ Importance
on the ZERO-PLUS project
ZERO-PLUS project partners: Social Housing Developers
Internal/ Public-Private
Deliver affordable housing to low income families. Reduce energy bills for users, and be green champions.
Tend to innovate in building efficiency due to its public leg and because of social pressure or to achieve a green credential. Large developers have the enough funds to support the whole development of a settlement.
They can benefit from the settlement level optimisation.
Reduce the time for planning and optimisation of settlement construction
Produce methodologies to improve the calculations of Return on Investment based on user behaviour.
Reduce investment cost and the split incentives dilemma.
Promote the benefits of NZEB and NZES to the general public in order to continue increasing the demand.
Medium/High
ZERO-PLUS project partners: Construction Developers
Internal/ Private
They will need to get in compliance with the EPBD by 2020.
Address the increased demand for sustainable buildings
Lack of skills in their labour and goal of increasing profit.
They have the infrastructure to develop settlements.
Same actions as those for Social Housing plus,
Promote the skills (training) and information necessary as regards innovative materials and technologies.
Standardize and homogenize national regulations to incentivise economies of scale as regards minimum required performance for near zero energy technology.
Seek for a greater integration of innovative technology in standards and energy labelling codes.
Medium/High
ZERO-PLUS project partners: Universities
Internal/ Public-Private
Research and expand knowledge
Interested in the application of their research.
Potential to train future students (Architects, Engineers)
Depend financially on research and education services.
Produce methodologies to improve the calculations of Return on Investment based on user behaviour.
Promote the skills (Training) and information necessary as regards innovative materials and technologies.
Promote the benefits of NZEB and NZES to the general public in order to continue increasing the demand.
High/High
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Stakeholder Type
Interests and how the stakeholder is affected by
the problem the project wants to address
Capacity and motivation to bring about change
Possible actions to address stakeholder interests in the selected option for the business
case
Influence/ Importance
on the ZERO-PLUS project
External Advisors to the ZERO-PLUS Project + EC
Internal/ Public
Reduce energy consumption
Increase energy independence for residential buildings
Increase innovation and productivity
Create standards to encourage union between the countries and synergies as economies of scale.
Great funding capacity for projects under the Horizon 2020 programme.
Committed to achieve reduction in energy consumption and CO2 emissions.
Reduce energy dependence from external EU countries.
Promote the benefits of NZEB and NZES to the general public in order to continue increasing the demand.
Standardize and homogenize national regulations to incentivise economies of scale as regards minimum required performance for near zero energy technology.
Seek for a greater integration of innovative technology in standards and energy labelling codes.
Promote de integration of energy producing technology to the building
Demonstrate how a research project can be applied and achieve benefits for society.
Power of veto
ZERO-PLUS Project Managers
Internal Deliver the project with its goals accomplished.
Management of the project to deliver.
Possible the advocates for change and the business case.
Power of veto
Support Partners: E Co.
Internal/ Private
Business development
Dissemination and support
Assist the consortium with strategies for dissemination and market uptake.
Key business knowledge.
Advocates of application to the market.
Promote the skills (Training) and information necessary as regards innovative materials and technologies.
Promote the benefits of NZEB and NZES to the general public in order to continue increasing the demand.
Medium/Low
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Stakeholder Type
Interests and how the stakeholder is affected by
the problem the project wants to address
Capacity and motivation to bring about change
Possible actions to address stakeholder interests in the selected option for the business
case
Influence/ Importance
on the ZERO-PLUS project
Subcontrators for case study projects
Internal/ Public-Private
Deliver contract
Provision of certain technology.
Dissemination platform.
Reduce investment cost and solve the split incentives dilemma.
Standardize and homogenize national regulations to incentivise economies of scale as regards minimum required performance for near zero energy technology.
Seek for a greater integration of innovative technology in standards and energy labelling codes.
Promote de integration of energy producing technology to the building
Low/Medium
Local and Regional Authorities
External/ Public
Provide housing that is affordable and sustainable according to regulations.
Reduce pollution as a way to increase the liveability.
Public procurement of materials and Public Buildings regulations.
They are in charge of accepting development plans.
Reduce the time for planning and optimisation of settlement construction
Provide a solution for sustainable construction of settlements
Low/High
National Authorities External/ Public
Produce legislation to comply with EU regulation and climate change objectives.
Create jobs opportunities through an increased productivity of the construction sector
Public procurement of materials and Public Buildings regulations.
Usually have funds for innovation programmes.
National social housing schemes.
Reduce spending in energy and energy subsidies.
Standardize and homogenize national regulations to incentivise economies of scale as regards minimum required performance for near zero energy technology.
Reduce investment cost and solve the split incentives dilemma.
Promote the benefits of NZEB and NZES to the general public in order to continue increasing the demand.
Low/Medium
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Stakeholder Type
Interests and how the stakeholder is affected by
the problem the project wants to address
Capacity and motivation to bring about change
Possible actions to address stakeholder interests in the selected option for the business
case
Influence/ Importance
on the ZERO-PLUS project
EU Parliament External/ Public
Produce legislation according to the objectives of the EU.
Advocate for standardisation between the countries of the Union.
Support European Innovation through creating opportunities and limiting external risks.
Capacity of passing legislation that supports climate change, labour and construction regulations.
Produce analysis of topics.
Encourages the dialogue of innovation and business competition.
Approves research budget.
Standardize and homogenize national regulations to incentivise economies of scale as regards minimum required performance for near zero energy technology.
Reduce investment cost and solve the split incentives dilemma.
Promote the benefits of NZEB and NZES to the general public in order to continue increasing the demand.
Demonstrate how a research project can be applied and achieve benefits for society.
Low/Medium
Wholesalers of technology
External/ Private
Increase profit through increased sales. Improve their market share.
They provide the sales channels and have key information on marketing strategies and the market.
Under BAU scenario, they are the risk takers for innovative technology.
Standardize and homogenize national regulations to incentivise economies of scale as regards minimum required performance for near zero energy technology.
Seek for a greater integration of innovative technology in standards and energy labelling codes.
Promote de integration of energy producing technology to the building
Low/Low
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Stakeholder Type
Interests and how the stakeholder is affected by
the problem the project wants to address
Capacity and motivation to bring about change
Possible actions to address stakeholder interests in the selected option for the business
case
Influence/ Importance
on the ZERO-PLUS project
Construction Professionals (Architects + Construction Managers + Engineers + Builders)
External/ Private
Acquire skills and information for innovative technology and processes in their sector.
Continue training.
Know the regulations for construction, as they need to apply for permits.
In charge of the design and planning of buildings and settlements.
Possibly know about the end user comfort and aesthetic taste.
Provide a platform for discussion and networking for professionals to exchange views and get updates on innovative technology and construction processes.
Seek for a greater integration of innovative technology in standards and energy labelling codes.
Reduce the time for planning and optimisation of settlement construction
Produce methodologies to improve the calculations of Return on Investment based on user behaviour.
Promote the skills (Training) and information necessary as regards innovative materials and technologies.
Promote the benefits of NZEB and NZES to the general public in order to continue increasing the demand.
Low/Medium
Utilities External/ Public-Private
Develop new business models that are in line with innovation to keep providing service after the decentralization of the energy supply system.
Reduce cost of operations.
They provide the platform for servicing the settlement from the classic sources.
Provide key information on energy management and energy fees, and user consumption and times.
Standardize and homogenize national regulations to incentivise economies of scale as regards minimum required performance for near zero energy technology.
Promote de integration of energy producing technology to the building
Low/Medium
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Stakeholder Type
Interests and how the stakeholder is affected by
the problem the project wants to address
Capacity and motivation to bring about change
Possible actions to address stakeholder interests in the selected option for the business
case
Influence/ Importance
on the ZERO-PLUS project
Residents of buildings
External/ Private
Reduce energy bills
They want to improve their house comfort.
They want to improve the environment where they live.
Get better jobs.
Not well informed on energy efficiency.
Increased pressure on families budget due to energy bill increased and general economic situation.
Energy poverty.
Promote the benefits of NZEB and NZES to the general public in order to continue increasing the demand.
Reduce investment cost and solve the split incentives dilemma.
Standardize and homogenize national regulations to incentivise economies of scale as regards minimum required performance for near zero energy technology.
Low/High
Standarisation / Certification bodies
External/ Public-Private
Foster economy in global trade.
Increase citizen welfare.
Protect the environment.
Remove trade barriers.
Catalyze businesses.
Research and develop standards.
They are funded by public institutions, or they get their revenue streams from certification processes.
Standardize and homogenize national regulations to incentivise economies of scale as regards minimum required performance for near zero energy technology.
Seek for a greater integration of innovative technology in standards and energy labelling codes.
Promote the skills (Training) and information necessary as regards innovative materials and technologies.
Promote the benefits of NZEB and NZES to the general public in order to continue increasing the demand.
Low/Low
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Stakeholder Type
Interests and how the stakeholder is affected by
the problem the project wants to address
Capacity and motivation to bring about change
Possible actions to address stakeholder interests in the selected option for the business
case
Influence/ Importance
on the ZERO-PLUS project
Financial Institutions and Investment Funds
External/ Public-Private
If public, possibly interested in solving the financial gap for development and climate change projects as a way to reduce emissions.
If private, get profits from their investments. Possibly interested in sustainable projects as the result of better interests rates or risk.
Great economic influence due to the services and subjects they target.
Some might have interest in the objectives of the project.
Reduce investment cost and solve the split incentives dilemma. Medium/Low
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Figure 15 Stakeholders importance/influence diagram
Summing up the stakeholder analysis, Figure 15 presents the influence and importance of the categories of
stakeholders described above (Red circles represent public sector stake holders, yellow circles are private
sector stakeholders, orange are mixed). The size of the circles represents the participation in the project. Big
circles represent project members while small circles represent stakeholders outside the ZERO-PLUS
project.
The actors in sector A have the greatest importance and influence on the project, and their opinion, comments
and vision would need to be considered. Stakeholders in sector B, although they have a big importance, don’t
have enough power to influence directly the outcome. Stakeholders in sector C, account with a great influence
in the project, although they don’t have the greatest importance as regards the benefits they can get from the
chosen option. Stakeholders in sector D, although actors that we will need to review in order to get the
maximum perspective, don’t have influence on the decision.
5.2 Competitors
As part of the strategic landscape we have previously performed the stakeholder analysis. In this section, we
will look at the competitors in the energy efficiency sector. The information provided here comes from
discussion with ZERO-PLUS consortium, combined with the findings of the literature review performed in the
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ZERO-PLUS report output ”Market analysis of the trends in the construction of residential highly energy
performing buildings” (Isaac, Pana Tronca, & Gajsak, 2016).
In a dedicated workshop the ZERO-PLUS project participants identified key exploitable results (KER). A KER
is a product that fills a specific need or responds to the demand of a defined group of customers/users. There
are two tiers of KERs:
1. Tier 1 KERs are the inputs of the project. In some cases, they have reached a level of readiness that
allows them to be commercialised, such as for example WindRail, Freescoo, Integrated Energy
Resource Management, Insulation materials, FAE HCPV and Solarblock PV.
2. Second-tier KERs are outputs of the project. They come from a unique combination of standalone
solutions provided by the consortium partners. These include the Zero Energy Settlement, Zero
Energy Settlement optimisation methodology and a Zero Energy Settlement web platform.
Due to time constraints, only three KERs went through a deeper analysis: Integrated Energy Resources
Management, Zero Energy Settlement optimisation methodology, and Zero Energy Settlement web platform.
In this analysis, among others, competitors were looked at.
The integrated energy resource management KER wasn’t expected to have many competitors at the
settlement level. On the building level, some suppliers for energy management services can be found in the
German market. As regards the Zero Energy Settlement optimisation methodology, the competitors
identified were certification programmes like LEED, BREAM, PassivHaus and Active House. They work
mostly on the building level, but some, like LEED Neighbourhood Development and BREEAM Communities,
also work in the settlement level. Still, they focus on different criteria than the ZERO-PLUS approach, which
is mainly about energy generation, energy consumption and reduction of costs. Finally, the Zero Energy
Settlement web platform is thought to have no direct competitors. Still, there are companies that provide
some of the features of the web platform: methodologies for calculations of technology energy efficiency,
settlement microclimate simulations, life cycle assessment and life cycle costing, user feedback interface,
LEED pre-assessment and GIS integration. No other company provides all features of the web platform.
Smart grid software’s focus on reducing electricity consumption was also mentioned as a possible competitor.
On the other hand, based on the literature review carried out in ” Market analysis of the trends in the
construction of residential highly energy performing buildings” (Isaac, Pana Tronca, & Gajsak, 2016), we
have analysed 5 types of possible competitors.
First, new energy efficient settlements, such as BedZED, Solarsiedlung, North West Bicester Eco-Town,
whisper Valley and others. Although performance indicators for energy production and energy consumption
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are in line with the ZERO-PLUS approach, there is a lack of emphasis on reducing costs. Therefore, the
settlements are either marketed to the richer segment of the population, or marketed focusing on reduced
energy bills to increase demand. Performance monitoring has not always resulted in the expected savings,
as in the case of Zac de bonne in France. This type of settlement also includes the construction of commercial
and public services, and not just new housing.
Second, new energy efficient buildings. In this category, there is a mix of pre-fabricated sustainable houses,
commercial buildings and house labs, the latter of which are intended to try out energy efficiency products in
households. They are no direct competitors, as any potential competitors lack the settlement level approach.
Performance monitoring is also an issue for these potential competitors. The construction of energy efficient
buildings usually works with lower performance standards than ZERO-PLUS. For example, Meritage and
Mehrfamiliehaus were constructed with Energy Star and Passivhaus standards that don’t include energy
generation. The case of Zed Factory on the other hand is closer to the ZERO-PLUS approach, but still lacks
the geographical optimisation that ZERO-PLUS proposes, or the optimisation of the architectural design.
Third, we look at competitors in the energy efficiency supply chain, with companies like Wooconnect,
Omnetric or Advanced microgrid solutions among others. These companies could be competitors to the Tier
1 KERs as they are applications, software or addons to the building.
Fourth, examples of community scale refurbishing companies in the energy efficiency market. Here we find
developments for refurbishment of energy producing facilities such as district heating, thermal energy plants,
or offshore wind farms. The ZERO-PLUS concept looks at energy generation at a bigger scale than the
building level and is open for different technologies and ways to achieve this. The analysis of this section of
the market is important, as it shows the variety of ways that the energy production leg of the ZERO-PLUS
approach can work. The type of energy generated will also depend on the optimisation of the building to the
environment where it is placed.
Finally, examples of companies in the energy efficient refurbishment of buildings market. This includes
companies like Reimarkt and Energiesprong. The latter is a good example of a project that was expanded
from the Netherlands to other EU countries. The refurbishment market is also different from new housing.
ZERO-PLUS looks at reducing costs in construction, using an optimised design for the most effective
technology. So, in principle both sectors look at the building and/or the settlement but from two different
(building?) time perspectives. Ultimately, it would be good to expand the BC for ZERO-PLUS to include
refurbishment.
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6. Developing the business case: Option identification
As described in Section 2, in option identification we look at a number of options for the business case that
we have identified and make preliminary suggestions for the what, who and where of implementing these
options (see Table 5). We also look at how each option would build on the outcomes of the ZERO-PLUS
project. Based on this estimate of the fit of each option with the nature of the ZERO-PLUS project, the case
for change and the strategic landscape, four options were selected for further analysis in the next section of
this document.
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Table 5Four Suggested options for the business case
Option Name
What Who Where How: Relation with ZERO-PLUS Discarded or
chosen for
further analysis
Research unit on energy efficiency in settlements
Involving researchers from the areas of architecture, engineering and environmental design, this unit would investigate how to improve construction processes and how to overcome barriers resulting from the fragmentation of the construction value chain. The unit would focus on applied research with the intention of generating results that could be used to create improved policies relating to sustainable construction.
The project could benefit from coordinating with the TG93 Building Zero Energy Settlements Commission from the International Council for Research and Innovation in Building and Construction. The unit would need to establish constant communication with technology innovators and developers, to incorporate the market perspectives in its research.
The location of the research unit is not as important as the geographical scale of the research the unit will need to conduct. In first instance the unit should focus on the different climate regions that are present in the European continent.
The research unit would continue with the research done in ZERO-PLUS in terms of energy efficiency integration to the building, but its capacities for application would be limited to the partnerships or arrangements with construction projects or technology entrepreneurs.
Discarded
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Option Name
What Who Where How: Relation with ZERO-PLUS Discarded or
chosen for
further analysis
Settlement Efficiency Standard
This standard could look specifically at settlement level integration of energy production and use. Over time it could evolve into a more comprehensive standard, including other sustainability features.
The standard will be supported by a continuous research forum, that will include industry members, academics and public sector to guide innovation in the sector. It will be necessary to train and forge a net of certifiers. (potentially from the LEED ND, BREAAM Communities).
The standard should be done at the European level. National or regional liaison institutions (a single person or organisations that would represent the standard) will need to be deployed in the whole continent to have to guarantee that the concept has a good geographical representation and will achieve the goal of unifying construction procedures.
One of the main outcomes of ZERO-PLUS is the development of guidelines for Net Zero Energy Settlements. The Business Case for it, would be a natural continuation of this WP, that also includes the research and knowledge created in the other WPs.
Chosen
Joint Venture
To form an independent company between some or all of the members of the consortium, to provide services for different stages in the construction process. It can be one single organisation with different services or various agreements with smaller organisations with specified niche markets.
The participants of the new organisation will depend on the type of service they decide to provide. It can be one or several companies that provide different services or products.
The services and products would need to be available in the whole European Union, although to launch it the organisation could decide to focus in specific national markets and later expand.
Following the example of the ORIGIN project (see Annex I), ZERO-PLUS could develop a partnership between Project Participants to provide products or services selected from the many developed in the project, specially about, design, integration optimisation and performance of the energy efficient technology to the building and settlement.
Chosen
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Option Name
What Who Where How: Relation with ZERO-PLUS Discarded or
chosen for
further analysis
European Innovation Agency for Construction
To develop an organisation that supports innovation in the construction industry by lobbying and networking between companies in the sector. The Agency could have as one of its aims to facilitate funding for innovation by SMEs. An example of a similar agency is Innovate UK.
The agency will need to be staffed with consultants and managers, specially within the area of business development, to identify business opportunities for technology and processes that innovate and provide the market with solutions for the construction of settlements.
While the physical presence of the Agency would need to be in one spot, the activities they perform need to be at the European level. It would be advisable them to work with national innovation agencies in order not to duplicate the work, and use each other capacities to create synergies.
This agency would follow the path for the objective of keeping innovation going on in the area of energy efficiency in construction.
Discarded.
ZERO-PLUS Forum or Fair
A space where supply and demand for innovative technology for the construction of settlements meet, similar to existing events of this nature.
A commission or organisation in charge of organising such Forum or Fair will need to be created with autonomy but it will need to pledge to the ZERO-PLUS concept.
The Forum or Fair can be itinerant and rotate every year from country to country or it can be in the same city, but assuring geographical diversity among the participants.
ZERO-PLUS has an interest in promoting innovative technology and collaboration.
Discarded
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Option Name
What Who Where How: Relation with ZERO-PLUS Discarded or
chosen for
further analysis
Settlement Passport
Similar to a building passport but distinct from a certificate of sustainable performance of a building such as LEED or BREEAM certificates). Such a passport would facilitate communication between owner, investor, maintenance professionals and tenants.
A consortium would need to be formed to specified the parameters that would be included in such passport and possible recommendations for further improvements. It would be beneficial that this group or organisation could have representatives from the market so as to include innovation and redefine parameters in the short term.
The passport would have to include the analysis of the geographical location of the settlement, as taken into account in the project. Each location would impact differently in the life of the settlement.
The passport would have to be made following the specifications and processes developed by ZERO-PLUS. For example as regards the modelling and optimisation of the technology incorporated.
Chosen
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Option Name
What Who Where How: Relation with ZERO-PLUS Discarded or
chosen for
further analysis
ZERO-PLUS Contract Template
Develop a contract template for construction developers that can resolve the split incentives problem by engaging the buyer or tenant in a long term obligation to pay for energy efficiency measures..
An organisation would need to be formed that includes lawyers and procurement specialists.
Would be advisable to start by reviewing contracting types in the case studies´ countries and then try to expand them to other EU countries.
In “Analysis of the market potential within the EU 28 for ‘nearly-zero-energy’ buildings constructed using concepts developed in the project”, the special need for innovative contracts that addresses the complexities of energy integration management into the construction industry. ZERO-PLUS aim is to solve this gap that acts as a barrier for greater collaboration. A disadvantage of this option is tat the ZERO-PLUS consortium don’t include lawyers and procurement specialist.
Discarded
ZERO-PLUS Toolkit
Create a ZERO-PLUS Toolkit for developers that would want to achieve the three ZERO-PLUS objectives in a construction project.
ZERO-PLUS participants are able to carry on with this option. A new type of organisation will need to be created. Staff in charge of administration and most important, marketing will be hired. The lead of the new organisation will be a subject open to discussion.
In principle the Toolkit would be useful for the 4 types of climatic conditions developed in ZERO-PLUS. But as ZERO-PLUS includes optimisation, it is possible to expand this to other climate types.
ZERO-PLUS wants to improve the energy building integration. A number of deliverables of the project include tools that, with some adaptation, could be made useful for more general application.
Chosen
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7. Developing the business case: Option Analysis
7.1 Benefits
To identify the benefits the Business Case should achieve with the implementation of
one of the choices we reviewed the ZERO-PLUS Project Proposal and the interviews
with the Project Partners included in ” Market analysis of the trends in the construction
of residential highly energy performing buildings” (Isaac, Pana Tronca, & Gajsak,
2016) (Isaac, Pana Tronca, & Gajsak, 2016) and added to this the information collected
in the Survey conducted in February 2017, also with Project Participants. The survey
can be found in ANNEX II.
The identified benefits were grouped in 5 general benefits types. These are:
Social Progress and Reduced Environmental Impacts, including the reduction
of GHG emissions, the right to a clean environment and social housing.
Cost reduction of Energy Efficient Settlements, included in the project proposal
as one of the three performance goals.
Increased Innovation Capacity, including the capacity of technology
innovations to access the market and to continue developing processes that
pursue the goal of improving energy efficiency.
Integration of the Supply Chain in the Construction Sector, including the
integration of the construction process, from design to construction and
monitoring, as well as the procurement choices, linking suppliers with
developers.
Harmonisation of National Implementation, including the compatibility of
national and local legislation to EU legislation.
For each business case option, at least four outputs were identified that are possible
results after the implementation of that option. These outputs are the following:
Settlement Efficiency Standard:
Improved Communication between Stakeholders
Increased Sustainability awareness
Reduce cost in construction due to economies of scale
Harmonisation of practices in the construction industry at the EU level
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Increased Energy Efficiency in the houses that are constructed according to the standard.
Joint Venture:
Integration of Design and Performance Monitoring in the Construction Process
Integration of Technology Innovations
Constant improvement of Construction Processes
Help to close the Performance Gap Settlement Passport:
Increased Sustainability Awareness
Enable New Forms of Finance
Unification of Parameters at the EU level
Improved Communications ZERO-PLUS Toolkit:
Encourage Market Entry of New Actors
Improve Energy Performance in the Building
Simplifying Energy Integration to the Building
Reduce Cost of Construction The most significant outputs were selected for further use in the analysis. The outputs
selected were then linked to the benefits they might generate as seen in Figure 16 .
Each benefit gets a weighting according to the importance it has for the project. Then
each output is given also a percentage that it contributes to each benefit. Then the
percentage is multiplied by the benefit weighting to get the output score per benefit, as
seen in Table 6.
The final output score is determined by the sum of the benefits in which those outputs
appear as seen in Table 7.
Finally, each business case option is graded according to the contribution it could make
to each output (Table 8). That grade is then multiplied by the score of the output. By
summing up the results of all the outputs of each option we obtain the total benefit
points for that option. The maximum possible score for an option is 1000.
The benefits analysis results show that the Settlement Efficiency Standard and the
ZERO-PLUS Toolkit could bring the most benefits the Stakeholders want the Project
to achieve.
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Figure 16 Outputs and benefits Map
Social Progress and
Environmental
Regeneration
(including GHG)
Cost Reduction of EE
Settlements
Increased Innovation
Capacity in the
Construction Sector
Integration of the
Construction Supply
Chain
Harmonisation of
National
Implementation
Reduction in
Construction CostsX X
Harmonisation of
practicesX X X
Take innovation to
the marketX X
Increased Energy
EfficiencyX X
Improved
communication and
awarenessX X X
Simplify energy
efficiency
integrationX X X
Benefits
O
u
t
p
u
t
s
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Table 6 Benefits and Outputs weighting
Table 7 Outputs score
Output Benefit Number Score
Reduction of Construction Cost
for Energy Efficient Settlements 1+2 33.0
Harmonisation of practices 2+4+5 14.5
Take innovation to the market 2+3 10.5
Increased Energy Efficiency 1+2 12.0
Improved Communication and
Awareness 1+2+3+4 19.5
Simplify Energy Efficiency
Integration 2+4+5 10.5
Benefit Number
Benefit Weighting (out of
100 pts) Output % contribution
Output score per benefit
1
Social Progress and Reduced Environmental Impacts (including GHG
emissions)
30
Reduction of Construction Cost for Energy Efficient
Settlements 35% 10.5
Increased Energy Efficiency 35% 10.5
Improved Communication and awareness
30% 9.0
2 Cost Reduction of Energy
Efficient Settlements 30
Reduction of Construction Cost for Energy Efficient
Settlements 75% 22.5
Harmonisation of practices 5% 1.5
Take innovation to the market
5% 1.5
Increased Energy Efficiency 5% 1.5
Improved Communication and Awareness
5% 1.5
Simplify Energy Efficiency Integration
5% 1.5
3 Increased Innovation
Capacity in the Construction Sector
15
Take innovation to the market
60% 9.0
Improved Communication and awareness
40% 6.0
4 Integration of the
Construction Supply Chain
15
Harmonisation of practices 40% 6.0
Improved Communication and awareness
20% 3.0
Simplify Energy Efficiency Integration
40% 6.0
5 Harmonisation of
National Implementation 10
Harmonisation of practices 70% 7.0
Simplify Energy Efficiency Integration
30% 3.0
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Table 8 Option scoring
Option
Outputs
Reduction of
Construction
Cost for
Energy
Efficient
Settlements
Harmonisation
of practices
Take
innovation
to the
market
Increased
Energy
Efficiency
Improved
Communication
and Awareness
Simplify
Energy
Efficiency
Integration
Total
Settlement
Efficiency
Standard
Grade 6 10 5 6 9 7
Result 198 145 52.5 72 175.5 73.5 716.5
Joint
Venture
Grade 5 1 8 8 5 8
Result 165 14.5 84 96 97.5 84 541
Settlement
Passport
Grade 2 9 6 5 8 5
Result 66 130.5 63 60 156 52.5 528
ZERO-PLUS
Toolkit
Grade 6 6 8 7 8 9
Result 198 87 84 84 156 94.5 703.5
7.2 Costs
7.2.1 Methodology and prior considerations
The cost assessment was done considering a three-year timeframe7.
7 This timeframe was chosen based on the stakeholder analysis. The analysis showed a variation of
stakeholder incentives to participate in the project. Investment costs tend to be the highest costs in
setting up a project. It was decided to consider the shortest time frame that would reflect the financing
need of the project, but also the stakeholder’s possibilities to fund it. The other thing that was considered
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We performed a qualitative assessment of cost by using different categories (Box 1).
The cost categories considered are defined in
Box 1. In
Table 9, each cost category is given a value ranging from low to high for each option,
and the reasons for the value given are explained (Since the functional cost categories
of IT costs, staffing and management are closely related to the other cost categories a
separate explanation is not provided for them).
For each option, we have determined whether the costs in each category would be
high, medium or low8. The ranking of the options, from least to most costly, is as
follows:
1. ZERO-PLUS toolkit
2. Joint venture
3. Settlement passport
4. Settlement efficiency standard
was the shortest possible time for getting revenue for the Business Case owner (ZERO-PLUS
consortium), and not for individual companies or organisations included in the Business Case owner.
8 For more information about the cost index please see Section 8.1.
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Establishment: these are the costs that are needed as a first investment to start the business. They include the goods, services and knowledge needed
to start running operations. They usually include opening stock, initial rent, licenses, permits, tools, stationery, and staff payment for work carried out
before the start of operations.
Maintenance: Costs of day-to-day operation of the business. They usually include administration, supervision, operation, maintenance, preservation
and marketing of the selected option.
Procurement: Procurement costs are the costs of contracting. In this case, they include some transaction costs. Those costs are needed for the company
or organisation to do business but they might not be written in a contract. A more detailed explanation of Procurement and transaction costs can be
found in the ZERO-PLUS report output “Analysis of the market potential within the EU 28 for ‘nearly-zero-energy’ buildings constructed using concepts
developed in the project”.
Revenue: the opposite of costs, the amount of money that an organisation receives for doing business.
IT: IT costs include hardware, software licenses, networking, integration and testing.
Staff: Staffing costs include salary payment for the time spent by workers to establish and operate the option that is chosen.
Management: the cost associated with maintaining the option but which does not contribute to the product or service that the organisation aims to
deliver.
Box 1 Definitions of cost categories considered in the analysis
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Table 9 Cost analysis of the selected options
Cost category Settlement Efficiency Standard Joint Venture Settlement Passport ZERO-PLUS Toolkit
Establishment HIGH: The set-up costs for a standard are high due to the intensive work that needs to be done in order to agree on a large quantity of sub items that are meant to be included in such a Standard.
MEDIUM: The establishment costs will depend on the type of company the stakeholders want to establish. Staff, as well as estate, overheads and IT, could be borne by the founder’s companies. The medium classification represents the opportunity costs that the founder companies will incur by reassigning resources.
HIGH: The establishment costs for this option are similar to those for the Standard, although less communication is needed to achieve a consensus.
MEDIUM: Some extra costs related to staff, but mostly for the development of IT support.
Maintenance HIGH: a Standard has to be updated frequently. For this to happen, constant research needs to be done. Also, the communication between the stakeholders has to be frequent. Maintenance costs in this case include high management costs. Also includes the costs to keep the standard in an online database and keep track of the “customers”. Staff costs in the maintenance phase includes the researchers and administrative staff that could either be part of the project or recruited specially for this task.
MEDIUM: as the cost assessment is done with a three-year timeframe in mind, it is reasonable to include the handover of management from the founder companies to the new company. This includes new offices, increasing the maintenance costs considerably. The running operations of the Joint Venture will include the normal staffing and servicing of a company if the handover is done before the 3 years are up. If there is no handover, the maintenance costs will be absorbed by the founder companies.
MEDIUM: Some updates are needed for a passport system. Since a passport is created for communication rather than for continuous improvement, these costs are lower than those for a standard. If the passport needs to be complemented with a research and administrative office, then costs will escalate.
MEDIUM/HIGH: The Toolkit per se will probably need to be updated, and this will require staff and researchers that could be part of the founders’ companies. More marketing services will need to be hired than for the other options considering the newness of the ZERO-PLUS brand.
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Cost category Settlement Efficiency Standard Joint Venture Settlement Passport ZERO-PLUS Toolkit
Procurement MEDIUM: Probably transaction costs will be high due to long negotiations and unexpected variations on the development of the Standard. The costs of contracting for the Business Owners to establish the Standard tend to be low, but establishing contractual relations between the certification network can be tough.
MEDIUM: the cost of contracting first between the stakeholders to create the new Joint Venture, and later between the Joint Venture and its clients are included in procurement costs.
LOW: There is no reason to believe procurement and transaction costs would affect the development of this option, as it will basically be an information tool for developers and users.
LOW: Unless the Toolkit is sold including a performance goal, there is no need to incur higher procurement costs than those from using a template contract between members or the selling of a product.
Revenue UNKNOWN: the savings of a Standard and economic benefits would be felt by developers and technology providers rather than by the consortium of ZERO-PLUS. The Standard will deliver revenue in the form of more investments and savings in the energy bill for entrepreneurs and customers, providing a general economic benefit.
HIGH: Revenue generated from the selling of technology and provision of services, from design to performance monitoring.
UNKNOWN: the revenue stream is unknown and will depend on the marketing strategy and the identification of the use of the passport. Ideally the passport can be use by banks and developers to calculate mortgages, or by developers to market the settlements.
LOW/MEDIUM: Revenue can be generated from training and a subscription to an online platform to use the toolkit.
Functional Costs
IT Costs HIGH LOW MEDIUM HIGH
Staffing HIGH LOW MEDIUM LOW
Management HIGH MEDIUM MEDIUM MEDIUM
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7.2.2 Conclusion of the cost analysis
The ZERO-PLUS Toolkit is likely to be the less costly option, while also generating
revenue. The Joint Venture, although it has the possibility of generating more revenue,
also incurs higher costs, especially if the new company is handled as a totally separate
company from its founder’s companies. This will escalate costs. The settlement
passport and Standard are the most costly and would require the development of a
model for revenue generation.
7.3 Risks
Risks were identified following the risk areas described in Table 10 .
Table 10 Risks areas. Source: (Gambles, 2009)
Risk Area Risk to consider
Technology Risk that it will not work, either at all or as well as intended. How complex or novel is the technology involved? Have the required applications run off the planned infrastructure before?
Business Process
Risk that developing new processes will take longer and/or consume more resources than expected. Have the necessary business processes already been developed elsewhere, and is there any access to the relevant expertise?
People
Risks associated with staff retention, recruitment, morale and performance. Does the organisation have the skills it needs to implement the project and realise the benefits? Will there be a dip in business performance as a result of staff changes or loss of focus?
Stakeholders Risk that stakeholders will block or damage this option. What political or industrial relations factors need to be considered? Are there vested interests which may generate active or passive resistance?
Legality Risk of legal challenge. Particularly if options involve closure of facilities, planning applications, redundancy, relocation, or material changes to staff terms and conditions, legal risks should always feature.
Time/Cost Risk of estimating errors or overruns. Particularly in areas which sensitivity analysis suggest are important to business case decision, how likely is that the basis of the decision will turn out to be flawed?
External
Risk of changes in the wider environment for the decision. Consider political, economic, tax, environmental, planning, and security factors. Is the project controversial, and if so does the organisation have the appetite to sustain implementation when the going gets tough?
Market
Consider competitive and market risks, particularly if the project is to create goods or services for sale. Is there a risk that new products or changed market conditions might render your market research invalid by the time your offer is ready?
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For each of these risk areas, we have identified specific concerns for ZERO-PLUS.
Due to the different natures of the options being analysed, different risks are relevant
for each option.
Technology: the main risks that would prevent the options to succeed, from the
technology area identified were first, risks related to the need for integration of
innovative technology to the building, second, the need for the offer to provide
solutions for different climate regions, and lastly finding a suitable online platform
that will be needed for some of the options.
Business Process: In the Business Process area, the main risks identified were the
risk of having to find a suitable methodology for developing a standard, the difficulty
of predicting how long it will take to develop a standard and the related lack of clarity
on costs.
People: In the people’s risk area the uncertainty related to the need for the
development of a certification network is seen as a unavoidable risk. Other risks
identified were the need to take on specialized staff, staff competition between
parent companies and the Joint Venture and awareness of staff dealing with the
innovative concept of ZERO-PLUS.
Legal: All options have the legal challenge of obtaining intellectual rights and
patents for the items developed within ZERO-PLUS by different partners. This issue
needs to be addressed as soon as possible to avoid future problems. Secondly,
procurement policies of the organisations potentially involved need to be examined
for their compatibility withthe creation of the Joint Venture.
Market: The major risks from the market are the uncertainties related to the creation
of a new brand, the need to do market research regarding the interest in the service
or product offered, and most commonly, competitors.
External: The principal risks in the external area are the possibility of EU policy
changing and the non inclusion of national regulations. In some options, national
and local regulations are needed for compliance and for planning permits.
Stakeholders: As regards stakeholders, the risks are lack of interest for the option
as a whole, the possibility of losing the power to take decisions due to lack of
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knowledge9, lack of external validation from stakeholders that are not part of the
ZERO-PLUS project.
Time/Cost: the main risks as regards this category are related to the
mismanagement in economic terms that could led to the shortfall in revenue for the
different stakeholders that conform the organisation that leads the Passport or
Standard. This issue was raised in the cost assessment previously. There is a
general possibility for every business of not achieving revenue generation. The Joint
Venture is not risk free of this possibility. In any case, the Joint Venture option will
need more investment than other options to set it up.
People: in this area, the risks identified are related to staff recruitment, especially
for the development of a certification network. This risk in both, the Settlement
Efficiency Standard and the Settlement Passport is considered as high, and there
are no mitigation actions that could be taken in the short term.
7.3.1 Risk Profiles
In the following paragraphs, we describe the risk profiles of each of the options
analysed. The risk analysis method followed here resulted in each option having a pre-
mitigation and post-mitigation risk score, with a higher score indicating higher risk. All
options have similar total risk scores pre-mitigation, while the post-mitigation score for
the settlement efficiency standard remains higher than that of the others. The complete
risk profiles including the description of each risk, can be seen in Annex IV.
Toolkit
Pre-mitigation score Post mitigation score
109 (60%) 59 (33%)
The main risks identified are a shortage in objectives, national regulations,
shortcoming of benefits and shortfall of revenues. The mitigation strategies almost
9 If there are no professionals to channel the standardisation process, either the standard will follow
ISO or CEN norms or someone will need to be trained.
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halved the risk score. There are no risks that remain unacceptable after the mitigation
strategies.
Settlement Efficiency Standard
Pre-mitigation score Post mitigation score
109 (60%) 82 (45%)
The main risks identified are a delay due to methodology uncertainty, lack of
certification network, lack of market interest and competition. All of the main risks are
able to handle with mitigation actions, except from the lack of a certification network,
that remains as a high risk. This option has the highest post mitigation risk score from
the four options.
Settlement Passport
Pre-mitigation score Post mitigation score
107 (59%) 64 (35%)
The risk profile of the Settlement Passport is very similar to the Standard. The Passport
option also contains the high risk of lacking a certification network. Other risks are the
uncertainty of revenue streams and competition. For the first risk, an early involvement
of financing institutions such as Banks and Big developers was proposed in order to
link the passport with the possibility of cheaper mortgages or easier loans, and
marketing strategies. As regards competition, one solution might be to target the
market as a B2B.
Joint Venture
Pre-mitigation score Post mitigation score
109 (60%) 66 (36%)
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This option is somewhat less risky than the others. The main risks identified are the
integration of innovation, procurement policies of the Joint Venture partners, patents,
and the uncertainty of revenue. The last one is considered a normal risks when a
company is created. Mitigation actions were considered for every option, except for
the risk of changes in European Policy, as it represents a very low possibility in the
short term.
7.3.2 Conclusion
While before risk mitigation all options have similar scores, after mitigation only the
standard has a higher score than the others, although the difference is small. This is
because mitigation actions can deal with all risks in the short or medium term, while
establishing a certification network represents a very tough task. Both, the Passport
and the Standard have this problem. The reason why only the standard has a higher
post-mitigation score is because the final score is the sum of the individual scores,
therefore, even the highest single score and still difficult to mitigate, impacts relatively
little in the overall score.
7.4 Deliverability
An implementation timetable for each option is considered in this section (see Figure
17). The time frame chosen was 5 years.
Each option was analysed according to 9 business development activities. These are:
Define scope: this activity refers to the planning of objectives and the
precursory research that is needed to sustain the Business Plan.
Internal Stakeholder Management: this activity encompasses the management
of the stakeholders’ different interests, including pre-procurement discussions
as well as intellectual property.
External Stakeholder Management: this activity contains the discussions
needed for external validation, as well as contacts with the market and
prospective clients.
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Training: the main activities developed under training include staff training, as
well as developing a network of certifiers and an e-learning portal.
Recruitment: Recruitment is the ongoing process of acquiring talent for the
operation of the selected option.
Procurement: Under procurement fall the initial procurement between partners
and how the business relations are established between the option and its
customers.
Establishment: this activity relates to the time taken into account when
analysing costs and considers all those sub activities that need to happen in
order for the company to start operating, for example, internal procedures and
policies.
Operations: Is the proper economic activity, when the service or product is
offered and the option enters the market.
Monitoring: The monitoring activity refers to the monitoring of the performance
of the option according to the parameters that are established between
stakeholders.
In Figure 17, time is divided into semesters. In semester 4 (crosshatched in the Figure)
the Business Plan (BP) will be delivered.
Time in semesters (Up to month)
1
(1/18)
2
(7/18)
3
(1/19)
4
(7/19)
BP
5
(1/20)
6
(7/20)
7
(1/21)
8
(7/21)
9
(1/22)
10
(7/22)
Settlement
Efficiency
Standard
Define Scope
Internal Stakeholder
Management
External
Stakeholder
Management
Training
Recruitment
Procurement
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Time in semesters (Up to month)
1
(1/18)
2
(7/18)
3
(1/19)
4
(7/19)
BP
5
(1/20)
6
(7/20)
7
(1/21)
8
(7/21)
9
(1/22)
10
(7/22)
Establishment
Operations
Monitoring
Joint
Venture
Define Scope
Internal Stakeholder
Management
External
Stakeholder
Management
Training
Recruitment
Procurement
Establishment
Operations
Monitoring
Settlement
Passport
Define Scope
Internal Stakeholder
Management
External
Stakeholder
Management
Training
Recruitment
Procurement
Establishment
Operations
Monitoring
Toolkit
Define Scope
Internal Stakeholder
Management
External
Stakeholder
Management
Training
Recruitment
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Time in semesters (Up to month)
1
(1/18)
2
(7/18)
3
(1/19)
4
(7/19)
BP
5
(1/20)
6
(7/20)
7
(1/21)
8
(7/21)
9
(1/22)
10
(7/22)
Procurement
Establishment
Operations
Monitoring
Figure 17 Implementation timetable
7.4.1 Implementation plan profiles
Options are ranked from 1 to 4 according to implementation time, 1 being the most
appealing option as regards implementation time.
Settlement Efficiency Standard
Rank: 4
The implementation plan for the Settlement Efficiency Standard has the most distant
start of operations, and the most intensive establishment phase. This makes this
implementation plan the least attractive from a time perspective. Moreover, external
stakeholders need to be involved earlier than in the other options, and before the scope
is defined. Estimated start of operations is the end of 2022, with a high probability of
delays.
Joint Venture
Rank: 2
The particularity of the Joint Venture implementation plan is that procurement needs
to be discussed among the partners, before establishment of the joint venture. If
successful, this option could deliver major revenue streams for participants. Therefore,
internal procedures and intellectual rights need to be addressed as soon as possible,
even before the Business Plan is finished. External Stakeholders can be managed
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before the start of operations, using parent organisation channels to start testing the
idea of the new company. Possible start of operations: 2021.
Settlement Passport
Rank: 3
The Passport option follows a similar implementation plan as the Standard, but needs
less time to become established. This is because there is less need to obtain external
validation. The passport option is thought to be less focused on compliance with
policies and regulations, and more related to marketing and finance. For this option,
training would ideally start before the start of operations, so as to have a minimum
number of professionals that know how to fill in the passport. An estimated start of
operations is in 2022.
Toolkit
Rank: 1
The toolkit option has the advantage that it can start with the procurement and
establishment phases before the Business Plan, and as soon as the main components
of the tool, the outcomes of ZERO-PLUS, have been adapted for commercial use. After
that, the main activities needed are more to do with software and its issues, as well as
establishing marketing. Overall, this option has one of the earliest operations start
dates. Training and recruitment activities can also be done in advance, as the
monitoring of business KPIs. The estimated start of operations for this option is the
second half of 2020.
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8. Option Analysis: Attractiveness and Achievability
In the previous sections, we have looked separately at each of the main aspects
influencing the attractiveness and achievability of the four options we have chosen to
analyse in depth: benefits, costs, risks and implementation time. In this section, we
analyse the options by comparing the four aspects for each of them. The main results
of the options analysis are summarised in Table 11.
Table 11 Option analysis summary
Attractiveness Achievability
Benefits (%)
Costs Risks (%)
Deliverability (Implementation time)
Settlement Efficiency Standard
72% High 45% Long
Joint Venture 54% Medium 36% Medium-low
Settlement Passport 53% Medium-high
35% Medium
Toolkit 70% Low 33% Short
The settlement efficiency standard has high benefits but also high costs, high risks and
would take the longest implementation time.
The joint venture and the settlement passport have relatively low benefits. However,
the joint venture does so with medium costs and medium term implementation time. It
also has a low risk score.The settlement passport, on the other hand, needs medium-
high investment costs and a longer implementation time than the Joint Venture or the
toolkit to start operations.
At last, the toolkit seems to achieve big benefits, in a shorter period of time, with low
risks and low costs.
Figure 18 gives a visual representation of these results, where for each of the four
aspects analysed a greater distance from the center means a more desirable result.
The figure illustrates that while the benefits of the Settlement Efficiency Standard are
potentially the greatest, overall the toolkit comes out best.
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Figure 18 Option Analysis summary
8.1 Attractiveness and Achievability Indexes
The final stage in the option analysis is, as described in Section 2, the creation of an
Attractiveness-Achievability chart. In order to show the results in the Attractiveness -
Achievability graph, we normalised the ratings of each parameter, as described below:
1. Achievability index: the index is formed by the risk index and a deliverability
index, with a weight of 0.5 each sub index.
a. The risk index is formed as follows: The scores shown in
b. Table 9 were normalised to a score out of 5, with 5 being equal to the
maximum possible figure of 180.
c. The deliverability index is a scale from 1 to 5. Each option is given a
score according to if they can deliver before the end of the Project (5).
At the end of the project (4), just after the end of the project (3), within
a year of the project end (2), or more than a year from the project`s end
(1).
Benefits (farther fromcenter - higher benefits)
Costs (farther from center- lower costs)
Risks (farther from center- lower risks)
Deliverability (fartherfrom center - shorter
delivery time)
Settlement Efficiency Standard Joint Venture Settlement Passport Toolkit
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2. The attractiveness index is formed by the cost index and the benefits index
with a weight of 0.5 each.
a. Cost index: each option was given the lowest score from the following
scale:
i. Low- (8-10),
ii. Medium-Low (6-7),
iii. Medium (5),
iv. Medium-High (4-3),
v. High (2-1).
b. Benefit index: The number of benefit points for an option out of a
maximum of 1000
8.2 Attractiveness
Measuring attractiveness means, understanding the relation between benefits and
costs. In the graph below (see Figure 19), the options that are higher and to the right
(i.e. the options that have the highest benefits or the lowest costs) will determine the
attractiveness frontier. In this case, the graph shows that the joint venture and the
0
200
400
600
800
1000
0 1 2 3 4 5 6 7 8 9 10
Ben
efit
s
Cost Indext
Attractiveness
Settlement EfficiencyStandardJoint Venture
Settlement Passport
Toolkit
Figure 19 Attractiveness of the options for the Zero Plus BC.
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settlement standard define the attractiveness frontier. The area up and to the right of
the frontier includes all the options that are attractive. The Settlement Efficiency
Standard, which provides the highest benefits, has also the highest cost of
implementation (represented by a low-cost index). This is why the option is less
attractive than the toolkit and the joint venture. The settlement passport is the only
option that would be discarded for its low attractiveness, since it has low benefits
combined with a relatively high cost.
8.3 Achievability
In the case of achievability, we measure risk and implementation time (deliverability
index). As seen in the graph (see Figure 20), the toolkit and the settlement passport
would be the two more achievable options. We need to understand that, although the
passport looks like one of the options that would define the achievability frontier, the
option has some risks that couldn’t be mitigated. Therefore, the second best option for
risk, the joint venture, replaces the passport as the best option from a risk point of view.
In any case, we decided to drawn a diagonal line to show that the toolkit, amid the risk
issues with the other options, is still the most likeable option to achieve its goals in the
determined period of time.
Figure 20 Achievability graph
0
1
2
3
4
5
6
012345
Del
iver
abili
ty I
nd
ex
Risk index
Achievability
Settlement Efficiency Standard
Joint Venture
Settlement Passport
Toolkit
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9. Conclusion: comparison of the options
The graph below (see Figure 21) represents the interaction of the achievability index
and the attractiveness index. The graph shows the four options selected for the
analysis, and how they performed in the two indexes. The graph helps understand
which options would be better to choose to continue with the business case.
Three alternatives are explained for the option analysis in the short term. The first
alternative, shows that the best options are the settlement efficiency standard (the
option with the highest attractiveness index) and the toolkit (the option with the lowest
achievability index) (see Figure 21). The achievability index is most beneficial as low
as it can get. In this case, the toolkit gets a negative score meaning it is the most
achievable.
Figure 21 Achievability & Attractiveness Graph.
1
2
3
4
5
6
7
8
9
10
-2-101234567
Att
ract
iven
ess
Ind
ex
Achievability index
Achievability & Attractiveness
Settlement Efficiency Standard
Joint Venture
Settlement Passport
Toolkit
AB
C
D
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The main drawback of this alternative for the selection of the preferred option is that
the Settlement Efficiency Standard (point B) is the least interesting option in terms of
achievability.
In the second alternative, the Settlement Efficiency Standard was excluded due to the
high score in the achievability index. With this option removed, the options from where
to choose, are reduced to the second best in terms of attractiveness. In this case, the
Toolkit (A) is considered the first option in both achievability and attractiveness.
In a quest to give the BC owners with options, a third alternative is analysed to
determine the second-best option after the Toolkit. Between the Settlement Passport
(C) and the Joint Venture (D) there are no big differences in terms of achievability or
attractiveness, as seen in the graph and index performance. Both options are in the
middle range, and perform better than the Standard in terms of achievability.
The Settlement Passport, although, has a major inconvenience that is not reflected in
the index performance. The implementation time for it, may incur delays due to the
unavoidable risk of not being able to develop network for certification.
The Settlement Efficiency Standard and the Settlement Passport, therefore, are
options that will better be considered in the long run. The Toolkit and the Joint Venture,
on the other hand, represent the first and second best options. This means that the
implementation of the latest’s, have the most chances to get the most benefits, with
the less costs, less risks and in the less time frame.
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10. References
Accounting tools. (2017, February 16). Types of Constraints. Retrieved from Accounting Tools:
http://www.accountingtools.com/types-of-constraints
Active House. (2013). Active House: the specifications 2nd Edition. Brussels: Active House.
Ballard-Tremeer, G. (2016). Stakeholder analysis. London: E Co.
Bearing Point. (n.d.). Measuring innovation. Retrieved January 20, 2017, from
http://www.bearingpoint.com/ecomaXL/files/Innovation_High_Res.pdf
Business Case Studies. (2017, February 16). Strategy Theory - Constraints. Retrieved from
Business Case Studies: http://businesscasestudies.co.uk/business-
theory/strategy/constraints.html#axzz4YrHWkWEj
Commission, E. (2004). Aid Delivery Methods. Volume 1: Project Cycle Management Guidelines.
Brussels: EuropeAid Cooperation Office.
Constructing Excellence. (n.d.). Chapter 16: Key performance indicators and benchmarking.
Retrieved January 20, 2017, from
https://www.ons.gov.uk/ons/rel/construction/construction-statistics/no--11--2010-
edition/chapter-16---key-performance-indicators-and-benchmarking.pdf
European Commission. (2004). Aid Delivery Methods. Volume 1: Project Cycle Management
Guidelines. Brussels: EuropeAid Cooperation Office.
Gambles, I. (2009). Making the Business Case: Proposals that Succeed for Projects that Work
(978-0-7546-9427-4 ed.). Gower.
Investopedia. (2017, January 1). Efficient Frontier. Retrieved from Investopedia:
http://www.investopedia.com/terms/e/efficientfrontier.asp#ixzz4VYjQvkWd
Isaac, M., Pana Tronca, L., & Gajsak, M. (2016). Market analysis of trends in the contrsution of
residential highly energy performing buildings. London: ECo.
Oxford Dictonaries. (2017, February 3). Definitions of Drivers. Retrieved from English Oxford
Living Dictonaries: https://en.oxforddictionaries.com/definition/driver
Proactis. (2017). Procurement Efficiency – Top 3 KPIs for Process Improvement. Retrieved January
20, 2017, from http://www.proactis.com/About-Us/Blog/2015/September-
2015/Procurement-Efficiency-%E2%80%93-Top-3-KPIs
Rawlins, B. L. (2006). Prioritizing Stakeholders for Public Relations. Gainesville: Institute for Public
Relations.
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Annex I EU Horizon 2020 Projects
IDEAS10
Objective: The IDEAS project aims to illustrate how communities, public authorities,
and utility companies across the EU can be engaged in the development and operation
of energy positive neighborhoods and the economic and environmental benefits of
doing so. Start of the project: 2007, end of the project: 2013.
Methodology: To this end, IDEAS will demonstrate how energy positive
neighborhoods can be cost effectively and incrementally implemented by designing,
testing and validating:
Products:
a neighborhood energy management tool to optimise energy production and
consumption;
user interfaces that engage communities and individuals in the operation of
energy positive neighbourhoods;
a decision support urban planning tool to optimise the planning of
neighbourhood energy infrastructures;
business models to underpin energy positive neighbourhoods that engage end
users, public authorities, and utility companies.
Business models: The IDEAS project has developed business models to enable
existing companies with expertise in the energy industry to evolve into a new type of
service provider. We called this new type of service provider an Energy Positive
Neighbourhood Service Provider (EPNSP).
Earlier research, conducted as part of the IDEAS project, developed business models
for EPNSPs tailored to the requirements of the key stakeholders at the project pilot
sites in France and Finland. These business models have two key ‘revenue streams’
which represent the source of profits for an EPNSP:
10 http://www.ideasproject.eu/
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1. Energy arbitrage and efficiency gains obtained through optimising the production,
storage/retrieval, and selling of local renewable electricity and heat production.
2. Integrated Energy Contracts (IEC) which combine energy efficiency and renewable
energy supply and management in large buildings and groups of buildings in the same
locality owned by the same organisation.
INTREPID11
Objective: INTrEPID is an FP7-ICT project that aims to develop technologies that will
enable energy optimization of residential buildings, focusing initially on the optimal
control of internal sub-systems within the Home Area Network (HAN), but then also
providing adequate mechanisms for effective interaction with external world, including
other buildings, local producers, or electricity distributors, enabling energy exchange
capabilities. Start of the project: 2012, end of the project: 2015.
Methodology:
Developing advanced monitoring and diagnostics concepts and ensuring that
the achieved savings are sustained over long periods of time without being
degraded by deteriorated performance of both mechanical equipment and the
monitoring and control system itself;
Developing supervisory control strategies and energy district management
capabilities able to coordinate larger subsystems (heating, ventilation, air
conditioning, lighting, renewable energy generation, thermal storage, etc.) and
orchestrate operation of the numerous devices in such systems;
Supporting inter-building energy exchange. An energy brokerage component
has been developed to communicate directly with other buildings and local
producers to negotiate possible use of the electricity produced locally on their
premises in order to increase interoperability of buildings and to address the
challenges related to deployment of future Smart Grid concepts and
technologies;
11 http://cordis.europa.eu/project/rcn/105992_en.html
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Involving actively the pilot users as a key part of an Internet Of Things (IoT)
energy management system.
Products:
Embedded intelligent systems and middleware technologies for integration of
heterogeneous data coming from sub-meters and sensor networks will be developed
with the purpose to efficiently monitor and control appliances and sub-systems in
buildings/homes, and increase their energy efficiency.
These technologies will enable optimization at different levels:
Device level: optimization of individual devices energy consumption supported
by continuous monitoring and diagnostics to detect deteriorated performance.
Devices considered include white goods and AV equipment.
Home/Building level: optimization through the coordinated control of local
consumption, generation and storage devices.
District level: optimization through the ability to perform energy exchange with
other participants connected to the electricity grid.
Business cases: The project identifies BC with the three major area of interests.
These are described using e3value diagrams (http://e3value.few.vu.nl/). Each Business
Case includes: a description, roles, description of value flows, diagram, additional
scenarios, use cases (functional scenarios).
Customer awareness: in this case the end user, the consumer has an interest in
receiving information about his/her energy consumption.
1. The consumer gets energy from Energy Provider in exchange for money.
2. Energy Provider pays to Meter Data Collector to get the information about
Consumer’s consumption for billing purposes.
3. Analytics Service Provider pays a fee to the Energy Provider in order to participate
in the solution, i.e. to be able to offer services to the Consumer.
4. Analytics Service Provider processes consumer data received from Meter Data
Collector.
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5. The consumer receives information on potential energy savings from Analytics
Service Provider in exchange for a subscription fee.
Control of energy consuming devices: In order to decrease the energy
consumption, INTrEPID has to be able to affect the behavior of energy
consuming devices. This includes both offline and online scheduling of devices
as well as on-demand remote control of the devices by the end user.
Energy retailers /ESCOs-provided services: the Energy Broker would be the
central actor and would act as a medium for the other actors to interchange
energy and cash flows.
ORIGIN12
Objective
The primary objective is to demonstrate significantly increased uptake of locally
installed embedded renewable generation, and associated carbon dioxide emission
reductions, via the use of the ORIGIN smart ICT architecture. Start of the project:
2012,end of the project: 2015.
The ORIGIN project is supposed to provide communities with an energy management
tool to monitor and orchestrate energy consumption and generation on a community
level.
O1: Develop the ORIGIN smart ICT architecture and deploy it in each of the
three validation communities (Damanhur, Findhorn Foundation Community,
Tamera).
O2: Evaluate and demonstrate the acceptability of the ORIGIN approach to
end users.
O3: Demonstrate significant increased uptake of locally generated renewable
energy in each of the validation communities.
O4: Define and deliver a transferable implementation process
O5: Define a range of appropriate business models for energy-aware
communities
12 http://www.origin-energy.eu/
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O6: Widespread dissemination of project results.
Methodology
The ORIGIN system will address the mismatch between energy supply and energy
demand by integrating consumption and generation subsystems on a neighbourhood
or community scale. In brief, ORIGIN’s advances beyond the state of the art can be
summarised as the following list of distinct elements, while a key advance in itself is
the integration of all these elements within a single solution:
Prediction of energy demand at both individual building and community levels;
Prediction of renewables supply;
Optimisation to deliver control actions and suggestions;
Development and deployment of a hierarchical coordination structure to
organize and enable community level energy demand coordination;
Empowerment of residents, occupants, and facilities managers with clear and
rich information about current usage, predicted demand, and predicted
availability of renewable, along with justified suggestions for behaviour and
control actions.
Methodology for economic outreach
A central element of the report is the selection of an appropriate business model
opportunity and its detailed elaboration on behalf of the communities involved. The
project team used the Canvas approach to identify promising business opportunities
for communities and public utilities which as small utilities often take care of the energy
supply for citizens of a small municipality. With a SWOT approach each business
model was evaluated and assessed by applying a score model. The most appropriate
business models are the informational demand response model which is already
valuable today and the actuation demand response model. The actuation model which
considers dynamic tariffs is especially interesting for utilities with experience in the
energy generation and distribution domain. For other actors it is not applicable.
Furthermore, these business models may be combined with the business model for
forecasting renewable energy prediction. The next step is to test and evaluate the
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informational demand response model and the actuation demand response models in
the three communities. The economic evaluation will take place from the point of view
of the Findhorn community as its local characteristics offer a significant adaptability
potential to other communities and small municipalities within Europe.
Products
The project provides a solution for providing prognoses of load and generation,
“knowing” local flexibilities (e.g. controllable loads) and scheduling the operation of
flexible units. It can also be used to generate incentives (e.g. via flexible tariffs) for the
members of the communities.
The first one is an informational demand response system by including the
opportunity to extend it to an actuated demand response system as soon as
dynamic tariffs become more attractive for end customers.
The second business model is the prediction of renewable energy generation.
Hence, the ORIGIN Joint Venture will be established to commercialize these
two business models.
Business Case
The project established a Joint Venture between the participant members. The project
team favors a contractual JV instead of an equity based JV agreement. As long as the
ORIGIN system is not evaluated the risk of establishing an equity based JV is quiet
high since the efforts to shape the ORIGIN CEMS for real market applications are still
unknown.
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ANNEX II Survey
This survey is being carried out by E Co. to collect information for the work of WP8:
Market analysis and model for business growth. In this WP we are now developing a
business case for the application of the technologies and processes developed in the
ZERO-PLUS project.
The business case will help us to make a decision on a product or service for which
we will develop a business plan. The business case (BC) will analyse the different
opportunities and choices, and the benefits, costs and risks of a number of options
selected for analysis.
Start press ENTER
1. Which ZERO-PLUS partner organisation are you representing?
2. Please consider products or services that could grow out of the ZERO-PLUS
project. Rate how important the following potential benefits of such a product
or service are for your organisation on a scale of 1 to 5, with 1 being not
important at all, and 5 being very important.
Benefits: In this context, benefits are the positive outcomes the ZERO-PLUS partners
are looking for from a product or service that could grow out of the ZERO-PLUS project.
a. Contributing to high quality research, innovation and constant improvement of
processes in the construction industry
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b. Contributing to high quality research, innovation and constant improvement of
processes in the construction industry.
c. Increased sales of energy efficiency products or services, through reducing
costs for end users (economies of scale)
d. Demonstrate the readiness of products and processes that are part of the
ZERO-PLUS concept.
e. Enhance the reputation of participants.
f. Provide a clear roadmap for achieving compliance with European regulations
for energy efficiency in buildings.
g. Improve the quality of service to customers that would use or buy a ZERO-
PLUS service or product.
h. Integration of the construction supply chain.
i. Increase awareness of sustainability in the construction industry.
j. Energy savings by users of the final product or service.
k. Energy security of users of the final product or service.
l. Are there any other benefits you would add? please type them here and grade
the importance of each one from 1 to 5 using brackets
3. What factors (constraints) might prevent the service or product that might come
out of the ZERO-PLUS concept from achieving its goals?
a. Availability of finance
b. Availability of skills and labour
c. The market is saturated
d. Materials of supply limitations
e. Internal limitations to collaboration between the ZERO-PLUS partners
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f. Legal constraints such as labour law, industry regulations or intellectual
property
g. Lack of demand for the products or services
h. Time constraints such as delays in the implementation
4. In your opinion, what product(s) and/or service(s) could best take the ZERO-
PLUS concept forward? Please explain.
5. You are a:
Research Partner
Technology Partner
Case Study Partner
6. (Only to Technology providers) Competitors: In the questions below, please note
up to three main competitors of your organisation and what you see as their
most important added value.
We are asking this because in our deliverable, in order to develop the business case
we will also be looking at the main competitors.
Name of competitor - Added value of competitor - Comments
7. (Only to Technology providers) Below, please define up to 3 Key Performance
Indicators that your organisation uses to assess the performance of the product
or service that you provide, compared to that of competitors.
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8. (Only to Case Study Partners) In your experience, what are the 3 main categories
of direct costs in a project constructing an energy efficient settlement (For
example, materials, labour, expenses, transport, etc).
Separately to the development of the business case, in WP8 we are also analysing the
market potential for new residential energy efficient settlements in the EU. In this
deliverable, we will analyse costs in the construction industry, as well as the different
roles in procurement within project developers.
9. (Only to Case Study Partners) In your experience, what are the main categories of
transaction costs that affect the construction of energy efficient settlements?
Here we understand transaction costs as being a cost incurred in making an economic
exchange of some sort. In other words, the cost of participating in a market.
10. Are there any other comments you would like to make that will assist us in
developing the business case and analysing the market potential?
Thank you for your time, we will see you in Palermo
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ANNEX III Risk Tables
For each risk, a impact and probability score was given. After, a mitigation action was
proposed. In some cases, there weren’t mitigation actions that could handle the
identified risks. A new score post mitigation was allocated to each risk. Each option
has a pre and post mitigation strategy score. For the Toolkit see Table 12, for the
Settlement Efficiency Standard see Table 13, for the Settlement Passport see Table
14, and for the Joint Venture see Table 15.
Table 12 Risk analysis for the Toolkit
No Risk area Risk title Description Impact (out of
10)
Probability (out of 10)
Score (out of 20) Mitigation approach
Score after
mitigation (out of
20)
1 Technology Innovation Integration
Innovative technology from the project is difficult to integrate in buildings.
6 7 13
When selecting technologies, evaluate for ease of integration. Train experts on how to integrate the technology.
8
2 Technology Online
platform
Possibility of not finding a suitable platform and software to sustain the toolkit and maintain it.
7 2 9
Select easy to manage software and have a team dedicated to support the website platform.
4
3 Business Process
Not achieving objectives
The toolkit don’t lead to its objectives
9 5 14
Order a third party to certify the quality of the procedures the toolkit proposes.
8
4 Legal National
regulations
The toolkit doesn’t adjust to national or local regulations on construction making construction illegal
7 7 14
Work with clients to develop recommendations that are in agreement with
regulations
3
5 Legal Intellectual
Property
Partners that don’t participate hold property rights of some technology or project development
9 4 13
Ensure that any proposed toolkit does not depend on
tools owned by non-participants
9
6 Market Competition
There are other toolkits for Energy efficient settlements
6 4 10
Marketing to clarify the positioning of the toolkit
and how it is different from other existing solutions
4
7 External EU CO2
objectives
The EU lowers ambition of CO2 reduction targets
6 1 7 NA 7
8 Stakeholders Shortcoming of benefits
Stakeholders don’t get the benefits that they expect and want to exit
7 7 14 Hold regular meetings between stakeholders and create an exit strategy
8
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No Risk area Risk title Description Impact (out of
10)
Probability (out of 10)
Score (out of 20) Mitigation approach
Score after
mitigation (out of
20)
the toolkit business
9 Time/Cost Shortfall of
revenue
The toolkit don’t generates enough revenue to break even from investment
9 6 15 Hold regular meetings between stakeholders and create an exit strategy
8
109
59
Pre-mitigation risk score: 109 out of 180 (60%)
Score after mitigation: 59 out of 180 (33%)
Risk analysis for the Settlement Efficiency Standard (Table 13)
Table 13 Risk analysis for the Settlement Efficiency Standard
No Risk area Risk title Description Impact Probability Score
(out of 20)
Commentary/mitigation
Score after
mitigation (out of
20)
1 Technical Geographical
inclusion
The Standard has a limited
geographical application
4 8 12 Study the possibility to expand the climatic regions to more than 4.
10
2 Business Process
Time extension
Development of a standard is time consuming.
6 9 15 Get an early involvement of a standard expert
11
3 Legality Patents
Problems of ownership of the patent of the Standard
6 3 9
Establish a group work to solve differences
between ZERO-PLUS partners.
7
4 Market Lack of interest
Difficulty breaking into the market
9 5 14
Organize dissemination activities and industry members to understand the ZERO-PLUS approach.
9
5 Market Competition
Competition from other standards like Passive house or Active house
6 8 14
Explain as the value proposition how the
settlement level approach is an advantage compared to the building level approach of existing
standards
7
6 Stakeholders Stakeholders
decision making
The lack of internal expertise in managing a Standard would make the stakeholders
6 3 9 Train Stakeholders on Standards and methodology
6
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No Risk area Risk title Description Impact Probability Score
(out of 20)
Commentary/mitigation
Score after
mitigation (out of
20)
relegated in the decision making
7 Stakeholders External
Validation
The Standard doesn’t get enough external validation
7 5 12 Get early involvement from ISO and the ESB
10
8 People Specialized
Staff
Lack of specialized staff on standards and quality procedures.
4 6 10 Define staff needs and start search at an early
stage 8
9 People Certification
network Lack of a network for certification
7 7 14
Certification can start with partners but it will take time to develop a network.
14
109
82
Pre-mitigation risk score: 109 out of 180 (60%)
Score after mitigation: 82 out of 180 (45%)
Risk analysis for the Settlement Passport
Table 14 Risk analysis for the Settlement Passport
No Risk area Risk title Description Impact Probability Score
(out of 20)
Commentary/mitigation Score after mitigation (out of 20)
1 Technology On-line portal
Impossibility of finding an online
platform that would fit the needs of the
passport
6 2 8 Establish platform 5
2 Business Process
Methodology uncertainty
Extension of time frame due to uncertainty of the methodology to develop a passport.
4 9 13 Get an early involvement of a standard expert
8
3 Business Process
Fail demonstration
of goals
The passport fails to demonstrate its use
7 4 11
Ensure a third party assessment before the Passport goes to the market
6
4 Legality Patents
Problems of ownership of the patent of the Passport
6 3 9
Establish a group work to solve differences between ZERO-PLUS partners
7
5 Legal National
regulations
Possible difficulty in developing on building passport
4 6 10 The Passport must include regional and national guidelines as
4
D 8.2 Analysis of the business case for the application of the technologies and processes developed in the project.
Page 109 of 110
that can be used in all EU countries
well as European regulatins
6 Market Lack of interest No one uses the passpot
8 3 11 Aim to link the passport to finance (mortgages) and marketig
8
7 Market Competition
and the existence of other passports
in the building level means that the market niche ZERO-PLUS must
focus on is the settlement level
7 8 15
Target the market as Bussines to Business to
increase the possibility of attracting big developers.
5
8 Time/Cost Uncertain revenue
Uncertainty of revenue stream
6 9 15
Early involvement of Banks and Big Developers. Possibility to include specifications for each customer.
6
9 People Certification
network Lack of a network for certification
7 8 15
Certification can start with partners but it will take time to develop a network.
15
107
64
Pre-mitigation risk score: 107 out of 180 (59%)
Score after mitigation: 64 out of 180 (35%)
Risk analysis for the Joint Venture
Table 15 Risk analysis for the Joint Venture
No Risk area Risk title Description Impact Probability Score
(out of 20)
Commentary/mitigation Score after mitigation (out of 20)
1 Technology Innovation Integration
Innovative technology from the project will be difficult to integrate.
6 7 13 Improve communication channels between project participants.
6
2 Legality Procurement
Internal Procurement policies from each partner can delay or cancel the creation of a Joint Venture
8 5 13 Organize procurement team meeting with project participants
7
3 Legality Patents
Stakeholders that decide not to participate wont give property rights to fundamental parts of the products or services the Joint Venture wants to market.
9 5 14 Establish a group work to solve differences between ZERO-PLUS partners
10
D 8.2 Analysis of the business case for the application of the technologies and processes developed in the project.
Page 110 of 110
No Risk area Risk title Description Impact Probability Score
(out of 20)
Commentary/mitigation Score after mitigation (out of 20)
4 Market Awareness
Target companies wont understand the value proposition, and therefore don’t buy the products or services.
8 3 11
Pay sufficient attention to marketing, starting with the sse of traditional marketing channels from each partner to promote the new product.
7
5 External Policy
Changes in EU regulations for some members state might change rules for business.
2 7 9 NA 9
6 Stakeholders Lack of interest
Some partners wouldn’t want to participate in something out of their core business
7 6 13 Develop a Business Strategy including revenue scenarios
8
7 Time/Cost Uncertain revenue
Uncertainty of revenue stream timeline
6 9 15 Establish a board that oversees the business strategy and cost analysis
10
8 People Staff
Competition
Shared staff between the Joint Venture and the parent companies don’t pay enough attention to the new business.
5 5 10 Establish minimum time allocation and performance objectives.
5
9 People Staff
awareness
Staff don’t understand the value proposition of the Joint Venture.
6 5 11 Train staff on the ZERO-PLUS concept.
4
109
66
Pre-mitigation risk score: 109 out of 180 (60%)
Score after mitigation: 66 out of 180 (36%)