City of Stockholm, Environment and Health administration
Sustainable cities
– Energy efficiency Renovation and its Economy
2015
Environment and Health administration
Energy centre & Sustainable Järva
Sustainable cities – Energy efficiency Renovation and its Economy
Authors: Agneta Persson and Katarina Högdal, WSP
Foreword
The City of Stockholm has high ambitions to reduce energy end use
and carbon dioxide emissions when retrofitting the existing housing
stock. However, it is not obvious how to motivate the profitability of
such projects and what requirements to apply for energy efficiency.
In order to learn from good examples, the project Sustainable Järva
and the Energy Centre at the Environment Department in the City
of Stockholm have commissioned a study of the renovation projects
that were part of the project Sustainable Järva as well as three
other renovation projects which received grants from the National
Delegation for Sustainable Cities. All four projects have implemented
comprehensive energy measures in connection with renovation.
The following projects are included: Svenska Bostäder’s projects
within the Programme Sustainable Järva; Örebro Bostäder’s project
My Green Neighbourhood, Umeå Bostad’s projects in Sustainable
Ålidhem and the tenant owner association (BRF) Hilda project in
Rosengård in Transformation.
The aim has been to follow up on a similar study done in 2012 where
the Sustainable Järva Project used only calculated values, and that
now in hindsight can highlight the economic aspect of energy efficiency in renovation. The study highlights how different calculation
conditions affect profitability of projects. The projects that have
monitored results have improved energy efficiency between 24 and
42 %, and the costs of energy efficiency measures vary between
7 and 59 % of the total investment. Five of the nine projects studied
have, despite this, a lower cost to save one kilowatt-hour than to
buy a kilowatt-hour. In all studied areas the aim has been to keep
rent increases moderate. To get the projects profitable requires a
2
Summary
holistic approach in which energy measures are implemented as a
complement to the complete renovation and among other things
is financed with surpluses from deferred maintenance and certain
rent increases. Property Owners place strong focus on the societal
benefits, which include both social and environmental benefits.
Social benefits of renovations could include for example reduced
crime, increased opportunities for older people to remain living
at home and reducing housing shortages. These aspects are difficult to evaluate in monetary terms in calculations. They normally
need to be evaluated qualitatively. Environmental benefits through
reduced energy end use are obtained in the form of reduced greenhouse gas emissions, etc. There are several different economic
values for reduced emissions.
The project leaders were Lisa Enarsson and Jan-Ulric Sjögren,
The Department of the Environment, City of Stockholm.
The assignment was carried out by Agneta Persson and Katarina
Högdal, WSP.
We want to express our gratitude to all of you who contributed with
your experience and knowledge to make this study possible.
• WSP has been commissioned by the of the City of Stockholm to report results, in
a comparative way, from the renovation of the four post-war building renovation
projects that received support from the National Delegation for Sustainable Cities.
The report should clarify the profitability criteria used for energy efficiency measures in connection with the renovation. The four redevelopment projects that have
been included in the assignment are: Sustainable Järva (AB Svenska Bostäder),
Sustainable Ålidhem (Bostadsbolaget AB, Umeå), My Green Neighbourhood,
Vivalla (Örebro Bostäder AB) and Sustainable Hilda (tenant owner association
Hilda in Malmö).
• This report is a continuation of the City of Stockholm’s report of the post-war
The Million Homes Programme (1965–1975 Swedish programme for one million
new homes) building renovation that was produced in 2012 by the ÅF Group on
behalf of the City of Stockholm’s Department of the Environment.
• This comparison shows that it is possible to achieve substantial energy efficiency
during in-depth renovations. Energy efficiency can, in a life cycle cost perspective, contribute to increased profitability for a renovation project.
• Small differences in the profitability calculations, such as small changes in the
chosen discount rate, can produce large differences in the calculations’ results.
It is therefore important to choose the conditions for profitability calculations
carefully, so that investment decisions taken are based on factors in line with
the property owner’s long-term operations.
Success Factors/Conclusions
• Consultation and dialogue with the residents are important to create acceptance
and trust. Involving the tenants, who often lack the knowledge and experience of
property management and energy efficiency measures that property-owners have,
requires greater transparency in the project.
• It is possible to improve the energy performance of listed buildings without
compromising their cultural value.
• It is important to not only look at the profitability of individual measures, but also
to be aware of what other aspects should be prioritized. Additional insulation of
the building envelope, for example, is rarely profitable as a stand-alone measure,
but can significantly assist in improving indoor air quality and increased tenant
satisfaction.
• To ensure that the desired energy efficiency is achieved, it is important to aim
at a reasonable level and to make accurate calculations. It is also important to
have good knowledge of the actual building’s technical capabilities. The desired
efficiency level should not be overly dependent on the tenants’ habits as they are
difficult to both predict and influence.
• It is possible to halve the energy end-use in buildings at reasonable cost,
but further energy reductions are often unprofitable.
• The economic feasibility of local electricity production through Photo Voltaics is
strongly dependent on the proportion of the electricity produced that can be used
in one’s own building. The greatest profitability is obtained if all the electricity
produced can be used in one’s own buildings.
Stockholm 25 May 2015
• Tenant owner associations have different preconditions than municipally
Gunnar Söderholm
Director, Environment and Health
owned property companies, when carrying out energy efficiency-renovations.
They can have more difficulties in creating a working project organization,
at the same time as their own ownership gives the residents a direct economic
incentive for reducing energy end use.
Gustaf Landahl
Head of Department Administration
Sustainable cities – Energy efficiency Renovation and its Economy
Sustainable cities – Energy efficiency Renovation and its Economy
3
Index
Background
Background...................................................................................................... 5
• The City of Stockholm has decided that the city should be fossil fuel free by
2040. Energy efficiency is important to achieve both that objective and to reduce
green-house gas emissions. The potential for energy efficiency is large in conjunction with the renovation of the existing building stock. The City of Stockholm’s
environmental programme states that energy end use after large renovations may
not exceed the national building code’s energy requirements for new construction.
Introduction..................................................................................................... 6
Methodology and definition of terms ....................................................... 7
What is a profitable investment?................................................................ 8
The City of Stockholm’s environmental programme for 2012–2015 states
that energy end use shall be reduced to a maximum level equating to the
maximum defined in the national building code’s norms for large-scale
renovation.
• The National Delegation for Sustainable Cities was appointed by the Govern-
ment for the period 2008–2012 to stimulate sustainable urban development. Their
mandate included, inter alia, to provide financial support to particularly interesting
sustainable cities projects. Four of the projects that received funding from the delegation were Sustainable Järva (Stockholm), My Green Neighbourhood (Örebro),
Sustainable Ålidhem (Umeå), and Rosengård in Transformation (Malmö). The
experience gained from these projects shows that there is a technical potential
to achieve the set targets for energy efficiency. However, the full potential is not
always achieved and opinions differ on the economic viability of the projects.
Svenska Bostäder – Järva ...........................................................................16
Örebrobostäder AB – my green neighbourhood.................................. 38
Bostaden AB – Ålidhem..............................................................................48
HSB tenant owner association BRF Hilda...............................................58
• In 2012 the City of Stockholm, assisted by the ÅF Group, studied the profitability
Analysis and conclusions............................................................................66
criteria used for energy efficiency measures in connection with renovation in
various pilot cases. The projects which were studied more closely were Backa
Röd, Brogården, Gårdsten and Sustainable Järva. The results were presented in
the Report – Economics of Renovation with Energy Investment. (Final Report,
15 February 2012). The present report presents the four pilot cases – Sustainable
Järva, My Green Neighbourhood, Sustainable Ålidhem and tenant owner associa­
tion (BRF) Hilda. This report has been prepared by WSP on behalf of City of
Stockholm.
References...................................................................................................... 76
• The assignment has been carried out by means of literature studies, interviews,
own analyses and calculations. The analysis is complex and requires a more
comprehensive basis than has been available. It has not been possible within the
framework of this study to provide exhaustive answers to all questions, but it is
hoped that it will provide an insight into the distinguishing features of the different
projects.
• The assignment has been carried out by Agneta Persson M.Sc. and Katarina
Högdal M.Sc. WSP Sverige AB.
4
Sustainable cities – Energy efficiency Renovation and its Economy
Sustainable cities – Energy efficiency Renovation and its Economy
5
Introduction
Methodology and Definition of Terms
• How does one judge what is profitable? It’s a simple question with a complex
• The starting point for this report was the report – The Economics of Renovation
answer. The issue becomes even more complicated if one includes long-term
environmental aspects such as the individual’s responsibility for climate change,
socioeconomic aspects of people’s living conditions and how to create greater
equality and reduced segregation.
with Energy Efficiency Goals – which was made by ÅF on behalf of the City
of Stockholm. The chapter entitled “What is a profitable investment” has been
retained with only minor changes. Other chapters have had major changes made
or are completely new.
• Politicians strive to bridge the gap between what is economic for society as a
• The actual results are described for those projects where monitoring was carried
whole and financially viable with different types of instruments, both taxes and
contributions and other types of instruments. Through research and development,
for example through the projects that the National Delegation for Sustainable
Cities has supported, further opportunities can be created.
out for at least one year. In other cases the expected result is described. Results
comprise energy performance, rent/fee increases and cost savings.
• The reported energy end use before and after renovation has been corrected for a
normal year according to the Degree-Day method.
• There is no single commonly agreed method for how to assess the profitability
• Information on energy performance and rent/fee increases has been taken from
of different investments. This can create ambiguity and confusion. How do you
compare the payback with a yield valuation, life-cycle costing or impact on the
yield?
the respective property owners. An average price of 1.1 SEK/kWh (~0.12 €/kWh)
has been used for the calculation of energy cost. This has been taken from the Nils
Holgersson survey in 2014.*
• Regardless of which method one chooses, the assumptions made in the calcula-
tions significantly affect the results. Cost of capital, time period and assumptions about energy price development steer whether an investment is considered
profitable or not. Another question is the choice of method for packaging energy
efficiency measures. Should individual measures be valued separately, or should
they be packaged so as to find a way to recoup the whole project?
• Within this assignment, we gathered data for how the projects in Sustainable
• Investment costs for all the given renovation projects include VAT. Costs have
The diagram illustrates how different perspectives affect what is considered to be
profitable and viable. There is a theoretical level never reached. In many cases not
even the business economic level is reached. Examples of barriers to energy efficiency
are lack of competence and lack of resources within the organization and that the
issue is not prioritized by management.
Järva, tenant owner association Hilda, My Green Neighbourhood and Sustainable
Ålidhem have been conducted and the results that have been achieved. We report
and discuss how calculations have been carried out and viewed with respect to
profitability of the projects. The account is based on data obtained from the
property owners, WSP and Frank Project Partner.
been adjusted to 2013 value using CPI.
• The cost for every saved kilowatt hour in the respective projects has been calcu-
lated based on investment for energy efficiency measures adjusted to 2013 value
using CPI.
• LCC-calculations have been performed using the Edkalkyl tool.
Definitions
• A – Inner area heated to at least 10°C.
• Energy performance – A measure of how well a building uses energy.
temp
Heating, hot water and building services electricity are included and stated
as kWh/m2Atemp per year.
• Average year correction – Energy that is affected by the outside temperature,
e.g. heating, may be adjusted by a factor that indicates how much colder or
warmer a given year is compared to a normal year.
• Equity ratio – Key figures indicating the proportion of a company’s assets
which are financed with own capital.
• Net operating income – Property owner’s income, such as rent/fees, minus
administration costs, such as operation, maintenance and property taxes.
• Yield – Net operating income divided by the property’s market value.
• CPI – Consumer Price Index - A measure of price development, which is used
among other things are used as measures of inflation.
• LCC – Life Cycle Cost. The cost of a measure through its complete life cycle.
• Residual Value – Residual value of an investment when its useful life is over.
* The Nils Holgersson-group (Swedish Property Owners Association, HSB Cooperative Housing
Association, The Swedish Union of Tenants (Hyresgästföreningen), Riksbyggen Cooperative Housing
Association and the Swedish Association of Public Housing Companies SABO) publish an annual report
on differences between municipalities in energy costs and other property related costs.
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Sustainable cities – Energy efficiency Renovation and its Economy
Sustainable cities – Energy efficiency Renovation and its Economy
7
The Theory of Profitability
• Profitability is a concept that measures the economic efficiency of a business.
Profitability is normally measured as the relationship between the surplus arising
and the value of the resources used.
Profitability =
What is a profitable investment?
This chapter provides a theoretical background on how to
assess the profitability of an investment.
Most of this chapter is taken from The Economics of Renovation with
Energy Investments (Ekonomi vid ombyggnader med energisatsningar,
Report available in Swedish only, Final Report, 15 February 2012) that
the ÅF Group produced on behalf of the City of Stockholm. WSP has
supplemented the chapter with two new sections, one on the consequences that the new main framework for component depreciation
has on the assessment of energy efficiency measures profitability
during renovation and a section on economic benefit and added
value.
Result
Resource input
=
Income – Costs
Resource input
• In the field of property investment the term yield is often used to measure and
assess profitability. Yield is defined as the ratio between net operating income and
the property’s market value.
Yield =
Net operating income
Market value
=
Rent – Operation costs & Maintenance
Market value
• Profitability can be calculated for both society at large and for individual companies. Business economic calculations only take into account the company’s own
costs, income and amount of capital invested. Capital placed by society is thus
not included in these calculations, nor any social gains or losses. A result of this
is that a socio-economic profitability calculation can lead to completely different
results than those of a business economic one.
An example – Gårdsten – A profitable business?
The Million New Homes Programme area of Gårdsten in Gothenburg was characterized by more than 2,000 technically run-down apartments, high vacancy rates
and social exclusion. In 1996 a transformation of the area was initiated with the
aim of creating a well-functioning neighbourhood.
In a study from 2008 Hans Lind and Stellan Lundström investigated if renovation
was profitable, from both a business stand-point and from a socio-economic one.
The business economic calculations only took into account how own capital, in the
form of company contribution from the municipality, had earned interest during the
10-year period that was investigated. With an interest rate of 2 per cent investment
breaks even. With a more commercial rate of 6–8 per cent, the investment is clearly
unprofitable (-150 MSEK -250).
The socio-economic calculation also took into account, in addition to capital
appreciation in the company, factors such as reduced unemployment, reduced
crime, increased well-being of tenants and reduced resource consumption
(due to individual metering of hot water).
The outcome of the socio-economic analysis shows that the positive effects on
society can be valued at about 300 MSEK over the period, which weighs up the
business economic loss.
• When making a socio-economic profitability calculation, strict cost and income
approaches are rarely sufficient to assess all the consequences for a business.
Instead, a cost-benefit analysis can be used, which takes into account negative
external consequences, such as environmental pollution, and society’s real
benefits and costs.
Sustainable cities – Energy efficiency Renovation and its Economy
9
What is an investment?
Investment: Use of capital which has long-term
payment consequences
• The long-term nature of the investment means that in many cases it is taken up
as a fixed asset in the balance sheet. The cost is distributed by depreciation over
the investment’s economic life-time instead of being charged to earnings on the
investment date. This is known as enabling the investment and means that the
assets’ booked value increases. The investment can also be taken as an expense
in the current year within the framework of tax regulations.
• From the calculation standpoint, any measure with long-term payment conse-
quences is always an investment, whether capitalized or expensed directly. From
an accounting point of view, the measure is only an investment if it is capitalized.
• Properties have long life-times which mean that they require regular maintenance.
There have been no clear regulations about whether a renovation is recognized
as an investment, and thus taken to the balance sheet or as maintenance and
therefore taken as an expense directly. From 2014 depreciation will be made in
accordance with the component method for companies applying the new main
legal framework for accounting, K3. The method is described in more detail in the
next section.
Component Depreciation
The Council for Municipal Accounting recommendations for
tangible assets
“Additional expenditures for tangible asset should be added to the cost of
acquisition until the asset’s performance and/or service potential has been
improved compared with the level of performance and/or service potential
at the date of acquisition. All other additional costs should be recognized as
expenses in the period in which they arise.
Examples of measures that can be considered to add an in-crease in the asset’s
performance and/or service potential that the cost should be added to the cost
of acquisition are:
• modification of the asset that extends the estimated useful life or increase
the asset’s capacity and/or service potential,
• changes resulting in significant improvement of the quality of produced
• Under the new principal regulation, K3, from 2014, the component method
must be applied in accounting for properties held as fixed assets. This means big
changes for property companies when it comes to the boundaries between investment and maintenance.
• The main idea of the new regulation is based on the fact that different types of
components have different lengths of operating time, and are therefore replaced
at different time intervals. The change in the regulations means that significant
components are depreciated separately because they have significant differences
in time of use. The table below presents some guidelines for operating periods by
the organisation Swedish Indoor Environment.
• The Swedish Association of Public Housing Companies (SABO) and the Property
Owners’ Federation estimates that the consequence of the new regulations is that
the building’s net operating income will be higher, since part of the maintenance
expenditure will be capitalized instead of being expensed immediately.
products or services or
• changes leading to a significant reduction in production costs.
Expenditure for repairs and maintenance of a tangible asset that aim to
maintain or restore the asset’s characteristics should be shown as an expense
in the period they occur.”
Climate shell
40 yr
Compressed air systems
20 yr
Lighting
20 yr
Heating systems
60 yr
Cooling systems
20 yr
Potable water systems
60 yr
Ventilation systems
20 yr
Heat exchangers
25–30 yr
Motors and AC drives
10 yr
Boilers
25–30 yr
Pump systems
20 yr
Heat pumps
15–20 yr
Professional kitchen
equipment
15 yr
Heating distribution
systems
60 yr
SABO and the Property owners’ Federation have developed the basis for
the identification of significant components in their guidelines for the new
K3 regulations:
“How identification of significant components takes place can vary between
different investment property types. Component identification is affected by the
company’s management of replacement of components or parts of components.
A number of component which may be significant have been located. The following
exemplification of component types (1) – (9) is intended to provide a basis for
further discussion and, if necessary adaptation to individual situations.
(1)Land
(2) Land care
(3) Building and land inventories
(4)Frame
(5)Ceiling
(6)Facade
(7) Interior surfaces (floor, walls, ceilings)
(8) Installations (electricity, pipes, ventilation, elevators)
(9) Tenant adaptations
This means nine classes of components, where (1) – (3) are also tax concepts
while (4) – (9) are normally part of the tax concept building.”
Approximate values from Swedish Indoor Environment Energy Guide.
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Sustainable cities – Energy efficiency Renovation and its Economy
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11
Investment Appraisal
• Assessing the profitability of an investment is often associated with great uncer-
tainty in that it can be difficult to estimate future cash flows and the economic life
length. Investment calculation is used to facilitate and support decision-making.
• The basis of investment calculation is to investigate whether a particular resource-
Calculation methods
G, the initial investment, is the disbursement incurred in connection with the
investment.
a, payment surplus, is the change in the payments which the investment gives rise to.
sacrifice, in the form of a basic investment, is justifiable in relation to the payment
surplus that the investment generates. In the calculation it is important to:
R, residual value, occurs if the investment still has value after the useful life
(or the calculation period) is over.
• Consider inputs and disbursement size,
• Consider the time when they occur,
• Make receipts and payments comparable, i.e. work them out for the same time
n, economic life, is the period in which it makes economic sense to use the
investment.
investment payback period, i.e. the time it takes before payment surplus exceeds
the initial investment. In its simplest form no account is taken of interest and
depreciation etc.
Pay back time =
G
a
• Decision Policy: An investment is profitable if its payback period is less than
a predetermined maximum payback period. The investment with the shortest
payback period is the most profitable.
period.
• Contributions and withdrawals made in the future are worth less than if they
• Pros: Easy to use, few factors to take into account.
• Cons: misleading since it does not take into account the consequences after the
were to occur today. This is because the money we have in hand can earn interest
through alternative investments. A computed interest rate is used to make the
payment flows comparable which, inter alia, must take into account:
repayment period and when receipts and disbursements occur. The method is best
used for short-term investments.
• The interest rate at which the company can borrow capital,
• The remuneration of the company’s alternative investment opportunities,
• The risk that the investment is associated.
12
• The Payback method is a form of investment calculation that calculates the
Sustainable cities – Energy efficiency Renovation and its Economy
Sustainable cities – Energy efficiency Renovation and its Economy
• Return-Calculation based methods mean that all future cash impact, for a
specific calculation period, is recalculated and summarized during the time of
investment to a net present value. In this way, the initial investment can be
compared with the future payment surpluses arising as a result of the investment.
The present value depends on the company’s alternative capital growth, i.e. the
cost of capital.
Current worth = a • current worth factor + R • current worth factor – G
• Decision Policy: An investment is profitable if it has a positive current value.
The investment which has the greatest current value is the most profitable
alternative.
• Pros: Takes into account, for the most part, all quantifiable consequences
of an investment.
• Cons: Harder to computationally implement than other methods, can give
misleading results for companies with funding difficulties.
13
Costing Methods continued
Socio-economic advantages and other added values
• Life Cycle Cost Analysis is basically a form of return calculation based method-
• In addition to a real estate financial analysis, investment in real estate should also
ology that compares future energy and maintenance costs for alternative energy
efficiency investments. If the investment gives rise to other cash flow changes,
which differs between the alternatives, these should also be included in the calculation. The calculation period extends, as its name suggests, over the investment’s
entire economic lifecycle.
be analysed from a socioeconomic perspective. This includes both social aspects
and environmental benefits.
• Social benefits of renovations could include for example, reduced crime, in-
creased opportunities for older people to continue living at home and reduced
housing shortages. These aspects are difficult to express in exact monetary terms.
Instead, they often need to be valued qualitatively.
LCCtot = G + LCCenergy + LCCmaintenance
• Environmental benefits through reduced energy end use are obtained in the form
LCCenergy = annual energy cost • current value factor
of reduced greenhouse gas emissions, etc. There are several different economic
values associated with reduced emissions.
LCCmaintenance= annual maintenance cost • current value factor
•
• Decision Policy: The investment with the lowest total life cycle cost is the
most profitable.
• Pros: Takes into account cost savings during the whole lifecycle of the
investment.
The tables on the right show the emission measurement and emission factors the
National Board of Housing, Building and Planning used in its recent review of the
energy requirements in the national building code (BBR). Based on these values it
shows how the economic societal benefit of reduced energy use may be assessed
for different energy carriers.
Emission Factors (g/kWh)
Marg.el. (condens. coal)
CO2
SO2
NOX
NMVOC
1,148
0.62
0.42
0.02
Marg.el. (natural gas)
408
0.02
0.52
0.02
Nordic el. mix
108
0.09
0.1
0.01
BIO co-generation system
56.6
0.17
0.32
1.76
107.5
0.28
0.35
1.49
FOSSIL co-generation system
Emissions Score
SEK/kg
Greenhouse gases (CO2-equivalent)
0.21
Sulphur dioxide (SO2)
27.6
Nitrogen oxides (NOX)
82.9
NMVOC
42
Emission factors the National Board of Housing, Building and Planning used in the
latest review of the national building code’s energy requirement.
• The values for greenhouse gas emissions the National Board of Housing, Building
• Cons: This method requires more investment options in order to be relevant.
and Planning used in its main alternative differ significantly from a valuation
made by ASEK (Working Group for Socio- economic calculations). ASEK
believe that the true cost for reaching reduction targets is 1.5 SEK/kg CO2
(~0.17 €/kg).
The total life cycle cost of a stand-alone investment option says in itself nothing
about the profitability.
• Another way to assess the economic value of reducing CO
2 emissions in the
calculations is to make use of the carbon tax which is 1.05 SEK/kg (~0.12 €/kg).
Societal advantage
(öre/kWh)
CO2
SO2
NOX
NMVOC
Total
Marg.el. (condens. coal)
24.1
1.7
3.5
0.1
29.4
Marg.el. (natural gas)
8.6
0.1
4.3
0.1
13.0
Nordic el. mix
2.3
0.2
0.8
0.0
3.4
BIO co-generation system
1.2
0.5
2.7
7.4
11.7
FOSSIL co-generation system
2.3
0.8
2.9
6.3
12.2
Valuation of societal benefits, öre per kilowatt-hour reduction (1 öre = 0.01 SEK).
Calculated using emission factors given above.
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Sustainable cities – Energy efficiency Renovation and its Economy
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15
Property Company Svenska Bostäder
• Svenska Bostäder is one of three municipal housing companies in the City of
Stockholm. The company was founded in 1944 and today owns approximately
680 properties with a total of 25,400 apartments, of which about 5,200 are in
Järva.
• As a result of a stable rental market and large clearance sales Svenska Bostäder
has a strong balance sheet with a high proportion of equity. In 2013, the equity
ratio amounted to 71 per cent. Equity amounted in the same year to 12,516 MSEK.
Svenska Bostäder – Järva
The chapter shows how the Svenska Bostäder has
assessed the profitability of the Million New Homes
Programme area Järva focusing on renovation projects
within Sustainable Järva.
• The municipality has a requirement of 5 per cent rate of return on equity.
• As a result of the financial crisis in 2008, the City of Stockholm introduced
stimulus measures to boost employment in the construction industry (Stimulus
for Stockholm). For Svenska Bostäder this meant that in 2013 they were given an
expanded investment framework of 1,007 MSEK and a lowering of rate of return
of 500 MSEK to enable construction and major maintenance work in the property
portfolio.
•
Svenska Bostäder has a portfolio comprising all types of property. In Järva they
are primarily buildings from 1950-, 1960- and 1970s – staircase entry blocks
(without elevators), towerblocks and balcony access blocks.
•
In Stockholm there are currently no vacant rental apartments. For commercial
rentals, Svenska Bostäder has a vacancy rate equivalent to 7.5 per cent of the
rental income.
Financial key figures (2013)
Turnover:
2,483 MSEK
Net operating income: 541 MSEK
Yield:
3.0 %
Solidity:
71 %
Sustainable cities – Energy efficiency Renovation and its Economy
Svenska Bostäder has a goal that, by no later than 2018, to have lowered the
average energy end use over the entire portfolio to 150 kWh/m2 apartment
area or commercial area. This means that some buildings will be completely
renovated, whereas in others nothing will be done. New construction also
helps to reduce the average energy end use.
Owner Directives 2014–2016
• Contribute to the construction of new housing.
• Continue work on Järvalyftet, Vision Hässelby-Vällingby and Sothern Stockholm
vision.
• Investigate the feasibility of building homes with another form of tenure as part
of the company’s involvement in the Järvalyftet project.
• Complete maintenance efforts in the 1940s and 1950s stocks and increase
conversion and maintenance measures within the Million New Homes
Programme stock with focus on Järva and western Stockholm.
• Continue to carry out maintenance in the Stadsholmen stock.
• Continue efforts to increase efficiency focusing on the core business and
improving operating results.
• Continue efforts to reduce administrative and indirect production costs.
• Continuously examine the possibility of transferring Vällingby City from
Svenska Bostäder to St Erik’s Land Development during the period.
• Contribute to the creation of more students housing through both new
construction and inventory of existing stock.
17
Policy for Valuation and Accounting
• Each individual property is valued annually using a cash flow analysis based on
the development of net operating income and assessment of market return. Actual
operating and maintenance costs normal year are corrected for a normal year to
reflect the assessed market conditions.
• Svenska Bostäder has surplus values in their portfolio. The book value amounts
to about SEK 16 billion in 2013, while the market value is more than twice as big
(see graph).
• Only those parts of the investment covered by increased cash flows (revenue
growth and/or reduced operating costs) are capitalized in the balance sheet.
The remaining amount is expensed immediately year 1.
Million New Homes Programme Area Järva
“Increases in market values of properties is mainly affected solely by the difference
in cash flows. The required return is determined by the market and is more difficult
to influence. If rents increase there is a risk that the required return is also raised,
as a result of the fact that it may be harder to rent out. A renovation that improves
the attractiveness of the area does not necessarily result in lower risk assessment.
This largely depends on the fact that vacancy rates are from the beginning very low
in all areas of Stockholm. In large part this is because the vacancy rates from the
beginning is very low in all areas of Stockholm. The shortage of apartments means
that even those in bad condition can be rented out.”
Svenska Bostäder
• The City of Stockholm’s Järvalyftet (“Lifting Järva”) project started in 2007 and
in 2009 the City Council adopted Vision Järva 2030. The Järvalyftet project is a
long-term investment to improve living conditions in the city districts of Akalla,
Hjulsta, Husby, Kista, Rinkeby and Tensta. It is a collaboration between public
and private actors.
• Residential areas around Järvafältet have many good qualities. There is a metro
and proximity to green areas, while at the same time being close to major centres
such as Kista. The areas, however, have had a bad reputation for a long time due
to socio-economic factors and segregation.
• Investment in property has an amortization period of 20–50 years, which means
amortization of 2–5 per cent per year.
• With the Järvalyftet project, The City of Stockholm wants to break the area’s
• Each property represents a booked value in the balance sheet. Surplus and under-
downward trend and set clear goals regarding crime reduction, increased security,
reduced segregation and raising its standing and status.
values in individual properties may not be offset against each other.
• Housing companies may not set aside money in maintenance funds, which is
• Within the Järvalyftet project, Svenska Bostäder is working to remedy an area
problematic. Upgrades and deferred maintenance can therefore not be funded by
dedicating operational results, but must be financed by other means which in turn
depletes the property portfolio. Svenska Bostäder, unlike many other housing
companies has the opportunity to do this, for example through the sale of a
portion of the stock.
that is run down and where the buildings have reached the end of their service
life. The buildings are in great need of maintenance. After extensive protests from
tenants, demolishing buildings is not seen as an alternative. The goal is thorough
renovation.
Source: Svenska Bostäder, annual accounts 2013.
18
“The Järva area should be a safe, pleasant and well-functioning part of Stockholm
to live, work and stay in. It will be an attractive part of Stockholm, with a good
reputation and good standing.”
Sustainable cities – Energy efficiency Renovation and its Economy
Energy efficiency goals in Sustainable Järva
Goal A: The use of purchased energy for heating, hot water and building electricity
should on average for the seven houses not exceed 101 kWh/m2 Atemp per year after
the renovations.
Goal B: Reduced use of household electricity by 10 per cent in the seven renovated
buildings.
Goal C: Reduced energy end use on the construction site by 30 per cent compared
with a conventional construction site year 2009.
Goal D: Develop a model for calculating greenhouse gas emissions.
Goal E: Preserve the heritage values in connection with climate targets
implementation.
Goal F: Test and compare site-built and prefabricated technology for insulation
of facades.
Goal G: Implementing good practices in Svenska Bostäder upcoming projects.
• Svenska Bostäder has gone from “patch and mend” to the adoption of a holistic
approach where measures in both the buildings and in the area as a whole are
carried out simultaneously. A holistic perspective creates major opportunities for
energy efficiency.
Sustainable cities – Energy efficiency Renovation and its Economy
19
Million New Homes Programme Area Järva continued
Sustainable Järva – Financial Preconditions
• Within the Järvalyftet project there is a subproject, Sustainable Järva, focused on
• Profitability Assessment for Sustainable Järva is based on a present value analysis
environment, climate and energy issues. A large part of the project involves improving energy efficiency of six properties with a total of 350 apartments through
extensive renovation. The selected buildings comprise the three most common
types of houses from the Million New Homes Programme: balcony access blocks,
multi-apartment blocks (with elevators), staircase entry blocks (without elevators).
Svenska Bostäder has had for a long time a strong focus on energy efficiency,
mainly through low-cost measures such as the adjustment and improvement
of existing systems. They have thus been able to reduce energy consumption
in many of their buildings by 20 to 30 per cent. To reduce energy consumption
further requires major intervention in the building envelope and new
installation solutions.
• The initial energy target within the Sustainable Järva project was to achieve an
of the property’s future cash flows. The calculation period is 10 years and the
discount rate is set at 5 per cent, regardless of the location of the property. For
year 11 a residual value is calculated, based on a market valuation of the property.
The required return in the residual value is determined by previous transactions,
i.e. by the market.
• Each building’s profitability is assessed individually and must be able to bear its
average energy of 88 kWh/m2 Atemp. Since the project started calculation methods have been developed, inter alia SVEBY has developed guidelines for energy
calculations that include new values for ventilation, hot water use and thermal
bridges. Based on these values energy target were adjusted to 101 kWh/m2 Atemp
year.
• Project Sustainable Järva was awarded a grant from the National Delegation for
Sustainable Cities to finance extended renovation with a focus on sustainability.
The grant amounted to 55 million SEK (~6 million €) and covered approximately
30 per cent of the incremental cost of the project. A large part of the grant, about
25 MSEK (~2.8 million €) has gone to energy efficiency in seven buildings
owned by Svenska Bostäder, the remaining part of the grant has gone to other
subprojects within Sustainable Järva.
own investment.
• Svenska Bostäder does not break down investments into energy efficiency respective other measures as it deemed too complicated and resource intensive. Neglected
maintenance should not really be included in the profitability calculations since
it is not classed as an investment. In practice, it is often difficult to distinguish
between maintenance and investment.
• The first building that was renovated within Sustainable Järva was a pilot pro-
ject which, besides far-reaching energy efficiency measures also had apartments
adapted to new construction standards. In the continuing renovation, measures
have been revised to reduce investment costs, but the focus is still to halve energy
end use in the buildings.
• Svenska Bostäder is a long-term property company which makes investments
primarily to increase the properties’ net operating income and thereby improve
the operational result. Today the company has a strong balance sheet, but a “weak”
property portfolio with low-yielding real estate. By investing available funds in
renovation it is possible to raise rents and reduce operating and maintenance costs
with which over time give a stronger result. In 2025, the company expects to have
a strong financial position with high operating income and minimal maintenance
requirements.
In Järva a new method for prefabricated additional insulation of facades has also
been tested and evaluated. The aim was to use this method to renovate one building
of each type: balcony access, multi-apartment blocks (with elevators) and staircase
entry block (without elevators). But technology development has not come as far as
was expected. For this reason, Svenska Bostäder, having developed the method in
collaboration with the contractor and the Swedish Energy Agency’s purchaser group
for energy-efficient residential buildings (BeBo), decided to only try out the new
method on a gable facade of one building.
Definition of profitability
Company profits and socioeconomic benefits.
Model for profitability
assessment
Yield assessment.
Yield demand
Discount rate, 4–4,5 per cent inc. inflation (real).
Financing
Own capital and grant from Delegation for
Sustainable Cities.
Investments influence on
The company’s economy
Reduced solidity.
Lower earnings in current year.
Long-term stronger results through reduced
operation and maintenance costs and increased
rents.
• The market value of the properties in Järva is relatively low. This means that a
renovation represents a large percentage of the original value, in many cases close
to 50 per cent. Thanks to Svenska Bostäder’s good financial position with a strong
balance sheet, renovation is financed primarily with own capital.
• Svenska Bostäder has an annual renovation budget of 1,400 million SEK
(~155 million €) and a maintenance budget of 600–700 million SEK
(~65–75 million €). The large maintenance effort now being undertaken
will continue until year 2022.
20
Sustainable cities – Energy efficiency Renovation and its Economy
Sustainable cities – Energy efficiency Renovation and its Economy
21
Sustainable Järva. The Trondheim 4 block, Trondheimsgatan 28.
Energy efficiency Improvement
• The project Sustainable Järva was initiated in March 2010 with the renovation of
a fire-damaged balcony-access building, Trondheim 28, in the Trondheim 4 block
in the Stockholm suburb of Husby. The building was ready for re-occupancy in
April 2011 since when more than 100 persons have moved into the 25 apartments.
•
•
Since the building was fire damaged and empty, Trondheimsgatan 28 was renovated in accordance with new construction standards. No special requirements
were made on building conservation during renovation.
Before renovation the energy end use of Trondheimsgatan 28 was 181 kWh/m2
Atemp per annum, and the calculated energy end use reduction was 34 per cent
(119 kWh/m2 Atemp per annum r). An energy performance of 125 kWh/m2 Atemp
per annum was monitored after renovation.
• Under 2013 the renovation was supplemented by the installation of solar cells
which will reduce the need for purchased electricity. More information can be
found at www.soldata.se.
Sustainable Järva. The Trondheim 4 block, Trondheimsgatan 28. Results
• The total investment for the renovation of Trondheimsgatan 28 has been calculated
Energy efficiency measures
• Additional insulation of facade, 100 mm.
• Improved climate shell tightness, 0,4 l/s at 50 Pa.
• Installation of high performance windows, U-value 1,1 W/ m , K, yr.
• Installation of energy efficient doors, U-value 1,4 W/ m , K, yr.
• Installation of supply and exhaust air ventilation system with heat exchange,
2
2
efficiency rate 70 per cent.
• Insulation of water pipes in conjunction with sewage pipe replacement.
• Installation of high performance tap water mixers.
• Movement-based lighting controls with LED fittings.
• Replacement of heat exchanger and heating distribution system.
• Adjustment of heating system.
Other measures
• Remove exterior corridors and replace with balconies in order to allow fitting of
to be 55 MSEK (~6.1 M€), corresponding to around 22,000 SEK/m2 Atemp (~2,400 €).
Approximately 8.4 MSEK (~0.9 M€), corresponding 3,300 SEK/m2 Atemp (370 €),
of the investment is estimated to have gone into energy efficiency measures in order
to achieve Sustainable Järva’s efficiency objectives.
• After the renovation, in 2012, energy end use was monitored at 125 kWh/m A
2
per annum, which is 6 kWh/m higher than the calculated energy use. In total,
energy performance has improved by 31 per cent.
2
temp
• The fact that the set energy performance target was not reached is assumed to be
due to the large number of tenants. This means that hot water use per apartment
is high, approximately 120 per cent higher than SVEBY’s (a Swedish building
sector’s voluntary standard agreement) level. This in turn means that the energy
end use per m2 is high while the energy end use per person is relatively low.
• A reduced need for purchased energy of 56 kWh/m A
temp per annum results in a
cost saving of 58 SEK m Atemp per annum, calculated at 2013 values.
2
2
• In connection with renovation the rents of apartments in the building were raised.
Before renovation, the average rents was 803 SEK/m2 rented area BOA) and year
(corresponds to 89 €). The new rents have been set at 1,230 SEK/m2 per year
(137 €), an increase of about 53 per cent. Despite the large increase in rent more
than 600 people queued for the 25 apartments.
additional insulation and reduced thermal bridges for the entire facade.
The diagrams show the outcome of the renovation of Trondheimsgatan 28 in Sustainable Järva, with respect to energy and economy. The red bars show the energy end
use before and after renovation as well as the calculated energy end use. The green
bars show the rental levels before and after as well as energy costs before and after
renovation.
Brief facts – Trondheimsgatan 28
Trondheimsgatan 28 before and after renovation.
(Source: Svenska Bostäder)
22
Year built:
Year renovated: Size:
Type of building:
Energy end use before: Energy end use after: 1974
2010–2011
25 apartments, 2,505 m2 Atemp
External corridor
181 kWh/m2 Atemp per yr
125 kWh/m2 Atemp per yr
Sustainable cities – Energy efficiency Renovation and its Economy
Sustainable cities – Energy efficiency Renovation and its Economy
23
Sustainable Järva. The Trondheim 4 block, Trondheimsgatan 30.
Energy efficiency Improvement
• In January 2011 the Sustainable Järva project continued with the renovation of the
Trondheim 4 block, which also includes Trondheimsgatan 30. The renovation was
completed in December 2012 and in addition to the renovation a new floor with
8 new apartments and an extension connecting Trondheimsgatan 30 and 32 with
each other were added on.
• Based on the economic experiences from Trondheimsgatan 28 a decision was
made to retain the access balconies.
•
Energy end use in Trondheimsgatan 30 before renovation was 195 kWh/m2 Atemp
per annum. The energy efficiency measures were calculated to reduce energy end
use by 46 per cent, down to 105 kWh/m2 Atemp per annum. After renovation energy
performance was monitored at 122 kWh/m2 Atemp per annum.
• The building will be certified in accordance with the Green Building certification
scheme, the aim is to reach silver.
Energy efficiency measures
• Additional insulation attic, 200 mm.
• Additional insulation facade, 50 mm.
• Additional insulation cellar, 50 mm.
• Improved climate shell tightness, 1 l/s at 50 Pa.
• Change to energy-efficient windows, U-value 1,0 W/m , K, yr.
• Change to energy-efficient doors, U-value 1,6 W/m , K, yr.
• Installation of Supply and exhaust air ventilation system with heat exchange,
2
2
efficiency rate 90 per cent.
• Insulation of warm water pipes in conjunction with sewage pipe replacement.
• Installation of water-saving tap fixtures.
• Replacement of heat exchanger and heating distribution system.
• Adjustment of heating system.
Sustainable Järva. The Trondheim 4 block, Trondheimsgatan 30. Results
• The total investment for the renovation of Trondheimsgatan 30 is estimated at
44 MSEK (~4.9 M€), which corresponds to about 13,000 SEK/m2 Atemp (~1,450 €).
Of this, around 4.8 MSEK (~0.5 M€), corresponding to 1,400 SEK/m2 Atemp (~155 €)
is estimated to have been invested in energy efficiency measures in order to achieve
Sustainable Järva’s energy efficiency target.
• Following the renovation in 2013, the monitored energy end use was 122 kWh/m A
2
temp
per year which is 17 kWh higher than the calculated energy end use. Total energy
end use was reduced by 37 per cent.
• Since it took about two years before the evacuated tenants received an offer to move
back many of them chose to stay in their replacement flats. Most of the current tenants
come from other parts of Husby.
• A reduced need of purchased energy of 73 kWh/m A
temp per annum results in a cost
saving corresponding to 75 SEK m Atemp per annum (~ 8.6 €), calculated at 2013
values.
2
2
• In conjunction with the renovation it was admitted that rents would be raised. Norm
rent for an apartment with three rooms and a kitchen in Trondheim 4 was 817 SEK/
m2 rented area (~91 €) before renovation. The new rents in the renovated apartments
are set 953 SEK/m2 (~106 €), an increase of about 14 per cent.
The diagrams show the outcome of the renovation of Trondheimsgatan 30 in Sustain­
able Järva in terms of energy and economics. The red bars show energy end use
before and after renovation, as well as the calculated energy performance. The green
bars show the rental levels before and after and energy costs before and after the
renovation.
Brief facts – Trondheimsgatan 30
Trondheimsgatan 30 before and after renovation.
(Source: Svenska Bostäder)
24
Year of construction:
Year of renovation: Size before:
Size after:
Type of building:
Energy end use before
Energy end use after: 1974
2011–2012
24 apartments, 2,026 m2 Atemp
32 apartments, 3,410 m2 Atemp
Access balcony
195 kWh/m2 Atemp per yr
122 kWh/m2 Atemp per yr
Sustainable cities – Energy efficiency Renovation and its Economy
Sustainable cities – Energy efficiency Renovation and its Economy
25
Sustainable Järva. The Kvarnseglet 2 block.
Energy efficiency Improvement
•
Kvarnseglet 2 is located in a large, uniform area in the Stockholm suburb of
Rinkeby. Renovation began in April 2011 of two slab block buildings in the
block, Gärdebyplan 8–26, and were ready for re-occupancy in October 2012.
• The Stockholm City Museum and the City Planning Authority arranged meetings
with the project team for the renovation to ensure that the original character and
cultural heritage of the area was preserved.
•
The building’s average energy end use before renovation was 138 kWh/m2 Atemp
per annum. With the energy efficiency measures it is expected to reduce energy
end use to 106 kWh/m2 Atemp per annum, an efficiency improvement of about
23 per cent. After the renovation an energy performance of 83 kWh/m2 Atemp
per annum has been monitored.
• In 2014, the building was supplemented with solar cells, energy production
from these will be reported on www.soldata.se.
Sustainable Järva. The Kvarnseglet 2 block. Results
• The total investment for the renovation of the two slab block buildings in
Energy efficiency measures
• Additional insulation facade, 100 mm.
• Additional insulation cellar, 100 mm.
• Improved climate shell air tightness, 0,6 l/s at 50 Pa.
• Installation of high performance windows, U-value 1,0 W/ m , K, yr.
• Installation of Supply and exhaust air ventilation system with heat exchange,
2
efficiency level 90 per cent.
•
• Installation of high performance tap water-saving mixers.
• Installation of LED-lighting.
• New heat exchanger and heating distribution system.
• Adjustment of the heating system.
Insulation of heating distribution system in conjunction with pipe change.
Kvarn­seglet 2 is estimated at 140 MSEK (~15.6 M€), which corresponds to about
18,000 SEK/m2 Atemp (~2,000 €). Of this, around 10 MSEK (~1.1 M€), corresponding to 1,300 SEK/m2 Atemp (~145 €), have been invested in the energy efficiency
measures for achieving the Sustainable Järva project’s energy efficiency target.
• The monitored energy end use in 2013, after the measures taken, was 83 kWh/m
2
Atemp per annum, which is 23 kWh more energy than estimated. Total energy end
use was reduced by 40 per cent.
• A reduced need for purchased energy of 55 kWh/m A
temp per annum leads to
a cost saving of 57 SEK/m Atemp per year (~6.3 €), calculated at 2013 values.
2
2
• In conjunction with the renovation it was announced that rents would be increased.
Before renovation, the average rent for a two bedroom apartment was 817 SEK/m2
rented area per annum (~91 €). The new rent has been set at 970 SEK/m2 rental area
per year (~107 €), an increase of about 19 per cent.
The diagrams show the results of the renovation of Kvarnseglet 2 in Sustainable Järva,
with respect to energy end use and economy. The red bars show energy end use before
and after renovation, as well as the calculated energy efficiency. The green bars show
the rental levels before and after and energy costs before and after the renovation.
Brief facts – Kvarnseglet 2
Kvarnseglet 2 before and after renovation.
(Source: Svenska Bostäder)
26
Year of construction:
Year of renovation: Size:
Type of building:
Energy end use before: Energy end use after: 1971
2011–2012
67 apartments, 7,794 m2 Atemp
Staircase entry block without elevator
138 kWh/m2 Atemp per annum
83 kWh/m2 Atemp per annum
Sustainable cities – Energy efficiency Renovation and its Economy
Sustainable cities – Energy efficiency Renovation and its Economy
27
Sustainable Järva. The Storkvarnen 4 block.
Energy efficiency Improvement
• The Storkvarnen 4 block is also located in Rinkeby. A staircase entry block (with-
out elevators) it is, located at Västerby Backe 26–30, and is part of the Sustainable Järva Project, renovation began in April 2012. The renovation was completed
in January 2013. There are no monitored energy end use values for the building
due to storage problems of monitored data.
•
The Stockholm City Museum considered the building to have a certain heritage
value. The facade colour and design of window and door sections were retained
during renovation.
• Energy end use in Storkvarnen 4 before renovation was 135 kWh/m
Atemp per
annum. In conjunction with the renovation energy efficiency measures were
carried out which were calculated to lower energy end use by 31 per cent, down
to 93 kWh/m2 Atemp per annum.
2
Sustainable Järva. The Storkvarnen 4 block. Expected result
• The investment for the renovation of Storkvarnen 4 has been calculated at 75 MSEK
Energy efficiency measures
• Additional insulation attic, 200 mm.
• Additional insulation facade, 80 mm.
• Additional insulation cellar, 80 mm.
• Improved climate shell air tightness 0,4 l/s at 50 Pa.
• Installation of high-performance windows, U=1,0.
• Installation of supply and exhaust air ventilation system with heat exchange,
efficiency rate 75 %.
• Insulation of water pipes in conjunction with sewage pipe replacement.
• Installation of high-performance tap water mixers.
• LED-lighting in stairwells and bathrooms.
• Change of heat exchanger.
• Adjustment of heating system.
• 218 m thermal solar collectors.
• 170 m Photo Voltaics (solar cells).
(~8.3 M€), which corresponds to about 14,000 SEK/m2 Atemp (~1,550 €), Of this it is
assessed 14.5 MSEK (~1.6 M€), corresponding to 2,800 SEK/m2 Atemp (~310 €), has
been invested in energy efficiency measures to achieve Sustainable Järva’s energyefficiency objective.
• There is no data available of measurements for Storkvarnen 4 due to a technical
failure in the storage of monitored data. Energy end use before renovation was
estimated at 134 kWh/m2 Atemp per annum and has been estimated to reduce to
93 kWh/m2 Atemp per annum. This represents an efficiency improvement of about
30 per cent.
• A reduced need for purchased energy of 63 kWh/m A
temp per annum would lead to
a cost saving of 65 SEK/m Atemp per annum (~7.2 €), calculated at 2013 values.
2
2
• In conjunction with the renovation it was announced that rents would be increased.
Before the renovation, the average rent was 926 SEK/m2 rented area per annum
(~103 €). The new rent has been set at 957 SEK/m2 rented area (~106 €) per year,
an increase of about 3 per cent.
The diagrams show the results of the renovation of Västerby Backe 26–30 in Sustainable Järva, with respect to energy end use and economy. The red bars show energy end
use before renovation, as well as the calculated energy efficiency. The green bars show
the rental levels as well as energy costs before renovation, and calculated values after.
2
2
Brief facts – Storkvarnen 4
Storkvarnen 4 during and after renovation.
(Source: Svenska Bostäder)
28
Year of construction:
Year of renovation: Size:
Type of building:
Energy end use before
1972
2012–ongoing
42 apartments, 5,213 m2 Atemp
Staircase entry block (without elevators)
135 kWh/m2 Atemp per annum
Sustainable cities – Energy efficiency Renovation and its Economy
Sustainable cities – Energy efficiency Renovation and its Economy
29
Sustainable Järva. The Nystad 7 block. Energy efficiency Improvement
Sustainable Järva. The Nystad 7 block. Results
• Sibeliusgången 2, in the Nystad 7 block, is the fourth building that was renovated
• The total investment for the renovation of Nystad 7 is estimated to have amounted
within the project Sustainable Järva. The 12-storey multi-apartment block (with
elevator) is located in Akalla, a suburb in northern Stockholm. The renovation
began in April 2011 and was completed and reoccupied in August 2012.
• Apartment buildings along Sibeliusgången are considered to have major culturally
historic value. A preliminary antiquarian investigation was therefore conducted
before the renovation was done, and a high degree of conservation was sought
where the ambition was to restore the exterior to its original appearance.
• 120 m
of solar cells (Photo Voltaics) were installed on the facade during the
renovation. An additional 100 m2 of solar cells were installed on the roof in the
spring of 2014.
2
•
The building’s average energy end use before renovation was 137 kWh/m2 Atemp
per annum. The energy efficiency measures are estimated to reduce energy end
use to 97 kWh/m2 Atemp per annum, an efficiency improvement of about 30 per
cent. After the renovation an energy performance of 89 kWh/m2 Atemp per annum
was monitored. The relationship between floor space and encircling area is high,
so the building’s average energy end use is relatively low both before and after
renovation.
Energy efficiency measures
• Additional insulation facade, 80 mm.
• Additional insulation attic, 300 mm.
• Additional insulation cellar wall, 80 mm.
• Improved climate shell air tightness, 0,4 l/s at 50 Pa.
• Installation of high-performance windows, U-value 0,9 W/m , K, yr.
• Installation of energy-efficient doors, U-value 2,0 W/m , K, yr.
• Installation of supply and exhaust air ventilation system with heat ex-change,
2
2
efficiency grade 65 per cent.
• Installation of high-performance tap water mixers.
• Heat recovery from grey water.
• Change and adjustment of heating distribution system.
• LED-lighting in bathrooms and stairwells.
• 120 m Photo Voltaics (solar cells).
to SEK 112 MSEK (~12.4 M€), corresponding to 12,000 SEK/m2 Atemp (~1 300 €).
Of the investment it is assessed SEK 11 MSEK (~1.2 M€), corresponding to
1,200 SEK/m2 Atemp (~130 €) has been invested in energy efficiency measures
to achieve Sustainable Järva’s energy efficiency target.
• Energy end use after renovation was monitored in 2014 to 89 kWh/m A
temp per
annum, which is 8 kWh better than expected. Overall improved energy performance
by 35 per cent.
2
• A reduced need for purchased energy of 49 kWh/m A
temp per year leads to a cost
saving corresponding to 51 SEK/m Atemp year (~5.7 €), calculated at 2013 values.
2
2
• In conjunction with the renovation it was announced that rents would be increased.
Before renovation, the average rent was 825 SEK/m2 rented area per year (~92 €).
The new rent has been set at 1,020 SEK/m2 rented area per annum (~113 €), an
increase of about 24 per cent.
The diagrams show the results of the renovation of Nystad 7 in Sustainable Järva, with
respect to energy end use and economy. The red bars show energy end use before and
after renovation, as well as calculated energy efficiency. The green bars show the rental
levels before and after as well as energy costs before and after.
2
Brief facts – Nystad 7
Nystad 7 before and after renovation.
(Source: Svenska Bostäder)
30
Year of construction:
Year of renovation: Size:
Type of building:
Energy end use before: Energy end use after: 1974
2011–2012
99 apartments, 9,070 m2 Atemp
Multi-apartment block (with elevator)
137 kWh/m2 Atemp per yr
89 kWh/m2 Atemp per yr
Sustainable cities – Energy efficiency Renovation and its Economy
Sustainable cities – Energy efficiency Renovation and its Economy
31
Sustainable Järva. The Nystad 8 block. Energy efficiency Improvement
Sustainable Järva. The Nystad 8 block. Expected results
• The Nystad 8 block is a multi-apartment block (with elevators that is almost
• The total investment for the renovation of the Nystad 8 block has been estimated
identical to the building in the Nystad 7 block. Renovation of this type of building
on Sibeliusgången 4, Nystad 8, began in November 2012 and was completed in
December 2013. Re-occupancy took place in spring 2014.
• Experience with the low efficiency levels of the grey water heat exchanger in
Nystad 7 made Svenska Bostäder change their mind, and choose not to install this
measure in Nystad 8. On the other hand, thermal solar collectors were installed on
the roof, which was not originally planned.
• Energy end use in Nystad 8 before renovation was 134 kWh/m
Atemp per
annum. In conjunction with renovation energy efficiency measures were carried
out which were calculated to lower energy end use by 28 per cent, down to
96 kWh/m2 Atemp per annum. Since there has not yet been a full year of operation
since renovation there is no monitored data available on the energy end use.
2
Brief facts – Nystad 8
Year of construction:
Year of renovation: Size:
Type of building:
Energy end use before: 32
1975
2012–ongoing
99 apartments, 9,096 m2 Atemp
Multi-apartment block (with elevators)
134 kWh/m2 Atemp per yr
Energy efficiency measures
• Additional insulation facade, 80 mm.
• Additional insulation attic, 300 mm.
• Improved climate shell air tightness, 0,4 l/s at 50 Pa.
• Installation of high-performance windows, U-value 0,9 W/m , K, yr.
• Installation of energy-efficient doors, U-value 2,0 W/m , K, yr.
• Installation of supply and exhaust air ventilation system with heat exchange,
2
2
efficiency level 65 per cent.
• Insulation of water pipes in conjunction with sewage pipe replacement.
• Installation of high-performance tap water mixers.
• LED-lighting in bathrooms and stairwells.
• Replacement of heating distribution system and adjustment.
• 120 m thermal solar collectors.
to 123 MSEK (~13.7M€), corresponding to 12,000 SEK/m2 Atemp (~1,300 €). Approximately 10 MSEK (~1.1 M€), corresponding to 1,100 SEK/m2 Atemp (~122 €),
of the investment is estimated to have been invested in energy efficiency measures to reach the Sustainable Järva project’s energy efficiency goal.
• If a reduced requirement for purchased energy of 46 kWh/m
Atemp per annum is
achieved the cost saving will be 47 SEK/m Atemp per annum (~5.2 €), calculated
at 2013 values.
2
2
• Energy end use before renovation was 134 kWh/m
Atemp per annum, and will be
reduced according to estimates, to 96 kWh/m Atemp per annum. That means an
estimated efficiency improvement of approximately 28 per cent. Since the tenants
did not move in until spring 2014 there is not yet any monitored data available for
energy end use for an entire year.
2
2
• Before renovation it was announced that rents would be increased. Prior to
renovation, the average rent was 844 SEK/m2 rented area per annum (~94 €).
The new rent will be 1,020 SEK/m2 rented area per annum (~113 €), an increase
of about 21 per cent.
2
Sustainable cities – Energy efficiency Renovation and its Economy
The diagrams show the results of the renovation of Sibeliusgången 4 in Sustainable
Järva, with respect to energy end use and economy. The red bars show energy end use
before and after renovation, as well as the calculated energy efficiency. The green bars
show the rental levels before and after and energy costs before and after renovation.
Sustainable cities – Energy efficiency Renovation and its Economy
33
Sustainable Järva. Experience from the six subprojects
Sustainable Järva. Summary
• Svenska Bostäder believes that extensive renovations very rarely cover their costs
• The diagram on the right shows a summary of energy efficiency measures in the
solely by reduced energy costs and rent increases. Part of the investment must be
expensed directly as maintenance.
• An important experience is that goals must be firmly established at all levels for
successful project implementation.
• The target for energy efficiency must be set at a reasonable level, it should not be
too dependent on the tenants’ lifestyles and habits. It is important to monitor that
which can be influenced and tenants’ habits are difficult to predict and influence.
•
Consultation and dialogue with the residents is important to create acceptance and
high credibility. It is important to have dialogue groups which are well matched
in size and representativeness of residents, as well as having clear guidelines on
what residents can influence.
• One lesson learned from these projects is that it is perfectly possible to carry
out energy efficiency measures on listed buildings without compromising their
cultural value.
•
It is important not to look only at the profitability of individual measures and
to know which other aspects should be prioritized. Additional insulation of the
building’s climate shell, for example, is rarely profitable as a single measure, but
often contributes significantly to improved indoor air quality and more satisfied
tenants.
• A lot of energy is required during the actual renovation. With careful planning
in the early stages solutions can be found that reduce energy demand during the
renovation.
34
Prefabricated facades
Prefabricated technology for additional insulation of facades was tested
on the gable of a building in Trondheimsgatan 40. The aim was to develop
the technique and thereby reduce costs and shorten renovation periods for
supplementary insulation. The experience gained from the project is that
prefab technology needs further development before it can be implemented
on a large scale. The method used cannot, in the current situation, compete
with traditional renovation techniques.
six properties in the Sustainable Järva Project. The Storkvarnen 4 and Nystad
8 blocks have no monitored results. The expected energy efficiency results are
shown for these 2 buildings.
• An energy efficiency improvement of between 30 and 40 per cent was achieved
in the Sustainable Järva Project. The new energy performance is on average
96 kWh/m2 Atemp per annum, calculated without the inclusion of Kvarnseglet 2
and Storkvarnen 4 where no monitored energy performance is available.
• Svenska Bostäder thus achieved their goal of maximum 101 kWh/m
2
Heat exchanger wastewater
per annum.
Atemp
A grey water heat exchanger has been tested in one building. The effect
was lower than expected and there have also been problems with flooding.
Svenska Bostäder does not advocate this technology in the current situation,
but believes that it needs be tested in more buildings before it is prepared to
go ahead with it.
* No monitored values for energy use after renovation are available for the project.
The energy performance is based, in this case, on the estimated energy end use.
Evaluation supply and exhaust air ventilation systems
with heat exchange
•Svenska Bostäder thinks counter flow exchangers are the best solution for
buildings consisting only of apartments.
•It is important with internal defrosting regulation which controls the damper
over the exchanger in sequence.
•It is important that the ventilation aggregates have functioning drainage.
•The placement of the freezer sensor needs to be carefully controlled before
ordering.
•When ordering a ventilation unit with complete internal control equipment
it is important to carefully check the possibility of connection.
Sustainable cities – Energy efficiency Renovation and its Economy
Sustainable cities – Energy efficiency Renovation and its Economy
35
Sustainable Järva. Summary continued
Sustainable Järva. Summary continued
• The diagram to the right shows the sub-projects’ total investment and additional
• The diagram on the right shows the estimated lifetime costs of the projects.
investment for energy efficiency, converted to 2013 values. The pink dots show
energy efficiency cost (SEK per kilowatt hour), based on an average operational
life of 40 years.
The blue bars show the lifecycle cost of the renovation excluding energy efficiency
measures, and the red bars show the lifecycle cost of the implemented energyefficiency measures. Thermal solar collectors and Photo Voltaics have not been
included in the LCC calculations.
• Energy efficiency measures are defined as measures that increase energy
• Property owners, the tenant owner association HSB, The Swedish Union of Tenants,
performance. Measures such as additional measurement/audit, energy-efficient
appliances and Photo Voltaics/solar thermal panels are not counted as energy
efficiency measures.
the tenant owner association Riksbyggen and Swedish Association of Public
Housing Companies (SABO) examine annually, in its so-called Nils Holgersson
survey, energy cost in Swedish municipalities. Based on their latest investigation an
average energy price for district heating and electricity of 1.1 SEK/kWh (~0.12 €)
has been calculated. This energy cost and a calculation period of 40 years has
been used in the calculations performed. The amortization period for the whole
investment has simply been assumed to be 40 years. The LCC calculation for the
implemented energy efficiency measures has reduced maintenance requirements
corresponding to SEK 10 kWh/m2 Atemp per year (~1.1 €) adopted.
• Trondheimsgatan 28 and Kvarnseglet 2 are the two sub-projects with the highest
investment. This is because they were renovated to a somewhat higher standard
than the other buildings.
• The proportion of the investment spent on energy efficiency measures vary in the
six sub-projects from 7 per cent to 20 per cent. On average, about 12 per cent of
the investment was spent on energy efficiency measures.
• With an assumed energy cost of 1.1 SEK/kWh (~0.12 €) the chart on the right
shows that four of the six projects can finance their energy efficiency measures
by means of reduced energy end use.
36
* No monitored values are available for energy end use after renovation.
Cost per saved kilowatt hour based on expected energy savings.
Sustainable cities – Energy efficiency Renovation and its Economy
* No monitored values for energy end use after renovation are available.
Life cycle calculations based on expected energy savings.
• LCC calculations show that the implemented energy efficiency measures will
result in cost savings for five of the six projects. In one project, Storkvarnen 4,
the implemented energy efficiency measures will increase lifecycle costs.
Sustainable cities – Energy efficiency Renovation and its Economy
37
Property Company ÖrebroBostäder AB (ÖBO)
“ÖBO integrates social, economic and environmental concerns in their decisions,
and contribute to a sustainable city with good living environments and vibrant
neighbourhoods.”
• ÖrebroBostäder AB (ÖBO) is Örebro’s municipal housing company and is owned
100 per cent by Örebro Rådhus AB, which in turn is owned by the Municipality
of Örebro. ÖBO manages approximately 500 buildings with more than 23,000
apartments. The total floor space amounts to approximately 1.5 million m2.
• Örebro Bostäder’s primary purpose is to provide good housing in Örebro, but
ÖrebroBostäder AB
– My Green Neighbourhood
This chapter explains how ÖBO has assessed profitability
in My Green Neighbourhood, which is part of the Million
New Homes-Programme area Vivalla.
issues such as sustainability and community benefit are also included in the
company’s mission. A major challenge now is to increase the attractiveness and
social integration in the city’s western districts. New Vivalla is one of the projects
that contribute to this, where the latest technology for several climate friendly
measures are being tested.
• ÖBO’s climate target is, that between 2005 and 2015, to reduce its CO
2 emissions
by 20 per cent, and that 15 per cent of the electricity ÖBO uses should be selfproduced and renewable.
• In 2013 ÖBO was awarded ‘Landlord of the year’ by the Swedish trade magazine,
Fastighetstidningen (“The property Magazine”), among other things, for its
“persistent efforts to reduce the company’s energy use.”
Business Goals 2010–2015
• ÖBO has a financial strength which provides long-term economic flexibility.
• All of our neighbourhoods are attractive on the housing market.
• We take care of and maintain our buildings.
• ÖBO is the obvious choice in Örebro.
• ÖBO takes a proactive responsibility for a sustainable development of the climate
and environment.
• Our range of housing and services are sought after.
• By growing where we are small and shrinking where we are large the supply of
various housing alternatives has increased throughout the municipality.
Financial key figures (2013)
Revenue:
1,520 MSEK
Net operating income: 462 MSEK
Yield:
7%
Equity ratio:
23.4 %
• The vacancy rate for apartments in 2013 was 0.6 per cent.
Sustainable cities – Energy efficiency Renovation and its Economy
39
Policy for Valuation and Accounting
• An internal market valuation of ÖBO’s property holdings was made during 2013.
This value should reflect what the market is willing to pay for a property. The
valuation model is based on each building’s expected cash flow, and the market
value is estimated as the present value of the expected net operating surplus and
the residual value after 10 years.
My Green Neighbourhood. Financial Preconditions
• The booked value of ÖBO’s real state in 2013 was 6,400 MSEK (~711 M€) and
has an estimated market value of 15,700 MSEK (~1 740 M€).
• The company had equity of 1,745 MEK (~194 M€) and a solidity of 23.4 per
cent, 2010.
• The booked value corresponds to the building’s production cost, alternative
requirements. The yield requirement for dwellings varies between 3.75 and
7.75 per cent, depending on the property location and use.
• ÖBO’s accounting principle is that new construction, rebuilding, additions and
of central Örebro. The project comprises a total of 119 apartments, as well as
associated utility rooms and neighbourhood meeting rooms. The buildings, which
are mainly brick and 1–2 stories with supply and exhaust air ventilation without
heat exchange, have high maintenance costs.
• The Vivalla area has long been characterized by segregation, and in recent
investment when the building was acquired. From this the annual depreciation
is subtracted and any investment is added.
• ÖBO’s real estate has been divided into 23 value areas with different yield
• My Green Neighbourhood is situated in Vivalla which is about five km northwest
2013
2012
2011
15,681
14,932
13,939
Book Value (MSEK)
6,353
6,136
5,945
Goodwill (MSEK)
9,328
8,796
7,994
Market Value (MSEK)
value-enhancing measures are capitalized and amortized according to plan. Valueenhancing measures are measures that give a positive change in net operating
income, i.e. raise standards or energy efficiency measures. The remaining measures
count as maintenance and are expensed during year one.
decades has had a negative development in terms of unemployment, security,
environmental impact, etc.
MY: Tenants should feel a strong affiliation and at-home feeling with trust and
responsibility.
GREEN: A value to be enhanced both visually and in operation and management.
Efficient use of energy, renewable energy, infrastructure for environ-mentally friendly
transport, more green space.
KVARTER: Create unique features for the neighbourhood and facilitate for greater
contact between neighbours.
• The goal of My Green Neighbourhood is to reduce CO
2 emissions by 65 per cent,
reduce transport need by 10 per cent, increase tenant satisfaction to 90 per cent
and increase security, reduce segregation and reduce operating costs.
• Two buildings have been demolished, to make way for two new gardens, in order
to create natural meeting places. Programme decisions regarding what measures
should be included in the renovation of My Green Neighbourhood were taken in
December 2011.
• Preoccupancy of the apartments is ongoing, the first tenants moved back in March
2014.
• An initiative in the project has been to cooperate with the Public Employment
Service, where job seekers from the neighbourhood have been offered the opportunity to participate in the project. So far, 34 “tenant builders” have been incorporated in the project, and more are on the way in. ÖBO’s goal is that 50–80 persons
should receive training, internships or jobs in connection with the renewal of
Vivalla.
40
Sustainable cities – Energy efficiency Renovation and its Economy
Sustainable cities – Energy efficiency Renovation and its Economy
41
My Green Neighbourhood. Financial Preconditions continued
My Green Neighbourhood. Energy Efficiency Improvement
• The focus in the project My Green Neighbourhood has not primarily been on
• ÖBO has carried out a comprehensive renovation in this project, focusing on
economic returns, but to create a neighbourhood that is socially and ecologically
sustainable and can provide valuable experience for the further renewal of Vivalla.
lower maintenance costs and reduced CO2 emissions. The goal is to reduce
energy end use in the area from 212 kWh/m2 Atemp to 67 kWh/m2.
• My Green Neighbourhood is in line with the “the West Programme”, adopted by
• My Green Neighbourhood is a pilot project in ÖBO’s work in improving Vivalla.
the Örebro Municipal Council in 2009. The West Programme aims to upgrade the
western parts of the city, which were considered to be in need of additional effort
both socially and economically. The work will take place through the coordination
and integration of the municipality’s initiatives and organisations.
Positive experience will be used in the continued renovation work of Vivalla’s
2,300 apartments.
• Renovation of the 119 apartments on Visgatan can be scaled up and the estimates
are built on this being the case. The energy-efficient renovation of the pilot project
provides knowledge of technology, economics and how the tenants experience
renovation.
• My Green Neighbourhood is a so-called strategic partnering project with Skanska
as the main contractor. Partnering is a structured form of cooperation whereby
developers, consultants and contractors jointly solve a task.
• My Green Neighbourhood has received approximately 5 MSEK (~0.55 M€)
as a grant from the National Delegation for Sustainable Cities.
Definition of profitability
Socio economic.
Model for profitability
evaluation
Focus is not on economics but on reducing
environmental impact and increasing the
attractiveness of the area.
Yield requirements
–
Financing
Own equity, grant from the National Delegation
for Sustainable Cities and minor support from the
Municipality.
42
Brief facts – My Green Neighbourhood
Year of construction:
Year of renovation:
Size:
Type of building:
Energy end use before:
Sustainable cities – Energy efficiency Renovation and its Economy
1967–1969
2012–2014
119 apartments, 9,540 m2 Atemp
Staircase entry block (without elevator)
212 kWh/m2 Atemp
Sustainable cities – Energy efficiency Renovation and its Economy
Energy efficiency measures
• Replace supply and exhaust air ventilation by a balanced ventilation system with
heat exchange, 85 per cent efficiency.
• Additional insulation attic.
• Additional insulation facade.
• Installation of high-performance windows, U-value 0,9 W/m , K, yr.
• New heating distribution system.
• Adjustment heating distribution system.
• Movement-steered control system and LED lighting.
• Energy efficient elevators with presence-based control system.
• Individual metering and invoicing of hot and cold water.
• New building control system.
• 200 m solar thermal panels and Photo Voltaics.
2
2
Other measures
• Rainwater storage, Local Disposal of Stormwater.
• Green walls and roofs.
43
My Green Neighbourhood. Results
My Green Neighbourhood. Lessons Learned
• Investment for renovation has been estimated to be 155 MSEK (~17.2 M€), which
• To achieve an energy efficiency improvement of about 70 per cent has required a
is the equivalent of approximately 16,000 SEK/m2 Atemp per annum (~1,800 €).
Of this it is estimated 70 MSEK (~7.8 M€) equivalent to 7,300 SEK/m2 Atemp
per annum (~810 €), has been invested in energy efficiency measures.
large investment. ÖBO’s experience from this project is that if they had confined
themselves to making energy efficiency measures so that “only” the national
building code’s energy requirements for new buildings had been achieved (which
meant an improvement of around 58 per cent) the investment would have been
almost a third lower. The final kilowatt hours saved are expensive. Henceforth
in the renovation work in Vivalla, ÖBO will use the building code’s construction
requirements as the goal, i.e. no more than 90 kWh per m2 Atemp.
• According to ÖBO’s calculations, energy end use has been reduced from
212 kWh/m2 Atemp per year to 67 kWh/m2 Atemp per annum. This means an increase
of energy-performance by 70 per cent. There is no monitored data available for a
complete year since tenants did not move in until spring 2014.
• Individual metering of hot and cold water was implemented. The statistics for
• If a reduced need for purchased energy of 145 kWh/m
Atemp per annum is
achieved, it will mean a cost saving of 153 SEK/m2 Atemp per year (~17 €),
calculated at 2013 values.
2
this are not yet available but ÖBO assesses that hot water consumption will be
reduced by approximately 20–30 per cent.
• The “Tenant builders” experience ÖBO as a successful venture. Unique to this
• In conjunction with renovation it was announced that rents would be increased.
Prior to renovation the average rent was 775 SEK/m2 Atemp per year (~86 €).
The new rent has been set at 930 SEK/m2 Atemp per annum (~103 €), an increase
of about 20 per cent.
The diagrams show the results of the renovation of My Green Neighbourhood in
Vivalla, with respect to energy end use and economics. The red bars show the energy
use before renovation, and the calculated energy efficiency improvement. The green
bars show the rental levels before and after and the energy costs before and (calculated) after renovation.
44
Sustainable cities – Energy efficiency Renovation and its Economy
project is that, for the first time, social sustainability requirements have been put
into the conditional requirements in the contracts in the contractor procurement
process. This means that the contractor and its subcontractors shall provide
unemployed tenants in Vivalla internship or training. The local council in Örebro
are positive about ÖBO’s working methods and encourage more municipal
housing companies, and even private housing companies in Sweden, to follow this
example.
Sustainable cities – Energy efficiency Renovation and its Economy
45
My Green Neighbourhood. Summary
• The diagramme to the right shows the total investment and additional investments
for energy efficiency measures calculated in 2013 values, as well as the cost of
every kilowatt hour saved in the project. The left-hand diagramme shows energy
end use before renovation and the estimated energy end use after renovation.
• Measures which improve energy performance are defined as energy efficiency
measures. Measures such as extra monitoring equipment/audits, energy-efficient
appliances and Photo Voltaics/thermal solar collectors are not counted as energyefficiency measures in the diagramme.
• The cost of My Green Neighbourhood has been calculated at 16,000 SEK/m A
temp,
(~1.8 M€) of which 46 per cent has been dedicated to energy efficiency measures.
2
• If an energy price of 1.1 SEK/kWh (~0.12 €) is assumed the right-hand diagramme
shows that ÖBO’s energy efficiency measures cannot be financed solely by
reduced energy end use.
46
Sustainable cities – Energy efficiency Renovation and its Economy
Sustainable cities – Energy efficiency Renovation and its Economy
47
Property Company AB Bostaden
“Our long-term sustainable construction and professional management will
provide the best accommodation option in Umeå – socially, economically
and environmentally.”
• AB Bostaden is Umeå’s largest actor in the rental market and is 100 % owned by
Umeå Municipality. Bostaden owns and manages 187 buildings with approximately 15,500 apartments.
• The owner directives are set out by Umeå Municipality Enterprise, and based
on these a business and personnel plan is worked out.
• Bostaden’s business is characterized by a long-term perspective. The buildings
Bostaden AB – Ålidhem
This chapter describes how Bostaden AB in Umeå has
assessed profitability in conjunction with the renovation
of Ålidhem and other renovation projects.
built today should preferably last for 100 years, and the decisions made today will
affect people for a long time to come. Therefore, their basic needs for security
must be taken into account, as well as society’s use of energy, materials and
technology.
• Bostaden’s climate targets include, among other things, that energy end use
should decrease by 20 per cent between 2007 and 2020, that all energy used will
come from renewable sources by 2016 and that all light fittings containing
mercury must be replaced.
• Bostaden’s yield demand is 5 per cent and the solidity goal for 2015
is 22 per cent.
Financial key figures (2013)
Owner directives 2010–2014
• Bostaden’s main task is to be the Umeå Municipality’s tool to develop Umeå’s
housing market and make Umeå an attractive residential, industrial and university
town.
• Bostaden will conduct its business with a long-term sustainable perspective and
create the best possible conditions for the development of the municipality.
• Bostaden will be run on business-like principles.
The company’s core values
Bostaden is a key player in the
development of society and
engages itself in issues pertaining
to a long-term sustainable society.
The entire operation is based on
the company’s core values which
should reflect how we relate to
each other, both within the company, to customers and society
in general. The basic approach is
outlined in four points: Equality,
Transparency, Thoughtfulness and
Professionalism.
Turnover:
974 MSEK
Net operating income: 364 MSEK
Yield:
7.4 %
Solidity:
21.2 %
Sustainable cities – Energy efficiency Renovation and its Economy
49
Policies for valuation and accounting
Sustainable Ålidhem
• Since 2011, Bostaden carries out an annual evaluation of its properties. The
• Ålidhem is situated about four kilometres from Umeå’s city centre and within
market value is assessed for each object based on real media costs and standard
values for property maintenance and administration. The valuation is performed
by an external valuation company.
walking distance of Umeå University. The area started to be developed in the
1960s but subsequently has been continually renovated and extended.
• There are almost 3,900 rental apartments and student housing in Ålidhem,
• Measures which are performance enhancing are considered for accounting
of which 542 are included in the project Sustainable Ålidhem.
purposes as investments and capitalized in the balance sheet. The depreciation
rate is 2–3 per cent per year. Measures designed to maintain a property in its
original condition are regarded as maintenance and taken as an expense in the
first year.
• Sustainable Ålidhem received 34.4 MSEK (~3.8 M€) as a subsidy from the
National Delegation for Sustainable Cities.
• A block in Ålidhem caught fire in December 2008. A total of 71 apartments were
• The properties booked value year 2013 was 4,918 MSEK (~546 M€).
• The company has a capital of 1,140 MSEK (~127 M€). In 2013 Solidity
burnt to the ground and over 200 tenants were affected. This was the starting
point of Sustainable Ålidhem when it was decided that new, energy efficient
buildings would replace the burnt-out buildings in Geografigränd.
amounted to 21.2 per cent.
• In addition to the new houses in Geografigränd the whole of southern Ålidhem
would get a facelift and a comprehensive renovation would be carried out in
Matematikgränd and the rest of Geografigränd The aim of the project was to
create a more pleasant and safe environment and to find sustainable solutions
that protect the environment in the long term.
• Within the project 137 apartments have been built in Geografigränd, totalling
8,380 m2 Atemp. In Matematikgränd and Geografigränd extensive renovation
of 405 apartments, equating to 41,600 m2 Atemp is being carried out, where
Matematikgränd 9 was first as the pilot building.
50
Sustainable cities – Energy efficiency Renovation and its Economy
Sustainable cities – Energy efficiency Renovation and its Economy
51
Sustainable Ålidhem. Financial conditions for investments
Sustainable Ålidhem. Matematikgränd 9. Energy Efficiency Improvement
• In Ålidhem, Bostaden AB estimated profitability of all energy efficiency measures
• Sustainable Ålidhem is a pilot project for sustainable city development The primary
together in a package. However, this is not a stated strategy within the company.
• Present values of future cash flows have been used when calculating profitability.
The yield demand is usually 6–7 per cent. However in Ålidhem it has been
5 per cent.
• Bostaden values the net operating income for a project against the current yield
requirement in the area, i.e. how the building’s valuation will be affected by the
measures in question.
• When deciding on investment the first year’s income result is used as a basis, but
there is no requirement that one should have a positive result in the first year.
Definition of profitability
Business profitability with a perspective of
long-term sustainability of investment decisions.
Model for profitability
assessment
Present value calculation.
Yield demand
5 per cent, nominal.
Energy costs
Energy costs for electricity and district heating
are assumed to increase 5 per cent annually,
in addition to inflation.
Maintenance costs
Assumed to reduce by approx. 10 SEK/m2, year
(~1.1 €).
Financing
Own capital and subsidy from the National
Delegation for Sustainable Cities.
goal of the project was to reduce energy end use in the area, create a more pleasant
and safer environment and convert Ålidhem to a sustainable urban area.
• The building related energy end use before renovation was 193 kWh/m
Atemp per
annum and the use of household electricity was 28 kWh/m Atemp per annum. After
renovation energy end use has been reduced to 113 kWh/m2, a reduction of 42 per
cent. Household electricity was reduced by 32 per cent to 19 kWh/m2 Atemp per
annum.
2
2
Energy efficiency measures
• Additional insulation facade, internal, 100 mm.
• Raise roof and additional insulation attic.
• Renovate with high performance windows, U-value 1,1 W/m , K, yr.
• Installation of supply and exhaust air ventilation system with heat exchange,
2
efficiency level 85 per cent.
• New hot water circulation pipes.
• New heat exchanger and new heating distribution system.
• Individual metering and invoicing of hot water.
• 121 m Photo Voltaics.
2
Brief facts – Matematikgränd 9
The Photo Voltaics Installations at Matematikgränd 9.
(Source: Bostaden)
52
Sustainable cities – Energy efficiency Renovation and its Economy
Sustainable cities – Energy efficiency Renovation and its Economy
Year of construction:
Year of renovation: Size:
Type of building:
Energy end use before:
Energy end use after:
1970/1971
2009
10 apartments, total 925 m2 Atemp
Staircase entry block (without elevators)
193 kWh/m2 Atemp per year
113 kWh/m2 Atemp per year
53
Sustainable Ålidhem. Matematikgränd 9. Results
Sustainable Ålidhem. Lessons Learned
• The investment for renovation of the pilot building in Matematikgränd was
• In addition to the energy-saving measures Bostaden has installed hot-water -con-
8.8 MSEK (~1.0 M€), of which 5.2 MSEK (~0.6 M€) was estimated to have
been used for energy efficiency measures, exclusive of Photo Voltaics. This is
the equivalent of 10,000 SEK/m2 Atemp (1 100 €) respectively 5,900 SEK/m2 Atemp
(~650 €) at 2010 values.
nected washing machines in one of the common laundry rooms in Ålidhem. The
aim was to reduce the washing machine’s electricity usage, and replace electricity
with district heating. In total it is estimated to save about 3,700 kWh of electricity
per washing machine per year. One lesson learned is that the distance between the
washing machine and hot water circulation loop should be as short as possible.
• The high costs per square metre are due to the fact that the pilot building project
conditions were tested in Ålidhem. The table
below shows the results. Besides inclination
and orientation it is deemed that the height
of the building also has significance. One
type of solar cell was tested on a building in
Geografigränd that is higher than the buildings
in Matematikgränd 9. The wind meant that
smaller amounts of snow accumulated on the
roof and solar cells in Geografigränd, while
the solar cells in Matematikgränd were snowcovered most of the winter.
• The actual energy end use for heating, hot water and building services was
monitored after the renovation, in 2012, at 113 kWh /m2 Atemp per annum, which
is 8 kWh more than estimated. The energy efficiency achieved thus amounts to
approximately 42 per cent.
• In addition to the reduction in energy end use as shown in the diagrams,
even the use of household electricity has decreased by 32 per cent, from
28 to 19 kWh/m2 Atemp per annum.
• A reduced need of purchased energy to 78 kWh/m
15 years
rented
area per annum (~88 €) before renovation. After renovation rents were increased
to 1,021 SEK/m2 rented area per annum (~113 €), an increase of about 28 per cent.
54
The diagrams show the results of the renovation of Matematikgränd 9 in Umeå, with
respect to energy end use and economics. The red bars show the energy use before and
after renovation, and the calculated energy efficiency improvement. The green bars
show the rental levels before and after and the energy costs before and after renovation.
Sustainable cities – Energy efficiency Renovation and its Economy
Case A
80,000 SEK/m
Case B
43,000 SEK/m2
96,000 SEK/m
25 years
2
52,000 SEK/m2
110,000 SEK/m2
59,000 SEK/m2
• Case A: All solar energy produced can be used to replace purchased
building services electricity in several buildings.
2
2
20 years
2
Comparison of the present value for solar cells in SEK per square meter Atemp,
with a cost of capital of 5 per cent and no assumed energy price rise.
2
• Apartment rents in Matematikgränd 9 had an average rent of 795 SEK/m
per year.
However, only 2.5 kWh/m was used as building services electricity in the building.
In Sweden the economic viability of PV cells is strongly dependent on the extent to
which the electricity produced can be used in your own building. The table below
shows a comparison of the current value depending on the percentage of solar
electricity which can be used to replace purchased building electricity.
2
2
• Different types of solar cells under a variety of
was conducted on a small scale. When Bostaden continue with the project it is
estimated the price per square metre will be considerably reduced and profitability
will improve correspondingly.
Atemp per annum gives a
cost-saving of 85 SEK/m (~9.4 €), calculated at 2013 values.
• The PV cells on the pilot building produced a total of 11 kWh/m
Inclination
Orientation
Efficiency
(kWh/kWt)
Production on a
clear day (kWh)
Matematikgränd 9
– Silicon
14°
West
598–622
50
Matematikgränd 9
– Thin film
14°
West
635–656
53
Geografigränd
– Silicon
18°
South
800
137
Sustainable cities – Energy efficiency Renovation and its Economy
• Case B: Only 25 per cent of the solar energy produced can be used
to replace purchased building services electricity in one building.
The remainder is sold for 30 öre/kWh (~0.03 €/kWh).
55
Sustainable Ålidhem. Summary
• The diagramme to the right shows the total investment and additional investments
for energy efficiency measures calculated in 2013 values, as well as the cost of
every kilowatt hour saved in the project. The left-hand diagramme shows energy
end use before renovation and the estimated energy end use after renovation.
• Measures which improve energy performance are defined as energy efficiency
measures. Measures such as extra monitoring equipment/audits, energy-efficient
appliances and Photo Voltaics/thermal solar panels are not counted as energyefficiency measures in the diagramme.
• The pilot building in Sustainable Ålidhem almost reaches the calculated energy
savings and therefore achieves an energy-performance improvement of 42 per
cent. The building’s new energy performance is 113 kWh/m2 Atemp per year.
• The total cost of the project was approximately 10,000 SEK/m
Atemp (~1,100 €)
of which almost 60 per cent went to energy efficiency measures. This high proportion depended mainly on the fact that it was a pilot project where the administrative costs are shared across a small number of apartments.
2
• If an energy cost of 1.1 SEK/kWh (~0.12 €/kWh) is assumed it can be seen in
the right-hand diagramme that the energy efficiency measures implemented at
Matematikgränd cannot be financed solely by reduced energy costs.
56
Sustainable cities – Energy efficiency Renovation and its Economy
Sustainable cities – Energy efficiency Renovation and its Economy
57
About the HSB tenant owned association Brf Hilda
• HSB Brf Hilda is a tenant owned association in Rosengård, in western Malmö.
The association is the second biggest tenant owned association in Malmö and was
built in the late 1960s. The association has 767 apartments in 16 different buildings.
• Initially Rosengård was presented as an area of the future, with good apartments
HSB Tenant Owner Association
BRF Hilda
This chapter demonstrates how the tenant owner association Hilda have assessed profitability in conjunction with
renovation of their buildings in Rosengård. The project
is part of Malmö Municipality’s project – Rosengård in
Transformation.
and green areas for leisure and play, but a more negative image started to appear
even before the area was completely finished. During the past 40 years the image
has strengthened of a concrete jungle characterized by segregation, high unemployment levels and criminality. That picture, however, has become more nuanced
in recent years, among other things as a result of efforts made within the project
Rosengård in Transformation.
“When Hilda turned up it was almost too good to be true. It felt as if we have to mobilize everything we can to help them implement what they want to do and to get as
far as possible. It seems that they have found a business model that no one else dared
to try and is now being tested on a large scale to see if it really works. And if it does
we can promote it in the real estate business and attract others to implement the same
type of change and renovation.”
Trevor Graham, former head of Malmö’s Environmental
Management Department for Consumption and Lifestyle
• Brf Hilda does not see itself as a victim of the negative image of Rosengård.
The association has members who have lived here since it was built and who
are committed to the place and the area.
• Brf Hilda’s properties had a rateable value of 435 MSEK in 2014. The booked
value is 313 MSEK.
Financial key figures (2013/2014)
Turnover:
Net operating income
Equity:
Debt:
Solidity:
46 MSEK
17 MSEK
6.8 MSEK
315MSEK
2%
Sustainable cities – Energy efficiency Renovation and its Economy
59
Sustainable Hilda
Sustainable Hilda. Financial Preconditions
• About 2,300 people live in Brf Hilda, which equates to nearly 10 per cent of
• The tenant association Brf Hilda has used a business model where improved energy
Definition of profitability
–
Direct payback.
• The plan for fee increases was initially to increase by 10 per cent before the renova-
Model for profitability
evaluation (energy
measures)
Yield demand
Board decision.
Energy costs
District heating: 0,57 SEK/kWh (~0.06 €/kWh).
El: 1,40 SEK/kWh (~0.16 €/kWh).
No energy cost increases.
Financing
Equity, loan and grants from the National Delegation
for Sustainable Cities and Life+.
Rosengårds population.
efficiency and reduced energy costs have partly funded the sewage pipe change and
bathroom renovations.
• Up to the year 2000 no major measures were implemented regarding ventilation,
heating or water systems in Brf Hilda. In the mid-2000s the buildings suffered
regular water damage which resulted in the association’s insurance company
threatening to cancel its insurance.
tion and then by 3 per cent in 2012, 2014 and 2016, corresponding to inflation.
When the renovation was completed in 2012 high interest rates made it necessary
to increase fees by 10 per cent both in 2013 and the last two years, resulting in an
overall increase of 25 per cent.
• Brf Hilda had long refrained from major maintenance activities and instead saved
money. In 2006, there was therefore a major deferred maintenance need, but the
financial situation in the association was good.
• Sustainable Hilda had been granted 6.1 MSEK (~0.7 M€) from the National Dele­
gation for Sustainable Cities and approximately 7 MSEK (~0.8 M€) from CLICC
with a requirement for counter-financing with the same amount. A total of 6 MSEK
(~0.7 M€) of grants was used.
• The current Board at the time encouraged members not to renovate their bath-
rooms as sewage pipe replacement, including renovation of bathrooms, would
be carried out within a few years.
• In the selection of measures and contractors the focus was on quality and opera-
• In conjunction with the decision to replace the sewage pipes further subprojects
tional benefits rather than investment.
were added on and this eventually became Sustainable Hilda. The basic question
was: What else can we do whilst the pipe shafts are open? They left no stone
unturned in their efforts to find more measures which could benefit the environment or the finances.
• All costs have been considered as investments, meaning that no part of the project
costs have been expensed as maintenance.
• Energy efficiency in Brf Hilda received a grant from the National Delegation for
Sustainable Cities and from Life+, an environmental project within the European
Union. Life+ has financed the project CLICC, in which Brf Hilda’s goal is to
halve its CO2 emissions and engage at least 70 per cent of its members in a more
sustainable life style.
• Hilda’s renewal project started in 2010. In addition to the planned measures
there arose other pressing issues that the board had to deal with, such as facade
renovation, installation of mail boxes, replacing communications provider and
a PCB clean-up. This was a major task for a tenant owner association’s board.
60
Sustainable cities – Energy efficiency Renovation and its Economy
Sustainable cities – Energy efficiency Renovation and its Economy
61
HSB Tenant Owner Association Brf Hilda. Energy Efficiency Improvement
Sustainable Hilda. Results
• Sustainable Hilda was originally a project comprising replumbing with new sew-
• The total investment for Sustainable Hilda was 216 MSEK (~24 M€) equivalent
age pipes, bathroom renovation and the installation of a supply and exhaust air
ventilation system with heat exchange. Since the pipe shafts were open anyway
the tenant owner association wanted to take advantage of this and carry out
several measures to reduce energy end use. The project was developed to improve
energy efficiency and thus allow energy savings to partially finance the pipe
change.
• Despite the fact that it is the responsibility of individual members to renovate
their own bathrooms after a sewage pipe change, the Board decided to shoulder
this responsibility. The reason for this was to avoid the risk of individual members
hiring low-budget firms with the consequent risk of water damage in the future.
• The buildings had a relatively low energy end use before renovation. In 2009,
the energy performance was 144 kWh/m2 Atemp and year. The feasibility study for
the project indicated that this was because not all the fans worked, and that the
approved mandatory ventilation control (OVK) protocols were incorrect.
• After adjusting the air flows, energy end use in 2009 was 152 kWh/m
Atemp per
year. According to calculations the energy efficiency measures would reduce
energy demand by 30 per cent, to 106 kWh/m2 Atemp per year. So far, an energy
performance of 115 kWh/m2 Atemp per year has been achieved.
2
Energy efficiency measures
• Additional insulation interior walls (ongoing).
• Conversion of the Supply and exhaust air ventilation system ta a balanced
ventilation system with heat exchange, efficiency level 60 per cent.
• Individual metering of water.
• New heating distribution system and adjustment.
• New heat exchanger.
• New building operation control system.
• Variable speed fans.
• Installation of radiator thermostat valves.
• 500 m Photo Voltaics (solar cells).
to 11,600 SEK/m2 Atemp (~1,290 €). Thereof additional investment for energyefficiency measures amounted to approximately 17 MSEK (~1.9 M€), which
corresponds to 900 SEK/m2 Atemp (~100 €).
• Energy performance was improved from 152 to 115 kWh/m
Atemp per year in
2013. In total, this means an energy efficiency of 24 per cent. However, the
renovation is not yet entirely completed, facade renovation is ongoing and several
of the technical systems are in the process of being tuned. Brf Hilda expects to
achieve a 30 per cent saving by 2015 when the renovation is complete.
2
• A reduced need for purchased energy of 37 kWh/m
Atemp per year means a cost
saving of 40 SEK/m Atemp year (~4.4 €), calculated at 2013 values.
2
2
• In conjunction with the renovation, fees to the association were raised from
640 SEK/m2 Atemp per year (~71 €) to 800 SEK/m2 Atemp per year (~89 €),
an increase of 25 per cent.
2
Other measures
• Hot water-driven household appliances.
The diagrams show the outcome of the renovation of BRF Hilda in Malmö with respect
to energy end use and economics. The red bars show energy end use before and after
renovation as well as the calculated energy performance. The green bars show the
rental levels before and after as well as energy costs before and after renovation.
Brief facts – Sustainable Hilda
Year of construction:
Year of renovation: Size:
Type of building:
Energy end use before:
Energy end use after:
62
1969–1970
2010–2012
18,602 m2 Atemp, 767 apartments
8 high rise and 8 low rise
152 kWh/m2 Atemp per year
115 kWh/m2 Atemp per year
Sustainable cities – Energy efficiency Renovation and its Economy
Sustainable cities – Energy efficiency Renovation and its Economy
63
Sustainable Hilda. Lessons Learned
• The most important lesson from the renovation of Brf Hilda is the difficulty for
small property owners like tenant owned associations to create a good project
organization. The clients, in the form of the board, are often laymen when it
comes to the renovation process and generally have another full-time job. As a
consultant in such a project one must control and make things clear. At the same
time the consultant must be aware both that the board often relies completely on
the consultant’s recommendations and that a consultant might be held responsible
for things that do not follow the plan.
Sustainable Hilda. Summary
• Another experience is that it is difficult to predict all possible events in such a
complex project as Sustainable Hilda. For example the sewage pipe change turned
out to be more expensive than expected, which in turn affected the overall project
budget and thereby the implementation of the energy efficiency measures. The
structure of the district heating tariffs was changed whilst renovation was going
on which significantly deteriorated the original cost estimates.
• Another lesson from the project is the importance of knowing the technical
• The left-hand diagram shows energy end use before and after renovation,
as well as the calculated energy performance. The right-hand diagramme shows
the project’s investment, additional costs for energy efficiency, converted to
2013 values, and the cost per saved kilowatt hour.
• Measures that are considered to be energy efficiency measures are those that
improve energy performance. Measures such as additional monitoring equipment/
audits, energy-efficient appliances and Photo Voltaics are not considered as energyefficiency measures in the diagram on the right.
• Brf Hilda was expected to improve its energy performance by 30 per cent, to
conditions before the request for tender documents are announced. The accuracy
and consistency with existing monitoring protocols must be checked. In Brf Hilda
it turned out that large parts of the ventilation were not working, despite the
existence of an approved mandatory ventilation control (OVK) protocol.
106 kWh/m2 Atemp per year. So far, 80 per cent of the expected energy savings
have been achieved and energy performance is 115 kWh/m2 Atemp per year.
• The total investment for the project was 11,600 SEK/m
Atemp (~1,290 €),
of which 8 per cent were spent on energy efficiency measures.
2
• A reflection from the design stage is that more focus should have been put on
measures to reduce energy demand, such as additional insulation and improved
climate shell air tightness, rather than on advanced technology solutions. As the
project progressed it became clear that the technical solutions with all their
control systems were difficult to synchronize.
• Assuming an energy cost of 1.1 SEK/kWh (~0.12 €/kWh) it can be seen in the
right-hand diagram that energy efficiency can be financed by the reduced energy
costs.
• When so many different technical solutions and control systems are installed
a plan should be developed for how data traffic and servers are to be managed.
Internal heat losses in server rooms can cause increased cooling requirements,
which must be considered in the design phase. It is important to properly document all installations and control systems in order to ensure a proper future
property management.
64
Sustainable cities – Energy efficiency Renovation and its Economy
Sustainable cities – Energy efficiency Renovation and its Economy
65
Overall Comparison of the Companies. Economic Indicators
• All three property companies included in this
report have elements of social responsibility in
their owner’s directives, but these elements are
expressed in different ways and with different
focus.
Svenska Bostäder
Analysis and Conclusions
This chapter will summarise and analyse the profitability
of the different projects.
• ÖBO and Bostaden have a higher yield than
Svenska Bostäder and Brf Hilda 7–7.5 per cent
compared to 3–5.5 per cent.
• Yield is calculated as net operating income
divided by property value, and is thus influenced by how the properties are valued. Svenska
Bostäder ÖBO and Bostaden calculate yield on
the basis of the book value of the properties.
A comparative yield has been calculated for
BRF Hilda by the authors of the report.
Bostaden
HSB Brf Hilda
Owners
directives
Focus on maintenance, economic
long-term management and social
sustainability
Integrating social,
economic and
environmental considerations in business
Long-term perspective, openness,
compassion, professionalism and equality
of all people
Economic surplus
back to the association to create good
living conditions for its
members
Turnover 2013
2,483 MSEK
1,520 MSEK
974 MSEK
46 MSEK
Net Operating
Income 2013
541 MSEK
462 MSEK
364 MSEK
17 MSEK
Solidity
71 %
23.4 %
21.2 %
2%
Yield 2013
3%
7%
7.4 %
5.5 %
• HSB Brf Hilda is different from the other pro-
jects in that a tenant owner association does not
have the same requirements for yield and profitability that a property company does, but neither
does it have the same staff resources.
ÖBO
• Svenska Bostäder has high solidity, i.e. a large
share of own capital, compared to the others.
This provides greater financial flexibility.
Sustainable cities – Energy efficiency Renovation and its Economy
67
Comparison between Projects. Profitability Criteria
• The Svenska Bostäder, ÖBO and Bostaden
projects were pilot projects for larger areas.
Brf Hilda chose to renovate a complete area.
• Svenska Bostäder has carried out several
Type of project
projects in different areas and successively
carried forward the experiences gained in
the subprojects.
• The projects have mainly been financed by own
capital. Partial funding has been provided by the
National Delegation for Sustainable Cities and
EU.
• The City of Stockholm has allowed Svenska
Bostäder to operate with a reduced require of
yield during the period 2009–2013 and for
certain periods with a negative result.
• How companies assess future development of
energy costs differ, which in turn influences
profitability assessment in the projects.
Definition of
profitability
Sustainable Hilda
Pilot project
119 of 23,000
apartments
Pilot project
10 of 15,500
apartments
Pilot project
767 of 767
apartments
Business economics
and socio-economics
Socio-economics
Business economics with a long-term
perspective
–
Focus on reduced
environmental impact
and increasing the
area’s attractiveness
Yield valuation
(present value)
and yield per year
Payback
5 per cent, excl.
inflation
Board decision
5 per cent in addition
to inflation
No increase above
inflation
Yield valuation
(present value)
Yield Demand
4-4.5 per cent,
incl. inflation
–
Assumed to increase
–
Financing
Sustainable Ålidhem
Matematikgränd 9
Pilot project
350 of 25,500
apartments
Model for profitability assessment
Assumptions
for energy cost
development
68
My Green
Neighbourhood
Sustainable Järva
Own capital and
state grant
Own capital, state
grant and certain
municipal support
Own capital and
state grant
Overall Comparison Between Projects.
Selection of Measures – Climate Shell
• All projects have chosen to provide additional
insulation for facades, in varying degrees. In six
of the nine projects attics have been additionally
insulated and in three of the buildings basements
have been additional insulated. In general, the
insulation thickness in the attics is greater than
in the facades.
• With one exception all projects have upgraded
windows to a U-value around 1,0 W/m2, K year.
Sustainable Ålidhem
Matematikgränd 9
Sustainable Hilda
Additional
insulation
facade
6/6 insulated with
50–100 mm.
Average 82 mm
Yes
100 mm
Yes, internal
insulation in 141 of
767 apartments
Additional
insulation attic
4/6 insulated with
200–300 mm.
Average 250 mm
Yes
Yes
–
Additional
insulation basement
3/6 insulated with
50–100 mm.
Average 77 mm
–
–
–
Windows
6/6 have changed/
renovated windows to
U-value 0.9–1.1.
Average U-value 1.0
U-value 0.9
U-value 1.1
–
Doors
4/6 changed/
renovated doors to
U-value 1.4–2.0.
Average U-value 1.75
–
–
–
Own capital,
loan, state grant
and EU grant
Sustainable cities – Energy efficiency Renovation and its Economy
My Green
Neighbourhood
Sustainable Järva
Sustainable cities – Energy efficiency Renovation and its Economy
69
Overall Comparison Between Projects.
Selection of Measures – Energy-Efficient Installations
• Supply and exhaust air ventilation system
with heat exchange, have been installed in all
projects, with an efficiency level between 60
and 85 per cent.
• The heating distribution system has been
replaced and tuned in all the projects.
•
•
•
ÖBO and Bostaden decided to install individual
metering and invoicing for domestic hot water
(IMD). ÖBO estimate that domestic hot water
consumption will be reduced by 30 % in the
existing buildings by use of IMD.
Svenska Bostäder decided to install IMD in only
one building in Sustainable Järva. Their previous
experience of IMD has been high installation
and administrative costs and low reduction in
end use.
Brf Hilda has installed individual metering for
hot and cold water and estimate energy savings
of 20–30 per cent. The decision has also been
motivated by a sense of fairness where everyone
pays for what they use.
Sustainable Järva
Balanced
ventilation with
heat exchange
6/6 have installed
balanced ventilation with
heat exchange with
efficiency levels between
65 and 90 %.
Average efficiency
level 75 %
Efficiency level 85 %
Heating
distribution
system
6/6 Replacement and
tuning
Replacement and
tuning
Lighting
5/6 have installed LEDlighting and one project
has even installed
presence control
Movement control.
LED-lighting
6/6 have installed highperformance tap mixers,
1/6 project has installed
IMD hot water and 1/6
project has installed heat
recovery from grey water
IMD hot water
2/6 have installed thermal
solar collector panels,
4/6 have installed Photo
Voltaics
Thermal solar collector panels and Photo
Voltaics
Water saving
measures
• All projects have chosen to install some form
of solar energy. Bostaden has chosen to install
different kinds of solar cells to evaluate the
technology.
70
My Green
Neighbourhood
Solar energy
Overall Comparison Between Projects.
Results Energy Efficiency Improvement
Sustainable Ålidhem
Matematikgränd 9
Efficiency level 85 %
Sustainable
Hilda
Efficiency level
60 %
• An improved energy efficiency of between
• The average achieved energy performance
was around 100 kWh/m Atemp and year.
2
• All projects presented in this report are pilot
Replacement and
tuning
–
Replacement
and tuning
–
projects. They present lessons learned from
different measures and methods. The projects
can be used to create learning curves, i.e. reduce
costs for future energy efficiency renovation.
• It is perfectly possible to carry out energy
efficiency measures on Million New HomesProgramme buildings without jeopardizing
their cultural heritage values when it comes
to plastered facades.
• Tenant dialogue is an important tool in the
renovation process.
IMD hot water
Photo Voltaics
IMD water
Sustainable Järva
24 and 42 per cent has been achieved in
the verified projects.
My Green
Neighbourhood
Sustainable Ålidhem
Matematikgränd 9
Sustainable Hilda
Energy performance before,
kWh/m2 per year
(excl. household
electricity)
134–195.
Average 144
212
193
152
Energy goal,
kWh/m2 per year
Average 101
–
–
106
Estimated new
energy performance, kWh/m2
per year
93–120.
Average 100
67
105
106
Energy performance result,
kWh/m2 per year
(excl. household
electricity)
83–125.
Average 96
–
113
115
Energy efficiency
improvement
30–40 %.
Average 36 %
–
42 %
24 %
Photo Voltaics
Sustainable cities – Energy efficiency Renovation and its Economy
Sustainable cities – Energy efficiency Renovation and its Economy
71
Comparison. Energy Efficiency Improvement
Overall Comparison Between Projects. Economic Results
• The diagramme on the right shows the levels
• There is a considerable difference in total cost
of efficiency achieved in the various projects.
Data is not available for confirmed energy use
after renovation in the Storkvarnen 4 block, the
Nystad 8 block and My Green Neighbourhood.
In these cases the level of energy efficiency has
been calculated based on the expected energy
end use.
of renovation between the projects. It varies
between 11,600 SEK/m2 and 22,000 SEK/m2
(~1,290–2,440 €).
• The proportion of the investment dedicated
to energy efficiency measures also varies considerably among the projects. The proportion
is between 7 and 59 per cent of the total investment.
• The achieved energy efficiency improvement
lies in the interval 24 to 42 per cent. On average
an energy efficiency improvement of 35 per cent
was achieved.
• The life cycle cost (LCC) is calculated for 40
years, with a cost of capital of 5 per cent and
an assumed energy cost increase of 2 per cent
in addition to inflation. Maintenance costs have
been assumed to reduce by at least 10 SEK/m2
per year (~1.1 €) in the LCC calculations for the
energy efficiency measures implemented.
• The new energy performance is somewhat lower
than estimated in several projects. This depends
largely on inadequate data before renovation and
incorrect basic assumptions. Above all, the
tenants’ hot water use has been difficult to
predict.
• Energy efficiency measures are defined as
those which increase the building’s energy
performance. Additional monitoring equipment/
audits, energy efficient appliances and thermal
solar/Pare not considered as energy efficiency
measures.
Sustainable Järva
My Green
Neighbourhood
Sustainable Ålidhem
Matematikgränd 9
Sustainable Hilda
Total renovation
cost (SEK/m2)
12,000–22,000.
Average 14,300
16,000
10,000
11,600
Of which energy
efficiency
(SEK/m2)
1,100–3,300.
Average 1,600
7,300
5,900
900
Share of total
cost which
is counted
as energy
efficiency (%)
7–20 %.
Average 12 %
46 %
59 %
8%
LCC – renovation (SEK/m2
Atemp)
11,300–17,600.
Average 13,900
11,600
4,300
11,600
LCC – energy
efficiency
(SEK/m2 Atemp)
-6,200–800.
Average -2,800
800
-400
-2,700
* No monitored data for energy use after renovation is available. Efficiency levels based on expected energy savings.
72
Sustainable cities – Energy efficiency Renovation and its Economy
Sustainable cities – Energy efficiency Renovation and its Economy
73
Comparison. Economics
The Calculation Assumptions’ Impact on the Profitability Assessment
• The diagramme on the right shows the project’s total investment and the size of
• The diagrammes to the right show the life-cycle costs for renovation exclusive
the amount estimated to have been invested in energy efficiency measures.
of energy efficiency measures and the life-cycle cost of the energy efficiency
measures. An average energy cost of 1.1 SEK/kWh (~0.12 €/kWh, based on the
latest Nils Holgersson report) and a life span of 40 years has been used. In the
upper diagramme the cost of capital has been set at 5 per cent and the energy cost
increase at 2 per cent. In the lower diagramme both cost of capital and energy cost
increase have been set at 3 per cent.
• The pink dots show the energy efficiency cost (SEK per kWh) calculated for an
average life cycle of 40 years for energy efficiency measures.
• The projects with a high investment for energy efficiency often have a high
cost per saved kWh.
• Energy efficiency measures are defined as those which increase the building’s
• There is a relationship between the number of renovated apartments and the
energy performance. Additional monitoring equipment/audits, energy efficient
appliances and solar energy technologies are not considered as energy efficiency
measures. The energy efficiency measures have been estimated reduce main­
tenance costs by 10 SEK/m2 Atemp per year (~1.1 €).
energy efficiency cost (SEK/kWh). Both in my Green Neighbourhood and
Ålidhem a small share of the total number of apartments have been renovated as
pilot projects before the companies continue with more large scale renovations.
This results in costs that will later be distributed over a larger number of apartments but are currently being appropriated to a smaller number of apartments.
• A comparison between the two charts shows that with a lower cost of capital and
a higher energy cost increase, the life-cycle cost of the renovation measures will
increase slightly, while life-cycle costs of the energy efficiency measures will
reduce.
• In five of the nine projects the energy efficiency is lower than the cost of buying
a kWh, assuming an average energy cost of 1.1 SEK/kWh (~0.12 €/kWh).
* There are no monitored values for energy end use after renovation available in this project.
The cost per kilowatt hour is calculated in proportion to the expected energy savings.
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Sustainable cities – Energy efficiency Renovation and its Economy
• The calculations show how sensitive profitability calculations are depending on
the prerequisites for the calculations set by the property company. It is important
that the cost of capital and the increases in energy costs are chosen to reflect the
company’s operational and management targets.
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Reference List
Literature (Listed documents are only available in Swedish)
Other (Listed documents only available in Swedish)
Wahl, Jenny. Historien om Hållbara Hilda 2007–2012. BeBo, 2013 (The History
of Sustainable Hilda 2007–2012. The Energy –efficiency Network for Residential
Buildings, 2013).
Brf Hilda Årsredovisning 2013-05-01–2014-04-30 (Brf Hilda Annual Accounts).
Skärpta energihushållningskrav – redovisning av regeringen uppdrag att se över och
skärpa energireglerna i Boverkets byggregler. Boverket, 2014 (Enhanced energyefficiency requirements – Account of the government´s task of reviewing and
tightening of energy regulations in the building sector regulations. The National
Board of Housing, Building and Planning, 2014).
Byman, Karin; Jernelius, Sara. Ekonomi vid ombyggnader med energisatsningar –
Slutrapport. Stockholm Stad 2012 (Economics in renovation involving energy
measures – Final Report. City of Stockholm 2012).
References
Fastighetsägarna, HSB, Hyresgästföreningen, Riksbyggen och SABO, Fastigheten
Nils Holgerssons underbara resa genom Sverige – en avgiftsstudie för 2014
(Property Owners Guide Nils Holgersson – fees in 2014).
Svenska Bostäder. Årsredovisning 2013 (Annual accounts 2013).
Svenska Bostäder. Rapport till Boverket 2013, Projekt Hållbara Järva, Stockholm
Stad (Report to The National Board of Housing, Building and Planning 2013,
Sustainable Järva Project City of Stockholm).
Örebrobostäder. Årsredovisning 2013 (Annual Accounts 2013).
Home pages
Örebrobostäder. Lägesredovisning Örebro Bostäder AB – Mitt Gröna Kvarter 2013
(Status Report My Green Neighbourhood 2013).
www.pwc.se. Komponentavskrivning enligt K3 – vad innebär ”betydande
komponenter”? (2014-11-04) (Component depreciation in accordance with
K3 – definition of “significant components”? (2014-11-04))
Örebro Bostäder. Mitt Gröna kvarter – Ansökan till delegationen för hållbara städer
2010 (My Green Neighbourhood – Application to National Delegation for Sustainable Cities 2010).
Contact persons
SABO. Riktlinjer för komponentredovisning av förvaltningsfastigheter
(The Swedish Association of Public Housing Companies. Guidelines for
component accounting for investment properties).
Ann Hermansson, Örebro Bostäder.
Cecilia Svedin, Örebro Bostäder.
Johan Lagrelius, Umeå kommun.
Lena Eriksson, Malmö Stad.
Erik Andersson, Svenska Bostäder.
Bostaden. Årsredovisning 2013 (Annual Accounts 2013).
Print: Edita Bobergs.
Art.No: 12202 Miljöförvaltningen 2016-01
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Environment and Health administration
Energy centre
SE-104 20 Stockholm
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Sustainable cities – Energy efficiency Renovation and its Economy