1. DEEP – Dissemination of Energy Efficiency Measures in the Public Building Sector (EC DG TREN, 2005-2007) LIFE CYCLE COSTING A Tool for Energy Efficient Procurement The DEEP Toolkit. TOOL 2.c. Life Cycle Costing Guide for Senior LA Staff

2. DEEP – Dissemination of Energy Efficiency Measures in the Public Building Sector (EC DG TREN, 2005-2007) Overview What is Life Cycle Costing? Why should my Local Authority use it? How can my Local Authority use it? What are its limitations? Where can I find out more? The DEEP Toolkit. TOOL 2.c. Life Cycle Costing Guide for Senior LA Staff

3. DEEP – Dissemination of Energy Efficiency Measures in the Public Building Sector (EC DG TREN, 2005-2007) What is Life Cycle Costing? Life Cycle Costing (LCC) is a methodology that enables you to incorporate costs and benefits that occur over the lifetime of a product into your procurement decisions – rather than considering the initial capital cost of a product only. Costs and benefits – e.g. energy consumption, replacement of equipment or parts, consumables and disposal – they all affect the ultimate price, yet are rarely considered when selecting a product! The DEEP Toolkit. TOOL 2.c. Life Cycle Costing Guide for Senior LA Staff

4. DEEP – Dissemination of Energy Efficiency Measures in the Public Building Sector (EC DG TREN, 2005-2007) Why should my Local Authority use it? There are many benefits for Local Authorities in using Life Cycle Costing on a systematic basis: It can save you money It can reduce the time and effort involved in frequently replacing equipment It supports the purchase of better quality equipment It encourages more logical decision-making It supports local sustainable development In summary, life cycle costing supports your responsibility to the community to use public funds wisely and sustainably The DEEP Toolkit. TOOL 2.c. Life Cycle Costing Guide for Senior LA Staff

5. DEEP – Dissemination of Energy Efficiency Measures in the Public Building Sector (EC DG TREN, 2005-2007) Example 1: energy efficient lighting Standard 60W £0.50 X10 = £5 Energy efficient: 12 W £1 x 10 = £ 10 Energy efficient: 20 W £5 x 10 = £50 The DEEP Toolkit. TOOL 2.c. Life Cycle Costing Guide for Senior LA Staff

6. DEEP – Dissemination of Energy Efficiency Measures in the Public Building Sector (EC DG TREN, 2005-2007) Results – NPV, Energy & CO 2 The DEEP Toolkit. TOOL 2.c. Life Cycle Costing Guide for Senior LA Staff

7. DEEP – Dissemination of Energy Efficiency Measures in the Public Building Sector (EC DG TREN, 2005-2007) The DEEP Toolkit. TOOL 2.c. Life Cycle Costing Guide for Senior LA Staff

8. DEEP – Dissemination of Energy Efficiency Measures in the Public Building Sector (EC DG TREN, 2005-2007) How can my Local Authority use Life Cycle Costing? Identify types of procurement for which LCC is appropriate (e.g. buildings, energy and water using equipment). Identify staff responsible for procurement of equipment where LCC can be applied. Incorporate a requirement for LCC into your procurement policy – so that it becomes a systematic part of the procurement process. Provide training in use and benefits of Life Cycle Costing. Gain experience in using LCC, and adapt it for your needs. The DEEP Toolkit. TOOL 2.c. Life Cycle Costing Guide for Senior LA Staff

9. Limitations LCCA only takes account of the costs and benefits that accrue during Your ownership of the equipment, unlike Whole Life Costing / Life Cycle Impact Assessment in which the social and economic benefits related to its entire life-time are considered, e.g. Source: http://www.dk-teknik.dk/ydelser/miljo/LCA%20guide/3rd_ed/faq5.htm Typical coverage of life-cycle cost analysis The DEEP Toolkit. TOOL 2.c. Life Cycle Costing Guide for Senior LA Staff

10. DEEP – Dissemination of Energy Efficiency Measures in the Public Building Sector (EC DG TREN, 2005-2007) How can I find out more? Contains: Life Cycle Cost Analysis Tool Training materials for Procurement Staff Information on Procura+ Campaign – you can join! Plus Other tools to support energy efficient public procurement DEEP http://www.iclei-europe.org/deephttp://www.iclei-europe.org/deep The DEEP Toolkit. TOOL 2.c. Life Cycle Costing Guide for Senior LA Staff The sole responsibility for the content of this publication lies with the authors. It does not necessarily reflect the opinion of the European Communities. The European Commission is not responsible for any use that may be made of the information contained therein