Uncertainty in Refurbishment Investment - Nearly Zero Energy Building Refurbishment - page 154

Fig. 1 NZER risk management process

4.1 Risk Management During Design Phase

Risk management is a constant process of decision-making that reduces to an
acceptable level the uncertainties associated with an investment (Condamin et al.
2006 ). Different risk management options are available to manage the challenges
during the design phase. For example, it is known that occupants are a source of
high uncertainty, and there is a great potential for reducing energy consumption by
motivating energy-efficient behavior. Studies have determined that occupant
behavior and operational aspects of energy use may be more effective than tech-
nological solutions (Gray and Zarnikau 2011 ). Therefore, costs of NZER could be
significantly reduced if the design engineer considers conservation as part of the
energy balance equation for NZER. This can be achieved by designing interven-
tion strategies that focus on appropriate involvement of the building occupants
(Fong and Lee 2012 ). An example would be developing a plan that enables
occupants to compare their electricity use to others (Peschiera et al. 2010 ).
Another approach to manage risk during design phase is using statistical models to
predict future energy prices and climate. This allows building stakeholders to reduce
the risk associated with the energy savings (Robert and Kummert 2012 ). Other tools
such as energy modeling software can be integrated with the statistical models to
obtain the most economical renewable equipment to achieve the energy balance. For
example, off-site generation energy prices that take into consideration market
volatility can be modeled so they are compared with on-site generation system costs.
Furthermore, designers can develop statistical models to predict climate conditions
to reduce the risk associated with renewable systems and building performance.

4.2 Risk Management During Construction Phase

During the construction phase of a NZER project, some risks can be easily
identified and controlled. For example, the building stakeholders might know that
they will be refurbishing a building that can have many unknown preexisting