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A techno-economic-risk decision-making methodology for large-scale building energy efficiency retrofit using Monte Carlo simulation

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  • Zheng, Donglin
  • Yu, Lijun
  • Wang, Lizhen

Abstract

Large-scale building energy efficiency retrofit (LSBEER) involves a large number of buildings with heterogeneous characteristics. Decision-making with regard to multiple-technology portfolios, optimal implementation strategy, and regional subsidy policy is a challenging task, made particularly difficult by the presence of various uncertainties. This paper proposes a techno-economic-risk decision making methodology (TERDMM) based on Monte Carlo (MC) simulation, as well as a novel multi-aspect assessment procedure. First, an energy-saving economic benefit cost model is suggested based on life cycle cost (LCC) analysis. Second, the concept of value-at-risk is suggested as an effective measure to control risk. Third, a financial subsidy model is proposed. The model is validated with regard to database quality, energy saving effect, and accuracy. It is found that the energy-saving rate obeys a normal distribution, similar to that found for actual retrofitted buildings. In addition, the paper discusses the influence of distribution functions, varying intervals of risk variables, and different discount rates on the results of decision-making. It is found that the TERDMM can support risk-conscious decision-making by explicitly quantifying risks. It is also found that there exists a logarithmic relationship between subsidies and energy savings. Compared with the traditional method, the TERDMM is a great improvement.

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  • Zheng, Donglin & Yu, Lijun & Wang, Lizhen, 2019. "A techno-economic-risk decision-making methodology for large-scale building energy efficiency retrofit using Monte Carlo simulation," Energy, Elsevier, vol. 189(C).
    • Handle: RePEc:eee:energy:v:189:y:2019:i:c:s036054421931864x
    DOI: 10.1016/j.energy.2019.116169
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    7. Qu, Ke & Chen, Xiangjie & Wang, Yixin & Calautit, John & Riffat, Saffa & Cui, Xin, 2021. "Comprehensive energy, economic and thermal comfort assessments for the passive energy retrofit of historical buildings - A case study of a late nineteenth-century Victorian house renovation in the UK," Energy, Elsevier, vol. 220(C).

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