RISK ANALYSIS FOR GREEN MARK RETROFITTING PROJECTS

Abstract

The primary objective set out under the 2nd Green Building Masterplan would be for at least 80% of the buildings in Singapore to achieve the BCA Green Mark Certified rating by 2030. However, participation in the Green Mark Scheme for existing buildings is relatively low when compared to new construction. The apparent reluctance of firms to invest in energy efficiency despite their potential savings and short payback periods is commonly termed as the “energy efficiency gap”. One of the factors which underlie the above phenomena would be risks and building retrofits are generally perceived to be high-risk investments (justified by the high hurdle rates and short payback periods imposed on project selection).

Previous studies of risks involved in building retrofits are scant at best and the current research would be the first of its kind which attempts to study the industry’s perception towards risks as well as the underlying factors that may have an impact on risk perception, albeit at an undergraduate dissertation level. The objectives of the research were achieved by means of a survey questionnaire administered on the local Energy Services Companies (ESCOs) and Facility Managers (FMs) populations with experience in past retrofitting projects. Data collected from the survey was then put through a series of statistical test in order to derive the findings.

The analysis of risk perception determined that both ESCOs and FMs perceive a large proportion of the risks factors to be fairly, if not very important, in terms of their impacts on project’s success. The correlation analysis, on the other hand, found that the underlying factors which could explain the variations in respondents’ risk perception were in the following order of importance, (i) respondents’ experience, (ii) targeted savings and (iii) age of buildings at the start of the retrofit. Several worrying trends with regard to existing institutional and organizational barriers were also observed to have contributed to the lack of participation by owners and FMs in the Green Mark (Existing Buildings) Scheme. These findings suggest that the industry still has a lot of ground to cover in order to meet the objectives set out in the Masterplan.