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Benefits and Costs of Research: A Case Study of Cybernetic Building Systems.

pdf icon Benefits and Costs of Research: A Case Study of Cybernetic Building Systems. (2075 K)
Chapman, R. E.

NISTIR 6303; 167 p. March 1999.


BACnet; benefit cost analysis; building economics; cybernetic building systems; economic analysis; energy conservation; fire panels; fire safety; impact evaluation; life cycle costing; sensors; research impacts; resource allocation


The National Institute of Standards and Technology (NIST) is improving its resource allocation process by doing "microstudies" of its research impacts on society. This report is one of a series of microstudies prepared by NIST's Building and Fire Research Laboratory (BFRL). This report focuses on a critical analysis of the economic impacts of past, ongoing, and planned BFRL research for developing and deploying cybernetic building systems (CBSs) in office buildings. Building systems targeted for incorporation into CBS products and services include energy management, fire and security, fault detection and diagnostics, the real-time purchase of electricity, and the aggregation of building stock for multi-facility operations. A CBS is defined as a multi-system configuration that is able to communicate information and control functions simultaneously and seamlessly at multiple levels. Pressure to increase building systems performance and reduce costs has created a potential market for CBS products and services. BFRL is collaborating with industry on the development of CBS products and services and is providing a forum for conducting interoperability testing. This case study of BFRL's CBS-related research, development, and deployment effort illustrates how to apply in practice a seiies of standardized methods to evaluate and compare the economic impacts of alternative research investments. It is presented in sufficient detail to understand the basis for the economic impact assessment and to reproduce the results. It is based on past, ongoing, and planned research efforts. Thus, it includes CBS-related investment costs that have already occurred along with estimates of future investment costs and cost savings due to the us'e of CBS products and services. The results of this study demonstrate that the use of CBS products and services will generate substantial cost savings to the owners, managers, and occupants of office buildings across the natibn. The present value of cost savings nationwide expected from the use of CBS products and services in office buildings exceeds $1.1 billion ($1,176 million in 1997 dollars). Furthermore, because of BFRL's role as a facilitator and developer of key CBS enabling technologies, CBS products and services are expected to become available commercially in 2003. Without BFRL's participation, the commercial introduction of CBS products and services would likely be delayed until 2010. Consequently, potential cost savings accruing to the owners, managers, and occupants of office buildings over the period 2003 until 2010 would have been foregone. These cost savings are $90.7 million in 1997 dollars. These cost savings measure the return on BFRL's CBS-related investment costs of approximately $11.5 million.