Life Cycle Costing

Life cycle costing (LCC) is applied as an assessment tool to estimate the entire cost of typically large-scale assets, for example, buildings and infrastructure objects with a considerably long serviceable life. LCC needs to consider and accumulate all types of cost, and since these occur at different times they are typically discounted to a common point in time. Environmental LCC is a specific type of LCC, which was designed to be aligned with the ISO 14040 standard for Life Cycle Assessment (LCA) and shares some key components with Environmental LCA to allow a consistent combination of both in one assessment. Societal LCC is another type of LCC, which includes externalities and attempts to provide a holistic assessment, thereby covering both economic and environmental aspects. For renewables, aspects such as feed-in tariffs and subsidies need to be considered in an LCC model. A case study for a combined heat and power plant is used to illustrate the application of Environmental LCC.