Lifetime economics

In relation to construction, 'lifetime economics' means that the total costs of design, construction and the lifetime operation of buildings are considered. Knowledge about the buildings' use and operations is incorporated into the early phases and alternative solutions are assessed based on the total costs, including subsequent operating costs.

It is important to perform lifetime economics calculations given that operating expenses account for 60-80 per cent of a building's costs seen over a lifetime of around 50 years. It is therefore wise to consider the economic advantages of transferring resources from the operating phase to the design and construction phase, and thereby construct higher quality buildings with lower subsequent operating costs.


Various models are available for performing lifetime economics comparisons. The two main approaches are either to sum all the costs for the building's lifetime expressed in prices for a particular year (usually the year construction commences) using a discount rate, or to distribute all the expenses on a per annum basis throughout the building's lifetime.


Limited opportunity to apply lifetime economics considerations in the 16 construction projects being funded by Kvalitetsfonden


In relation to the Kvalitetsfonden construction projects, the opportunity to employ lifetime economics calculation models is limited by the fact that there is a fixed budget for each building which must not be exceeded. The use of lifetime economics models must therefore be limited to a comparison of alternative solution models and reprioritising within the fixed budget limit.