How to utilise your portfolio to produce power

COMMENT For real estate organisations like Derwent London, the drive towards net zero carbon is one that involves many moving parts, not only in terms of how we embed it within our day-to-day business but also how it features in the buildings we develop and operate. Many of the components are straightforward; the need to reduce our energy consumption, both landlord and occupier, to design out and not build in embodied carbon, and to move away from using fossil fuels such as natural gas. They can be challenging to implement, however, it requires broad commitment, innovative thinking, and stakeholder engagement to help get them off the ground. How these challenges manifest will be unique to each organisation but underpinning them is the ongoing need for energy, in particular, electricity. While it may sound counter-intuitive that electricity consumption, and more specifically renewable electricity consumption, is fundamental to carbon reduction and net zero, an important point of principle comes forward. Provenance. Where does our electricity come from and if we are to use it, how is it helping to reduce carbon? These are the questions we asked ourselves a few years ago when we developed our net zero carbon pathway. Holding the power At that time, we are (and still are) procuring our electricity on REGO (renewable energy guarantee of origin) backed tariffs. However, we learnt that we could not say where our electricity was coming from, and in wanting to know more about what we were buying, we found the market could not always help us. Likewise, while we design as much on-site power generation as possible, usually in the form of solar PV panels, being London-based meant our existing properties and development schemes would always be restricted on what we could install given roof space constraints. From there, we started to look at the range of alternative on-site options, as well as the supply market, and found we could not achieve all our business and net zero requirements through further on-site solutions or one single market offering. So, we went back to the drawing board and approached the problem from a different angle. In doing this, we asked ourselves the question – if we can generate electricity on a small scale on our buildings, where could we generate it at a larger scale? The answer became apparent on a trip to our Scottish portfolio, just north of Glasgow. Seeing renewable energy assets on land adjacent to ours made us think – can we do this ourselves? The more of our own research we did, the clearer it became that we could generate renewable electricity at a scale. We had the space, in this case land, we had the demand – ourselves and our occupiers and a solid investment appraisal. Circular approach Fast forward to today and we have secured a resolution to grant planning for a solar park which will cover 100 acres, comprising of more than 60,000 solar panels, and capable of generating 18.4MW of electricity. This will be enough to cover more than 40% of our total electricity needs and will allow us to have end-to-end visibility, prove additionality and enable our occupiers to access traceable power, which will assist them with their net zero programmes. So where are we going from here? With construction works expected to commence over the next 12 months, we are also looking ahead to see where we can add generation assets to bring more of our needs under our control. This circular approach is replicable and shows that the real estate sector can make a contribution to the UK plc move to net zero. John Davies is head of sustainability at Derwent London