August 9 13:30
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Growthpoint Properties (JSE: GRT), the country’s largest real estate investment trust (Reit), is introducing a green energy benefit scheme called e-CO 2 at 10 of its properties in Sandton, Johannesburg. This is the next step in the rollout of its innovative renewable energy transition, a first for South Africa.
The major elements are in place for the scheme to debut in July 2025. Growthpoint will deliver the first green energy to its office buildings through wheeling, reducing carbon footprints and generating Renewable Energy Certificates (RECs) for tenants using the latest blockchain technology.
The Growthpoint e-CO 2 green energy benefit scheme (e-CO 2 is short for electricity minus carbon
dioxide and pronounced “eco two”) is a solution that will deliver green energy through
wheeling from multiple renewable sources — water, wind, sunshine — directly to commercial
properties, Growthpoint said. It is made possible by Growthpoint’s Power Purchase Agreement (PPA) with Etana Energy.
At the end of 2023, Growthpoint signed a Power Purchase Agreement (PPA) with licenced electricity trader Etana Energy to wheel electricity generated by independent power producers to its buildings in several locations across the country.
Wheeling involves the buying and selling of sustainably sourced electricity between private parties, using the existing transmission or distribution network. Since this can be done over long distances, it gives more users greater access to renewable energy, which is an especially scarce commodity for offices in central business districts. Buildings in these areas, almost without exception, have insufficient roof space for meaningful on-site renewable energy production.
Through the agreement with Etana Energy, Growthpoint has secured exclusive rights to purchase all
of the roughly 30GWh that will be generated annually by a hydroelectric power plant developed
and operated by Serengeti Energy. The hydroelectric project, which will effectively generate 24/7
baseload power, is located on the Ash River within the Lesotho Highlands Water Scheme (LHWS)
near Clarens in the Free State. Construction of the plant is well underway as it is readied to
commence operation officially on July 1 2025.
The majority of wind and some solar production from Etana’s signed generating portfolio will be added to the grid from 2026, and further sources could be added in future.
Paul Kollenberg, Growthpoint Properties Head of Asset Management: Offices, said: “This agreement
secures us a significant 195GWh of clean electricity annually for Growthpoint and our tenants at
specific buildings, and represents an important step forward in our sustainability journey. Over the past decade, we have prioritised the advancement of environmental, social and governance
(ESG) strategies, and we understand how important it is for our clients to do likewise.”
Paul Kollenberg, Growthpoint Properties Head of Asset Management: Offices
Environmental sustainability is at the core of Growthpoint’s business, which has been at the
forefront of integrating green buildings as an accepted practice in the commercial property sector.
It is committed to creating sustained value by integrating ESG into corporate strategy.
Growthpoint’s climate commitment target is being carbon neutral by 2050. By committing
significant resources to drive this within its operations and across its supply chain, Growthpoint is
setting a precedent for sustainable business practices, enabling other businesses to do the same,
and supporting long-term cost savings for its clients.
Being part of the e-CO 2 green energy benefit scheme makes it easier for businesses consuming
clean, wheeled power to achieve their ESG targets because at least 70% of their electricity will be
from renewable sources such as wind, hydro and solar. Depending on availability, a select few
businesses will also be able to elect to receive 100% renewable energy. Growthpoint has
started registering businesses eager to receive clean, green energy to meet their environmental
goals.
Werner van Antwerpen, Head Corporate Advisory at Growthpoint, said: “Opting into e-CO 2 gives
users access to certified RECs that can be used for annual emission reduction in ESG reporting to
contribute towards tenants’ environmental goals or can be traded in the open market.”
Consuming electricity in this way can significantly reduce a company’s Scope 2 emissions (as
outlined in the Greenhouse Gas Protocol), which include indirect carbon emissions from electricity
used by a company. Scope 1 involves direct emissions, while Scope 3 covers associated and indirect
emissions in the supply chain. All three are essential to address in the journey to net zero carbon
emissions.
Werner van Antwerpen, Head Corporate Advisory at Growthpoint Properties
Building occupants also benefit directly from e-CO 2 in terms of a reduction in the cost of
occupation. The tenants’ monthly renewable electricity allocation is used to calculate the benefit,
and the longer a tenant stays in a building, the greater the savings.
“Growthpoint is also passing on cost benefits it receives from signing the PPA to the tenant. The
cost benefit for a tenant opting for e-CO 2 is the difference between the full increase in the
electricity price applied by the local municipal authority or Eskom approved by NERSA annually
and a fixed escalation rate for the renewable energy part of their electricity cost over the
duration of the lease. This guarantees long-term savings. The longer your lease, the more the cost
benefit saving becomes each year,” said Kollenberg.
Users at qualifying properties will receive their power as they always have, through the existing
power grid. While this does not directly shield them from load shedding, Growthpoint is increasing
generating capacity in the larger South African electricity network, reducing the likelihood of load
shedding in the long term.
e-CO 2 is initially available for new leases or renewals only in specific jurisdictions and to select
buildings within the Growthpoint portfolio, but this will be expanded over time. The first buildings
part of e-CO 2 – all located in Sandton – are 138 West Street, The Annex, The Place, Fredman Towers, The Towers, Grayston Office Park, Sandown Mews, 12 Alice Lane, Advocates Chambers and
Pinmill Farm.
247@propertyflash.co.za
