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How Renewable Vitality Can Revolutionize India’s Actual Property Sector

How Renewable Vitality Can Revolutionize India’s Actual Property Sector

Exploring renewable procurement methods for builders, constructing house owners, and tenants.

Local weather air pollution linked to the constructed atmosphere comes largely from using electrical energy. Lodha Group, one of many largest actual property builders in India, is addressing this via revolutionary methods to transition their buildings to one hundred pc renewable power.

Actual property customers and their emissions

The Greenhouse Gasoline Protocol has established standardized frameworks to measure greenhouse gasoline (GHG) emissions, categorizing them into 3 scopes:

  • Scope 1 – Direct GHG emissions happen from sources which are owned or managed by the corporate (primarily fuels, refrigerants, and so forth.).
  • Scope 2 – Oblique GHG emissions account for emissions from the era of bought electrical energy consumed by the corporate. They’re referred to as oblique as these emissions bodily happen on the facility the place electrical energy is generated.
  • Scope 3 –These emissions are a consequence of the actions of the corporate, however happen from sources not owned or managed by the corporate. These emissions happen within the upstream and downstream worth chain of an organization, and often symbolize nearly all of an actual property builders’ total GHG emissions. Inside Scope 3, classes 11 and 13 account for electrical energy utilization by an end-user (proprietor or tenant) of any actual property.

To attain net-zero emissions, we should generate the electrical energy for these classes with renewable power (RE). This can even assist the bold commitments that Indian Prime Minister Narendra Modi made throughout COP 26 together with:

  • India reaching net-zero emissions by 2070
  • Transitioning 50 p.c of India’s cumulative electrical energy put in capability to non-fossil fuel-based power assets
  • Lowering the emissions depth of financial system by 45 p.c from 2005 ranges by the tip of this decade

Integrating renewable power in a growth or a course of relies on many elements; the suitable selection of deployment is crucial for sustainability and constant financial advantages for the organizations and prospects. Whereas there are a bunch of choices out there, there are particular key elements that should be thought of whereas deploying renewables. These embody:

  1. Aim: What’s the net-zero purpose for which deployment is required?
  2. Possession: Who will personal the plant: the person or the developer?
  3. Location: The place will the plant be positioned: on-site or off-site?
  4. Laws: will evolving laws influence the tenure of the deployment?
  5. Vitality demand and its consistency: Is there a very good understanding of current and future demand load?
  6. Pricing and phrases and situations: What are the budgetary implications and constraints with respect to deployment?
Remodeling electrical energy use for various customers in the true property sector
Actual property builders

Lodha is transitioning utterly to renewable power to make its Scope 2 emissions zero. Its RE deployment strategy will make the most of on-site and off-site RE deployment pathways for building hundreds, its owned workplaces, and downstream leased property via internet metering, the Inexperienced Tariff mechanism, and open entry, which permits giant electrical energy shoppers (with hundreds better than 1 megawatt) to purchase comparatively cheaper energy from energy producers.

Since most of Lodha group’s hundreds don’t at present qualify for the open entry restrict of 1 MW, the corporate has initiated RE procurement via the inexperienced tariff mechanism. The current “Inexperienced Vitality Open Entry” guidelines notified by the Ministry of Energy present hope on this regard, since they create the brink of contracted demand right down to 100 kW from the sooner 1 MW. It will enable a a lot bigger pool of electrical energy shoppers to acquire renewables via open entry.

Lodha additionally goals to undertake renewables via round the clock (RTC) buy choices that may assist make sure that it meets its demand with RE era all through the day. The RTC mechanism does so by tapping into diversified renewable power sources to beat the variability of a single supply.

Lodha can also be exploring digital energy buy agreements (VPPAs) as a mechanism to contract renewable power with impartial energy producers (IPPs). Though the bodily supply of energy doesn’t happen below a VPPA, the buyer receives renewable power attributes (or inexperienced power credit) by procuring energy from the IPP by way of the facility alternate on the market worth. The potential profit for the buyer right here is that if the market price is larger than the pre-agreed VPPA contract worth, the IPP pays the distinction to the buyer.

Proprietor’s co-operative societies

The terraces in high-rise buildings are already occupied by varied providers, and the remaining rooftop is used up by photo voltaic methods to cater to the widespread space a great deal of the respective buildings. Residential excessive rises as much as a sure peak (20–25 tales), usually have sufficient roof area to utterly energy widespread areas with renewable power, aided by the banking facility below internet metering. The societies may even reap the benefits of inexperienced tariffs to utterly offset the GHG footprint of their widespread space. There was a time when RE builders hesitated to interact with housing societies, contemplating them to have low creditworthiness. Nevertheless, the ever-increasing proliferation of rooftop photo voltaic methods makes this problem much less of a priority.

Residential house owners or tenants

Along with the dearth of rooftop area in lots of high-rise buildings, there are restricted avenues to interact in off-site contracts or buy choices for a typical condo proprietor. Additional, direct buy of renewable power by way of inexperienced tariffs requires prospects to pay a premium per unit of electrical energy consumption, which can act as a deterrent.

Lodha continues to seek for possible options that may resolve this problem at scale and at costs for its prospects the place they don’t have to pay a premium. One of many choices is group photo voltaic, which is facilitated via digital internet metering. Whereas laws in sure jurisdictions enable this mannequin, it’s nonetheless not permitted in others. By partaking with distribution firms (discoms) and regulators, Lodha hopes to create RE deployment alternatives for communities.

Industrial tenants

Tenants in industrial buildings have short- to medium-term tenures, and face related challenges as residential tenants. Nevertheless, they will afford to pay a slight premium by switching to a inexperienced tariff to align their power wants with their very own decarbonization commitments or objectives. Typically their hundreds are additionally larger than 1 MW, by which case they will go for the open entry route. For sure tenants, like industrial or warehousing, there may be sufficient area on the roof to allow the client to modify utterly to renewable power via internet metering.

As a accountable actual property landlord, Lodha creates consciousness about greening alternatives and likewise ask tenants to make the change to renewables. The corporate additionally explains to its tenants that the per unit power financial savings being handed on to them are larger than the premium any greening choice like a inexperienced tariff might require.

Actual property builders also can discover inexperienced leases by which the electrical energy prices are included as a part of the hire. As a subsequent step, the corporate can develop into an built-in power providers supplier (IESP) — a third-party developer that owns and operates the power asset behind the meter, and acts as a utility to tenants, inside the pointers of relevant laws.

Alternatively, company patrons can faucet into the open market to satisfy their inexperienced electrical energy wants. The inexperienced term-ahead market (GTAM) is a market-based mechanism that enables RE builders and company patrons to commerce inexperienced energy within the open market on an intraday, day-ahead, each day, and weekly foundation, with out signing any long-term energy buy settlement.

Patrons may decide to buy renewable power credit (RECs) to meet their renewable buy obligations and offset emissions. RECs are traded on the facility alternate and symbolize the inexperienced attribute of electrical energy generated from RE sources.

The online-zero purpose requires complementary actions

Actual property builders and different customers can discover the assorted pathways and choices mentioned above to offset the emissions from their electrical energy demand.
How Renewable Vitality Can Revolutionize India’s Actual Property Sector

This contains adopting renewable power together with complementary revolutionary energy-efficient options out there in constructing design, together with passive design and gear effectivity. This gamut of options can go a great distance in accelerating the journey towards a net-zero future.

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