Performance in detail - Natural resources
Moving to 100% renewable electricity
The International Energy Agency suggests that, to be on a pathway to 2oC global warming, by 2050 at least 65% of the world’s electricity must come from renewables, rising from 22.8% in 2014. We’re committed to realising the ambitions laid out in Paris and this includes leading the way in investing in renewable energy for all of our assets.
So, from 1st of April 2016, our group electricity contract went 100% renewable with the appointment of Smartest Energy as our new provider. We’re delighted to be supporting the UK’s low carbon economy by working with Smartest Energy and investing in large-scale renewable electricity generation. The contract helps secure a competitive price for our customers with great service levels, and it enables them to reduce their impacts too. For us, the new deal also means better contract terms such as lower management costs, better payment terms and a strong service level agreement. Smartest Energy’s supply is backed by REGOs (Renewable Energy Guarantees of Origin), the certification that guarantees electricity has been produced from renewable sources.
This makes us the first UK real estate company to join RE100, a collaborative initiative of influential businesses committed to 100% renewable electricity. The initiative is led by The Climate Group in partnership with CDP, and currently includes around 60 companies from around the world.
Generating our own energy
As spare capacity margins on the UK’s energy supply networks get tighter, we must reduce our grid dependency and generate more of our own energy on site. This increases the resilience of our portfolio in the face of energy security issues. It also demonstrates our commitment to decarbonisation as we implement more low or zero carbon technologies. By implementing and maximising our use of cutting edge renewable and generation technologies, we are working towards meeting our key sustainability objectives and supporting the UK’s transition to a low carbon economy.
During the year we generated a capacity of approximately 1.84GWh from the renewables installed across our portfolio. This is enough energy to support over 400 homes for a year. However, there is the potential to generate even more from those we have recently installed, including energy from low carbon technologies, which we will monitor closely over the next 12 months.
In London, these include our completed developments at 1 & 2 New Ludgate EC4, and The Zig Zag Building and Kings Gate buildings in Victoria, SW1, which all use combined heat and power (CHP) technology to generate low carbon, heating, cooling and power efficiently. This complements our existing on site generation plant such as our hydrogen fuel cell at 20 Fenchurch Street, EC3, which is fully operational.
We continue to add solar PV to our existing portfolio. New installations at 1 & 2 New Ludgate and The Zig Zag Building complement existing installations at 62 Buckingham Gate, SW1, and 20 Fenchurch Street.
In Retail, this year we achieved enormous progress on retrofitting photovoltaics to the portfolio. A desktop study was undertaken that identified potential sites for the installation of panels and this progressed to the final selection of six sites:
• White Rose, Leeds
• Trinity Leeds
• The Point, Bracknell
• The Galleria, Hatfield
• Cambridge Leisure Centre
• Xscape, Milton Keynes
Structural surveys and planning applications are underway. The installations will be significant in scale and production, with a total capacity of 1075 kWp over the entire project.
The 785 kWp array at White Rose in Leeds will produce an estimated 633,325 kWh per annum, which will account for approximately 20% of the entire landlord’s consumption on the site. This project will dwarf the highly successful array 300kWp installed at Gunwharf Quays in Portsmouth, which we believe is one of the largest PV array on a shopping centre in Europe. The arrays at Hatfield and Cambridge have the potential to produce 423,000 kWh pa and 100,000 kWh per annum and account for 5% and 18.5% of the landlord’s consumption at each site.
Our new company-wide target is to reduce carbon intensity (kgCO2/m2) by 40% by 2030 compared to a 2013/14 baseline, for property under our management for at least 2 years. This target will set us on the path to realise our long-term ambition of an 80% carbon intensity reduction by 2050. In order to achieve these carbon emission reductions we aim to reduce energy intensity (kWh/m2) by 40% by 2030 compared to a 2013/14 baseline, for property under our management for at least 2 years.
Our targets extend to include not only the energy we use as a landlord but also the energy used by our customers when sub-metered from landlord supplies. Our approach is distinctive in our industry, with our peers focused largely on landlord-controlled and common areas. This highlights our commitment to working with our customers to help them reduce their impacts and the overall impacts of our assets.
Since confirming our new science based carbon target we have submitted it to the Science Based Target Initiative for review. This will add further assurance to the robustness of our target and its calculation.
Overall, we have reduced our total energy by 3% versus the previous year on a like-for-like basis, and total energy consumption in our absolute portfolio is down 6% versus our 2013/14 baseline year. Although our energy use is influenced by weather and occupancy patterns, a large proportion of this reduction is attributable to active energy management across our portfolios.
In London, we have reduced like-for-like total energy demand by 4% versus the previous year. Establishing the EEnMS across the portfolio was a significant achievement but we must go further, continuously working to build in system-wide energy demand reductions along with quick-win solutions.
During the 2015/16 year we engaged NG Bailey to deliver proof of concept energy performance studies at our six highest energy-consuming properties in London. The studies focused on asset optimisation, capital replacement projects, facilities services and behavioural change. The team identified 52 opportunities for energy conservation. Potential annual savings of more than £300,000 were identified. To date, 43 measures have been implemented, realising savings of approximately £120,000 in the year helping to contribute to an overall energy reduction of almost 7,000,000 kWh compared to the previous year.
Throughout the year we also engaged with a number of occupiers to complete energy audits, going beyond landlord controlled areas to complete joint energy saving initiatives such as intelligent lighting controls and the installation of heating and cooling systems linked to occupancy sensors to reduce consumption.
We are becoming more sophisticated and effective in the way we monitor and control the energy performance of our buildings. For example, this year we partnered with Demand Logic to roll out intelligent plant monitoring systems that identify energy saving opportunities and maintain building performance. This innovative tool has enabled us to collaborate with our customers and partners to enhance energy performance.
In Retail, like-for-like energy consumption dropped by 1% during the year due to a combination of operational efficiencies at a local level and the physical upgrading and replacement of infrastructure.
We have worked hard to apply our EEnMS consistently across the retail portfolio. Activities this year included fact-finding, site investigation and analysis of existing energy arrangements. We are measuring the consumption of utilities in a consistent manner across the portfolio and have a robust management system in place in key assets.
During the year we continued to improve lighting, notably at Gunwharf Quays where more than 200 external lamps have been upgraded. At the White Rose shopping centre in Leeds and the Westwood Cross retail park in Thanet we are currently upgrading car park lighting to LED, at Bluewater the service yard lighting has been upgraded and the West 12 shopping Centre is replacing mall lighting with LED.
Top 5 improvements
In 2013 we identified the five assets across the company that consumed the most energy. Since then we have worked to improve their performance. This year we reduced energy consumption by 15% for these assets compared to the 2013/14 baseline, thus meeting our previous 2020 energy reduction target. We have taken the learnings from this previous focus on our top 5 buildings and now applied this across the portfolio. This has led us to set a new portfolio-wide energy reduction target to reduce energy intensity (kWh/m2) by 40% by 2030 compared to a 2013/14 baseline, for property under our management for at least 2 years.
Our updated target is that 100% of waste should be diverted from landfill with no less than 75% of waste (by weight) recycled.
Last year we reported an average annual recycling rate of 49% in London. This year we achieved an average recycling rate of 76.1%, surpassing our original target of 70%. The portfolio continues to divert 100% of waste from landfill. Our significant increase in recycling rate is due to our work with occupiers and service partners to increase on-site segregation of waste, together with the installation of bespoke equipment. Our choice of working with one strategic waste service provider, Bywaters, has brought clarity, consistency and economies of scale.
This year several of our London sites have received Clean City Awards; a scheme run by City of London to reward businesses for responsible waste management practices:
20 Fenchurch Street – Platinum level with Special Commendation
One New Change – Platinum level
New Street Square – Platinum level
One example of what can be achieved through a focused approach to waste management is 20 Fenchurch Street, EC3, where the asset achieved an average recycling rate of 87% and diverts 100% of waste from landfill. The high recycling rate is the result of ongoing occupier and cleaning operator training, clear signage and colour coding of the waste area in the loading bay and the installation of a bespoke weight machine which allows occupiers to measure their waste and track performance.
Retail is a more challenging area for us as we have a much more diverse portfolio of assets and a number of service providers. However, during the year we achieved an average annual recycling rate of 70.7%, up from 67.3%, and a 98.2% diversion from landfill, up from 97.8%. This year a number of retail sites retendered their waste contracts and incorporated better recycling facilities. We’ve also improved the accuracy of data, moving from estimated data to weighed figures at more sites.
So against our increased commitment, our overall performance shows that Land Securities is diverting 98.6% from landfill and recycling 72.0% of its operational waste.