AMP Capital's Wholesale Office Fund (AWOF) has achieved net zero carbon status for its internally managed assets with a new renewable Power Purchase Agreement (PPA).
The PPA with Diamond Energy is linked to solar farms in central NSW. AMP Capital explains it will procure and retire renewable energy certificates that match 100% of AWOF's base building electricity consumption. This means that there are zero carbon emissions associated with the electricity consumed by the base building services, including the air conditioning and lifts.
AMP Capital says with this agreement, the AWOF) has achieved Zero Net Carbon for its internally managed assets from 1 January 2021, ahead of its 2030 target.
The renewable energy procurement strategy is one of a number of initiatives towards achieving Zero Net Carbon across AMP Capital's entire $28 billion of managed real estate portfolio by 2030.
"The signing of this renewable electricity agreement marks a significant milestone for the portfolio and for our investors," says Kit Georgeos, fund manager.
"It allows us to deliver on our commitment to achieve long-term sustainable outcomes across the real estate assets we manage and support a renewable energy future. Importantly, it's being delivered in a way that is cost-neutral relative to the price the fund has paid for electricity over recent years."
AMP Capital's zero net carbon target for its entire managed real estate portfolio covers Scope 1 and 2 emissions, and renewable energy procurement is the most significant component of this strategy.
Scope 1 emissions are greenhouse gas emissions that come from the activities of an organisation or activities under their control. Scope 2 emissions are indirect emissions from electricity purchased and used by an organisation.
Renewable PPAs are an established cost-effective path to buying large volumes of renewable electricity, notes Chris Nunn, head of sustainability, for AMP Capital Real Estate.
"The signing of this renewable electricity contract helps support the viability of new solar farms and provides a market signal that there is demand for more renewable electricity generation facilities to be built," Nunn says. "The contract also supports clean energy jobs and the orderly transition away from fossil fuel dependence in Australia.
"We are proud to be able to show that a major commercial real estate portfolio can achieve zero net carbon in a cost neutral way at a price that is less than what we've paid for traditional electricity and that supporting renewables and combatting climate change is not only the right thing to do for the environment but also cost effective for our investors."
Diamond Energy is "proud to partner with AMP Capital, says Tony Sennitt, managing director.
"Agreements like these go a long way to reducing carbon emissions and supporting new renewable energy projects in Australia," Sennitt says.