Dexus signs renewable energy supply agreement

Dexus has struck an agreement with Red Energy to supply their NSW building portfolio with renewable energy.

It claims it is Australia’s first supply-linked renewable Energy Supply Agreements (“ESA”).

Dexus, Australia’s largest office landlord, and Red Energy, which is 100% owned by Snowy Hydro, have signed a Memorandum of Understanding for a seven-year renewable contract, to commence from January 2020. 

Dexus will purchase renewable energy off-site to power the base building services of more than 40 buildings. 

This will be achieved through the procurement of renewable energy generation and presents a new lever for Dexus and the property industry to achieve net zero emissions. 

Dexus’ strategy aims to eliminate emissions from its portfolio and create value for Dexus’s customers and investors.

“This is a first for an Australian real estate investment trust and supports our ambition to achieve net zero emissions by 2030,” said David Yates, Executive General Manager for Sustainability at Dexus. 

“We have worked collaboratively with Red Energy to establish a new energy supply model which will deliver renewable energy sourced off-site. Importantly it provides long-term price certainty to insulate our customers from electricity market volatility, while driving down energy costs and supporting our collective carbon reduction goals.

“The ESA satisfies the demand from customers and investors for more reliable, environmentally responsible energy. 

“Over seven years, we expect to source more than 300 gigawatt hours (GWh) of renewable energy via this ESA, which is equivalent to the energy consumed by 38,000 households for a year.”

Paul Wall, Head of Group Sustainability and Energy at Dexus, said: “This agreement allows us to hedge a portion of our power price, providing a buffer against energy market uncertainty. The deal has been struck at below current market rates and leverages the large-scale generation certificates subsidies, resulting in a fixed price for 50% of our energy load over the next seven years. 

“This means we can pass the savings directly to our customers, while operating our buildings using a responsible, emission-free source of energy. 

“This new deal is expected to reduce the retail energy rate which we pass onto our customers through outgoings by more than 10% compared to existing contracted rates.”