Japan Developers Go Green In Office Buildings
Big Japanese developers have begun ramping up plans to switch to renewable energy at office buildings, jumping on board the country’s emissions-cutting drive while also looking to attract eco-conscious tenants.
Mitsubishi Estate plans to have about 30 buildings in the Marunouchi central business district, including the Shin-Marunouchi Building and Marunouchi Oazo, run completely on renewable power, from sources such as biomass facilities operated by electricity supplier Eneos. The shift will start in April with 18 of these buildings, with the rest making the jump as early as fiscal 2022.
Using cleaner forms of energy at these electricity-hungry properties would make a big difference in Japan’s efforts to slash greenhouse gas emissions. These properties consumed roughly 400 gigawatt-hours of energy in fiscal 2019 — equivalent to more than 100,000 households — generating about 200,000 tons of carbon dioxide emissions.
Mitsubishi Estate had previously planned to switch over a few Marunouchi-area properties to renewable energy per year. The accelerated timetable comes amid the government’s push to achieve net-zero carbon emissions nationwide by 2050.
Tokyu Land plans to shift to renewables at 15 properties in April, including Shibuya Solasta, where its headquarters is located. It looks to make the switch for all of its facilities across the country, including ski resorts and hotels, by 2025, much sooner than its initial target of 2050. The developer will tap sources including the more than 50 renewable-energy projects it is involved in, some of which are still under development.
Buying power from green sources, such as hydropower and wind, tends to be pricier than fossil fuels, which will mean higher electricity costs at properties that use them. Energy with non-fossil-fuel certificates issued by the government is reportedly about 10% more expensive.
Neither Mitsubishi Estate nor Tokyu Land plans to pass the added costs on to tenants. They intend to use renewables as a selling point to attract tenants, pointing to the government’s net-zero emissions target.
Other developers are pivoting away from carbon as well. Tekko Building this month became the first office building in Marunouchi to complete the switch. Mitsui Fudosan is teaming with Tepco Energy Partner, an energy retailer under the umbrella of Tokyo Electric Power Co. Holdings, to offer green energy to interested tenants starting in April.
Office buildings, which account for about 6% of power consumption by businesses, provide an opportunity to promote renewable energy usage among their tenants. Mitsubishi Estate says that more than 1,000 companies, many in finance and the service sector, operate in its properties in the Marunouchi area alone.
There are roughly 10,600 office buildings with an area of 3,000 sq. meters or more across the country, according to the Japan Real Estate Institute. Switching such properties to renewable energy would have a significant impact.
According to preliminary estimates, 18% of the power generated by Japan in fiscal 2019 came from renewable sources. The Ministry of Economy, Trade and Industry aims to boost this to between 50% and 60% in 2050.