JSE-listed real estate investment trust (Reit) Growthpoint Properties said it is giving a massive boost to Africa’s first open blockchain-enabled REC exchange, Fuel Switch, while unlocking certified clean energy trading for tenants when its e-co2 green energy initiative, goes live in October.

The Reit pointed out that wheeled green energy would be made available for daily business in South Africa from October.

“What we have seen in the industry currently is that sustainability reporting is becoming a very onerous task, [especially on the] listed companies . . . almost to the extent that it is becoming equal to financial reporting,” said Growthpoint corporate advisory head Werner van Antwerpen during a media presentation.

“That's why we actually developed this e-co2 initiative . . . to, first of all, . . . wheel green power to those tenants, but also then to certify those . . . so that they can use that to reduce their emissions in their reporting structures,” he explained.

Growthpoint’s e-co2 will deliver its first green electrons to ten Sandton office buildings in October, with hydropower wheeled over the national grid from the Boston hydroelectric plant, newly developed as part of the Lesotho Highlands Water Scheme in partnership with Serengeti Energy.

The company said in a media release that the e-co2 roll-out puts Growthpoint well ahead in bringing certified renewable energy into daily business.

The company explained that the use of e-co2 wheeled green electricity is cost competitive for Growthpoint tenants and has a zero-carbon footprint, allowing them to save money and advance their sustainability goals.

For e-co2, the company signed a 195 GWh power purchase agreement with Etana Energy in 2023, securing a mix of hydro, wind and solar power.

The company said this energy underpins its pioneering e-co2 solution, which delivers wheeled renewable electricity directly to commercial buildings and their tenants.

“But the real breakthrough lies in how this energy is certified, tracked and monetised for Growthpoint’s tenants,” the company said in the release.

To deliver this capability as part of a growing suite of high-impact business-enabling tenant benefits, Growthpoint partnered with Fuel Switch.

During the presentation, Fuel Switch CEO Jan-Paul Spangenberg explained that tenants can face issues such as having limited choice regarding electricity, as well as tedious onboarding processes and high fees.

“It's really a difficult market to navigate and know where to go, so we plan to solve that. We are busy solving that,” he said.

GREEN ENERGY CERTIFICATION

Fuel Switch’s platform certifies the electricity as green using Internet of Things (IoT), blockchain and AI, providing independent third-party verification in an innovative manner.

Once certified, the green energy benefit is recorded on a digital certificate.

Each REC confirms that 1 MWh of renewable energy has been generated and supplied to the national grid.

The RECs are stored on the blockchain as a digital asset. Each is time-stamped and linked to a renewable-energy source.

“Think of it like this: when a solar panel generates electricity, it creates two things – actual power, and a certificate that says, ‘this power came from a clean, renewable source’,” Growthpoint explained.

The Reit noted that corporates had come under increasing pressure to meet net-zero and environmental, social and governance (ESG) commitments, adding that sustainability reporting is increasingly carrying the same weight and scrutiny as financial reporting.

RECs can be redeemed for certified reduction of Scope 2 carbon emissions. Fuel Switch integrates directly with South Africa’s national REC registry, zaRECs, as well as the global I-REC standard governed by the I-TRACK Foundation.

Growthpoint expressed that its blockchain platform provided an “immutable record” for each REC from issuance to retirement, which ensured auditability aligned with global ESG standards.

“What’s more, with South Africa’s constrained economic growth, businesses are under immense pressure to grow and find new revenue streams. RECs can be monetised by selling them on the voluntary REC market where rights to green electricity are sought after,” the Reit explained.

Large companies, such as Google, Amazon, Microsoft, Apple and Meta, are driving a surging demand for RECs as they seek to reach 100% renewable electricity for their operations, said Growthpoint.

The company explained that, until now, Africa’s participation in the voluntary RECs market had been limited, where high costs, slow manual processes and opaque trading made it accessible to only the largest-scale projects.

However, when e-co2 goes live, Fuel Switch will enable Growthpoint tenants of all sizes to access this new market.

“What makes this collaboration unique is the functionality pioneered and developed by the partnership, which integrates Fuel Switch directly into Growthpoint’s property portfolio, green energy data and IT systems,” said Growthpoint.

The company noted that the innovation lay in blockchain smart contracts, the use IoT devices and business logic to bring all stakeholders together with a digital handshake.

As e-co2 rolls out from October, participating tenants in select Growthpoint buildings will have their smart electricity meter consumption data automatically sent for verification, and the corresponding RECs will be issued directly into secure digital wallets.

These wallets are free for Growthpoint tenants and accessed through the Fuel Switch Exchange platform, allowing tenants to access, manage and deploy their RECs based on business needs.

They can redeem them to lower emissions or sell them for additional revenue.

Growthpoint said this makes it the first to offer a commercial-scale, wheeled renewable electricity solution where renewable energy use is certified at the building level and the benefits are made available to tenants in a verified, auditable format.

Fuel Switch explained that an elegant system of automated actions executes predetermined smart contract rules embedded in a secure blockchain database.

This ensures green energy that is independently certified with the highest level of trust and transparency and direct access to an evolving trading market that is usually inaccessible to all but the biggest players owing to high participation costs.

With Fuel Switch, transactions that previously took weeks can now settle virtually instantly.

Growthpoint expressed that its smart contract technology was a much more cost-effective way to transact, leading to marginal fees.

The company explained that its infrastructure was capable of handling over 10 000 transactions a second, and it was already trusted by major corporates in South Africa.

“It is a game-changer for how businesses can participate in clean energy markets and carbon reduction reporting.

“By combining our e-co2 wheeled green electricity property portfolio with Fuel Switch’s blockchain technology, we’re opening the green energy market to businesses of all sizes, creating measurable environmental impact and generating real financial value,” said Van Antwerpen in the release.

“Our mission is to make participation in the green economy easier, quicker, more cost-effective and more transparent. Our partnership with Growthpoint accelerates this goal. With blockchain as the backbone, every REC is verifiable, tradeable and audit-ready, fully aligned with evolving International Financial Reporting Standards sustainability reporting standards,” added Fuel Switch COO Gideon Maasz.

While both e-co2 and the Fuel Switch integration support Growthpoint’s long-term environmental goal to achieve net-zero carbon emissions across its portfolio by 2050, Growthpoint argued that the implications were “much, much bigger”.

“These solutions are built around Growthpoint’s tenants – thousands of businesses, big and small, in all sectors of South Africa’s economy.

“More than that, understanding that a vibrant and healthy green energy market is crucial for energy security and job creation, the development Fuel Switch has undertaken with Growthpoint will expand the green economy for others too,” said Growthpoint.

As an open platform, Fuel Switch can be used by any business or individual, globally.