China’s “Carbon Peak”, “Carbon Neutralisation” process is accelerating in the fourteenth five-year plan period, compounded with recently tightened regulations on the high-energy-consuming industries. The situation makes renewable energy more important in the long run. Every industry is actively implementing the targets of energy savings and emissions reduction, exploring sustainable use of green and clean energy. As one of the most important and widely distributed livelihood infrastructures, Grade A warehouse facilities are becoming typical application case for photovoltaic power generation.

As of Q3 2021, we observed serval logistics real estate developers applying low-carbon and renewable energy in their projects. For instance, GLP has built distributed photovoltaic power generation through nationwide logistics facilities using the roof space, which helps the firm reduce energy consumption and CO2 emissions significantly[1]. In addition, in September 2021, Prologis announced a partnership with LONGi Green Energy Technology. Prologis aims to use LONGi’s advanced technology in solar energy to help speed up distributed photovoltaic power generation applications in Grade A warehouse projects[2].

Looking ahead, energy consumption in Grade A warehouse is expected to grow with an increasing installation of automation and temperature control equipment. On the other hand, warehouse occupiers, such as fresh food and pharmaceutical enterprises, demand an extremely stable power supply to ensure the quality and safety of their goods. At this point, distributed photovoltaic power generation is not only designed to reduce real estate energy consumption, but also to provide an independent internal power supply system. As a backup supplement to an external centralised power supply, system distributed photovoltaic power generation offers a stable renewable energy power solution to logistics developers and occupiers.

LEED-certified buildings in China to build competitive advantage

With more and more enterprises committing to Carbon Neutralisation, Carbon Peak and environment & social governance (ESG), the pursuit of low-carbon and renewable energy is continuous. Apart from distributed photovoltaic power generation in Grade A warehouses, our study shows that the application of green and energy-saving building materials should also play a role in reducing carbon emissions in the construction and operations of warehouses. Therefore, in the future, logistics facilities with LEED or other ESG related certificates will have competitive advantages, with more recognition by local governments, occupiers and investors, which will eventually lead to higher occupancy rates and capital gains.

[1] https://www.glp.com/global/infrastructure
[2] https://www.prologis.cn/en/logistics-industry-feature/longi-signs-mou-prologis-china

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