Brookfield Place Moving to Zero-Carbon Electricity by Year’s End
By the close of 2024, all electricity at Brookfield Place will be supplied by zero-emissions hydropower, part of a larger push by Brookfield Properties to convert its entire New York City portfolio to clean, renewable power as of December 31, and to achieve net zero emissions by 2050.
“We originally committed to a 50 percent reduction by 2030, so we are way ahead of our milestones,” reflects Mike Daschle, left, senior vice president for sustainability at Brookfield Properties, who spearheads the firm’s carbon reduction initiatives. “And getting to net zero by mid-century is very achievable.”
This project began take shape in 2015 “with the Paris Climate Accords and the global efforts that followed,” he says. “It really took off in 2020 and 2021, when there was a flood of investor interest in sustainability and net zero-carbon. That’s when our parent company, Brookfield Asset Management, made a public commitment to what is called the Net Zero Asset Managers Initiative.” This is an international coalition of more than 300 large property owners, managing more than $50 trillion in assets, who have committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner. “In the years since,” he says, “every Brookfield subsidiary has been working to align with that commitment.”
For Brookfield Place, this has translated into contracts with another Brookfield subsidiary, Brookfield Renewables, which operates hundreds of hydroelectric, wind, and solar generating stations across five continents. The company has more than 70 hydropower facilities, along with three wind farms, in New York State alone. Mr. Daschle adds that the contract with Brookfield Properties and Brookfield Renewables is not uniquely available to related arms of the same corporate family: “The same terms are available to anybody else,” he notes, “and we had to go through an extensive conflict review to make sure that we weren’t getting a preferential deal.”
“We’re buying both the electricity and the certificates that comes with that power,” he says. “Typically, producers sell their electricity into the wholesale market, where it gets mixed with power from natural gas and nuclear and other renewables. But when we enter a contract to buy both, we’re telling Brookfield Renewables not to sell a portion of their power to the grid, but instead to reserve that portion of their capacity and direct it to us. They schedule that amount of power from hydro plants in upstate New York, and route it into New York City on our behalf, which can be tracked through the grid operator’s scheduling mechanisms. And the certificates allow us to make these environmental claims. They provide the documentation trail and transparency that proves every megawatt hour we’re consuming is matched with a megawatt hour from those plants.”
“For other companies, the main purpose behind certificates is tracking, to show that their energy consumption from non-renewable sources has been matched with clean production, which zeroes out the emissions associated with their consumption,” he explains. “But we have gone a step further by purchasing both the certificates and the clean electricity behind them.”
“We’ve already secured contracts for three buildings that are live now,” Mr. Daschle continues, “and we’re going to be adding another 16 before the end of this year, all here in New York — including Brookfield Place. Nobody else is doing this on the scale that we are, especially among real estate owners. Other developers are doing more of the certificate-only options, and focusing on property-specific investments.”
“Given the size of the portfolio we are buying for, Brookfield is acting as an incentivizer for energy providers to generate more clean power,” he adds.
Switching to all-renewable electricity incurs extra costs of between ten and 15 percent, Mr. Daschle says, “but it’s really important to look at the larger business picture and total context. While this represents an increase in electricity prices, overall operating expenses for the property increase by less than one percent. And the business upside is that this gets us where our key customers want us to be. Many large tenants want to occupy buildings that are renewably powered. Very large corporate global firms are now demanding what are called ‘green lease addenda,’ writing in their requirements that their building must be powered by clean energy.”
This puts the Brookfield real estate portfolio on a select list of properties, able to present options not offered by many other landlords. “We believe the economic benefit outweighs the small, incremental cost increase,” Mr. Daschle says.
He acknowledges that much work remains to be done: “We are reducing the use of steam, for heat and hot water, in our all of properties, but that remains a source of carbon emissions.”
Nor is renewable energy the only focus of Brookfield’s sustainability efforts. “We have major initiatives involving composting, and the reduction of waste sources, such as single-use plastics,” Mr. Daschle says. We are working hard to reduce water consumption, by upgrading fixtures. And we even have 12 bee hives across our New York portfolio, housing 600,000 bees. Because they forage within a radius of three miles, they cover most of Manhattan.”
“Programs like these are scalable and impactful,” he says. “They not only make good business sense. They also make a significant difference.”
Brookfield spokesperson Laura Montross adds that in addition to its New York portfolio, Brookfield plans to transition its Washington, D.C. office properties to zero-emissions electricity by the end of 2024, and make the same switch for all of its United States office properties by 2026.