Earlier this year Dexus announced plans to install commercial grade storage batteries linked to rooftop solar panels in all new industrial property facilities – “paving the way for a new industry standard”. This article sums up a presentation by Jacob Clark, development manager at Dexus, at the Buildings as Batteries masterclass.

Dexus committed to climate action as a priority in its sustainability strategy, and as part of its development pipeline plans to implement this initiative across more than 1 million square metres of industrial gross lettable area over the next few years. Equal to the size of 40 Melbourne Cricket Grounds. 

The battery program is projected to remove around 27,450 tonnes of carbon emissions from the atmosphere every year, the equivalent of removing around 6500 petrol-powered cars from Australia’s roads. 

For a typical 20,000 square metre facility this represents an average annual $92,000 saving and a reduction of 549 tonnes of carbon emissions a year. 

The first tranche of battery infrastructure, which is linked to solar panels, will be an integral part of industrial projects at Dexus’s Horizon 3023, a 127-hectare master planned industrial estate in Melbourne’s western growth corridor, with the first battery spec build to be completed in early 2025. 

The case for solar is clear. Energy costs have increased significantly over the past few years and by installing solar panels connected to batteries in our warehouse base builds we help customers reduce their energy costs and carbon footprints, while also future proofing our portfolio for the long term. 

There has been an enormous take up of solar globally and in Australia the rapid and ever increasing supply of solar been evident. 

To paint the picture. In 2004, only one gigawatt of solar was deployed worldwide. In 2010, one gigawatt was deployed in a single month and by 2023 it took just a single day. 

On current estimates, there will be 550 gigawatts of solar deployed this year. That is the equivalent of all the solar energy generated in 2004 being generated twice a day in 2024. 

That has created problems as Australia’s transmission grids are currently ill-equipped to receive this amount of energy. 

Solar energy is often generated at the wrong time – in the middle of the day when peak demand is at its lowest and when wholesale energy prices can drop to negative.

Additionally, the expected exponential growth in data centres, the advent of AI and accelerated transition to renewable energy sources will further increase the burden on the grid in its current state, requiring significant private and public investment into the upgrade of existing grid infrastructure. 

That’s where batteries come in, to solve this compounding problem 

A battery provides what is called frequency control ancillary services that help the energy market operator to keep the frequency of the grid stable and prevent abundant solar curtailment. 

Tenants of buildings with batteries can make use of wholesale market arbitrage by buying wholesale energy when it is cheaper and selling it through discharging it when the price is higher, generating an additional revenue stream.

Demand change management batteries can be used 

to reduce the site’s peak load thereby reducing incurred demand changes (sometimes referred to as “peak shaving”). 

Customers who use batteries and solar can reduce energy costs by 15-20 per cent and achieve a payback period of five to seven years. Savings would be expected to be significantly higher if a warehouse is designed for net zero energy consumption 

Finally, there is network tariff arbitrage. If a site has a network time of use tariff, the battery can be used to charge using cheaper off-peak energy and discharge during more expensive peak energy tariff periods. 

We find that customers who use batteries and solar can reduce energy costs by 15-20 per cent and achieve a payback period of five to seven years. Savings would be expected to be significantly higher if a warehouse is designed for net zero energy consumption. 

It is important to remember that for tenants, rent makes up only 5-7 per cent of their overall cost base and they are very focused on reducing their other expenses, of which energy and power is usually a significant component. 

We find customers are willing to pay a higher rent if they have access to a modern warehouse that will allow them to reduce other overheads, particularly in well located areas.

However, Dexus’ focus on sustainability in industrial extends a lot further than just solar. We are building sustainable warehouses that are flexible and designed to meet the ever-evolving needs of tenants over 30 or 40 years.

This means starting early with customers to align on shared sustainability goals and principles. Most large tenants have their own emissions targets, and a sustainable warehouse design will help them meet these internal initiatives.

For larger pre-lease commitments from global customers, we often work with the for six to months pre-construction, liaising with head offices in the US or Europe and working with local councils, supply partners and regulators before starting construction.

At Horizon 3023, we have been working with Nike to develop its 62,100 sq state-of-the-art logistics centre, which is believed will be the largest in the southern hemisphere.

The Nike Pacific distribution centre has been purpose-designed from the ground up to ensure the facility sets new standards in lead times and sustainability performance.

The facility features the largest Nike symbol in the world made with 1 mW of solar panels and an 8000 sq m Autostore, helping to deliver a carbon neutral facility.

But there is much more than solar at the Nike facility. We have installed and enabled the provision for truck and car electric vehicle charging stations, and a flexible stormwater collection and management system, which is used to supply the internal sprinkler system.

Insulation in our warehouses is one of the best ways buildings can harness energy to regulate temperature. In our standard warehouse design, we install translucent sheets in roofs and walls to increase natural light. This means there is less reliance on internal lights, on which we install motion sensors to reduce waste.

Batteries offer enormous opportunity for owners and customers take part in the net zero transition. The key question now is how the industry will advance to embrace this infrastructure in supporting necessary improvements to technology, regulation and grid integration.

Jacob Clark, development manager, Dexus