The urgency of addressing climate change has prompted many sectors to review their strategies and operating models. Collaborations between the energy and real estate sectors are playing a key role in promoting urban regeneration.
Original article in Italian: Pambianco Magazine
The challenge of climate change calls for a review of strategies in various sectors, with particular focus on collaboration between energy and real estate. These synergies are key to fostering sustainable urban regeneration by integrating innovative energy solutions and real estate development models that reduce environmental impact and promote the resilience of our cities. One player in this field is Edison Next, which is positioning itself as a strategic partner for urban regeneration. Valentina Infante, Director of Regeneration, explains to Pambianco Real Estate that “we started to actively play a role in this sector to engage in dialogues with different types of actors.”
In Edison, urban regeneration began to gain traction about two and a half years ago and the goal is to build a new line of business or, rather, a new concept of energy use within Real Estate. Valentina Infante emphasises that, traditionally, the industry has been accustomed to structuring projects through engineering companies that contract the plants to specialised suppliers, an approach that Edison intends to avoid. “That’s not who we are,” she explains. “We want to be a partner to design together and find ideal solutions.” This is not an easy step, since real estate is geared towards developing master plans, obtaining permits and, only then, engaging in dialogue with suppliers. However, Edison has already achieved successes and has begun receiving applications for projects at advanced stages. The company’s goal is to implement the first concrete project where Edison, in addition to investing in and managing the plants, will also provide the energy carrier and other smart services such as electric mobility, lighting, video surveillance and more. All this, by taking advantage of in-house developed digital technologies, such as control rooms and centres that allow remote monitoring and management of plant settings.
One-stop shop for Build-to-Rent
“By investing in and developing these plants, we are establishing long-term relationships with our partners, especially in the Real Estate sector, where interest in a one-stop shop solution is growing, especially in Build-to-Rent,” Valentina Infante explains. The company aims to share the project risk, while avoiding taking part in the real estate risk, except in some specific cases where it is deemed appropriate to grant a small equity share. She goes on to highlight that Edison already has some advanced initiatives underway, thanks to partners that were involved with the company from the early planning stages. However, the lead time for urban regeneration projects is not short and the permitting process is often a critical aspect. “We develop a model in which we participate with preliminary agreements to assess the feasibility of projects and, if conditions are right, we proceed with an exclusive development agreement,” she explains.
Iconic projects
“Currently, we have not yet completed a major urban regeneration or redevelopment, but we are aiming to close deals for iconic projects, including of individual properties, that can contribute to the change of an entire area,” Valentina Infante explains These projects, she notes, change the intended and actual use of the spaces, becoming meeting points and significantly improving the urban context. Innovation, she stresses, is crucial for energy development. Edison is investing in disruptive technologies such as hydrogen, while established solutions such as photovoltaics and wind power continue to evolve. “Modular energy management is key in long-term projects to ensure efficiency and sustainability,” Valentina Infante adds, highlighting the importance of working synergistically with developers to find optimal solutions.
Edison is also exploring the potential of biomethane and hydrogen, both for transportation and industry, with projects already operational or in the permitting process. Valentina Infante also notes how a change is emerging in Real Estate, aimed towards a community concept, where energy also becomes a shared resource. Edison designs solutions that exploit the concept of energy exchange between different parties, for example through hydronic rings that enable district heating and cooling, optimising energy use. “Our innovative approach aims to create value in a long-term logic, addressing the challenges related to sustainability and energy efficiency,” she concludes, reiterating the importance of integrated solutions and strategic dialogue with key stakeholders to initiate iconic projects and structured collaborations in the sector.
MET Energia Italia, part of the Swiss-based MET Group that closed 2023 with consolidated sales of €24.5 billion, also operates interfacing with end customers of all sizes and scales, from large industrials to SMEs and residential customers. “Over the years, we have made this journey starting with the first operators and then extending to the smaller ones, focusing on two fundamental areas: natural gas and electricity,” explains CEO Giuseppe Rebuzzini.
In recent years, the renewables sector, particularly photovoltaics, has made great strides, “so much so that today the production of electricity from renewable sources – photovoltaics and wind power – is double that of hydroelectricity. Together, these elements now account for at least 30% – if not 40% – of the total electricity consumed in our country. This is a significant figure, especially when we consider, Giuseppe Rebuzzini notes, the monumental renewables development target to be reached by 2030, which calls for twice as much new installed capacity as today, overall reaching three times the current capacity. We are talking about 60 gigawatts of installed capacity from photovoltaics and wind power, compared with 35 gigawatts today. These are important and challenging goals for the whole system.”
A large heritage of “roofs”
How will this be achieved? “With large plants, which will be the basis for development, despite the challenges associated with permitting, and with smaller, distributed plants, typically installed on rooftops. Involving something that is not exploited today, simply consisting of the roofs of houses. Italy has great potential in this regard, considering that only 10% of available rooftops are currently being used for photovoltaics. According to some estimates, if 100% of rooftops were used, about 100 gigawatts of installed power could be obtained. Reasonably, a plausible number might be half, but that would already be a lot.”
A cultural theme
However, smaller projects have a much simpler permitting process than large solar farms, but a problem of costs and culture remains. The rhetorical question is - how to overcome these obstacles? “As far as small plants are concerned, the government is putting in place a number of innovative initiatives at the European level and also trying to communicate them better. Bureaucracy is the real obstacle. We are talking about renewable energy communities, which are an interesting and innovative example that stems from a European directive that various governments have adopted, introducing the concept of virtual self-consumption.”
Energy communities
But what are the obstacles? The Italian government has introduced the concept of virtual self-consumption for energy communities, but there is still a significant gap between those on paper and the ones in existence. “The difference lies in the fact that creating an energy community on paper is relatively simple, but to make it effective, it is necessary to have adequate energy production, which requires a rather considerable investment.” The incentives are there. The actual obstacle is the cultural aspect. “The return on investment is not great, but that doesn’t have to be the driving logic,” Giuseppe Rebuzzini notes.
In short, there is a lot of talk about “sharing, socialising,” but there is a lack of “pragmatism and implementation of the investment. Our focus is precisely on implementation. Not being able to be part of the energy community, a questionable aspect of this structure, we can build the plant and make it available to the energy community.” With respect to new construction, MET Italia is interested in “collaborating with real estate companies to get this kind of infrastructure underway: we can have different types of agreements in place, from supply to other forms that we evaluate on a case by case basis.”