South Africa is experiencing stage four load-shedding, with the possibility of moving to stage six before the weekend. Load-shedding is not only inconvenient, it’s here to stay. Over and above the impact on our daily lives (think traffic lights and poor cellphone reception), there are some real and long-term impacts on South Africa’s economy that we should be more concerned about.
According to PwC, a million jobs have already been lost as a result of load shedding, with at least 275 000 potential jobs expected to have been lost in 2021 alone. In addition, economists say load-shedding costs the country’s economy R17 million per hour.
Nashua South Africa’s CEO Barry Venter says: “Ultimately, load-shedding affects every single one of us. Almost every business across every sector experiences some kind of loss during load-shedding. Companies still have to pay their staff, even if they can’t work, and companies in the manufacturing sector still have to meet deadlines and quotas, which all too often ramps up the price of all commodities, which in turn impacts the end customer.”
He cites the retail sector as another example. “Some shops have to close their doors during load-shedding because they simply don’t have the financial wherewithal to invest in an alternative energy source. All too often, retailers rent the space that they occupy and have to consider the implications of their investment in a generator or solar solution should they move to another premises. Decommissioning these installations is almost as costly as installing them.”
Venter says a compact power solution is a great alternative for the retail space. “It comprises an inverter and a couple of batteries and provides four hours of backup power so that the shop can run its critical infrastructure during load-shedding. It’s ideal to operate lighting, point of sale, internet and surveillance cameras when the power goes out, enabling the store to remain operational during load-shedding so that the retailer doesn’t lose out on business. It has the added benefit of being easy to remove should the retailer decide to relocate or close the business.”
He points out that larger retailers with food fridges, for instance, will require a generator or solar set-up to meet their load-shedding requirements. “Food retailers face even more losses as a result of power outages owing to spoiled goods that will need to be disposed of.”
Deploying alternative power also benefits the retailer’s customers as they’re still able to make purchases during load-shedding periods, and not be turned away to have to return later in the day.
As highlighted in the statistics quoted at the beginning of this article, the overall impact of load-shedding on productivity and profitability is significant. Venter elaborates: “In 2020, we did a case study at a manufacturing business that lost R70 000 per day during load-shedding. Just being able to operate during load-shedding, and recover in terms of productivity and quotas, enabled the customer to invest in a generator.”
Which brings us to an interesting question: how many businesses are able to quantify the true cost of load-shedding to their business? It’s easier for some sectors than others, for instance, manufacturers or petrol stations would find it easier because they have daily targets. A more business-oriented company might want to quantify it in terms of lost man hours. But what about a company that loses out on virtual transactions because its server is down during load-shedding? Or a print solution provider who is reliant on a certain number of clicks per month? All too often, equipment isn’t able to shut down safely when the power goes off, which leads to a spike in maintenance and services charges for equipment that is adversely impacted during load-shedding. Sometimes these costs aren’t taken into account.
Venter points out that there are two key factors to be considered when looking at alternative energy solutions. “First and foremost, what are the critical appliances that the business needs to operate during a power outage? Once the business starts listing these, and realises how many of its systems are vital to its operations, it can start quantifying the real cost of load-shedding to that business. Staying productive and profitable is key to the success of any operation and paying a labour force that can’t work for 2.5 or even five hours of the day is just not productive or profitable.”
Finally, Venter addresses the elephant in the room – Eskom’s inability to keep the lights on. “While we’ve mainly been talking about keeping businesses in operation during load-shedding, one also has to consider the long-term viability of relying on the national power grid. Deploying alternative energy is good for the environment and good for the country’s economy, as it’ll keep business’s doors open and people employed. Every single sector, from banking to agriculture to healthcare and education is reliant on a stable, reliable source of electricity. If our national energy provider is unable to supply that, as a country and citizens we need to consider steering away from reliance on the grid.”
The positive news is that acknowledging South Africa’s need for a viable alternative source of electricity, the government has eased some of the onerous requirements for businesses – and private individuals – wishing to deploy alternative energy. Last year it was announced that only solar solutions over one megawatt would require municipal evaluation and approval, opening up the market to smaller installers. “We’re seeing an influx of solar-ready kits into the market, making smaller solar systems more affordable and accessible, just requiring a COC from an electrician.”
This measure has been welcomed by installers and businesses alike.
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