South African retailers are being hit hard by load shedding. Costs have gone up and trading has come down.
The Foschini Group (TFG), in a trading update in March, estimated that its retail turnover has decreased by about R1,5-billion and spent R200-million on alternative power solutions.
Shoprite also revealed in a January trading update that it spent R560-million on diesel to keep its operations going during stage 5 and 6 load shedding over the last few months.
This is why Real Estate Investment Trusts (REITs) like Redefine Group have announced that they are implementing solar installations across their portfolios, including big malls.
Investing in self-generation has become retailers’ only solution for the short term. Roger Hislop, energy management systems executive at CBI :energy, says that not only is small scale embedded generation essential to ensure uninterrupted business operations, but it will help to alleviate strain on the grid and reduce load shedding. “However, considering the complex nature of shopping malls and how they use energy, it is important to note that solar alone won’t solve their challenges.”
He outlines the top hurdles facing South African retailers in embracing renewables and how to mitigate them:
- Power monitoring and load management: The majority of malls still don’t monitor consumption properly, especially when it comes to energy hungry loads like coolers and freezers. By adding granular power monitoring and load management systems, grocery retailers and restaurants can drastically improve visibility into their usage and identify opportunities for optimising it, while also reducing costs. Ideally, this would be achieved through automated load control with intelligent feedback mechanisms to ensure perishables are maintained at the right temperatures. This could also be employed to use power when it is cheapest (Time of Use tariffs are one factor, a new, larger one is the cost per kilowatt hour of diesel generators). Besides refrigeration, malls have other large consumers of power that are not time sensitive like air conditioning and water heating. These are ideal candidates for load management, especially in terms of “maximum demand management”. This is crucial for shopping malls with embedded generation, as it ensures that the system does not become overloaded and trip, causing problems for businesses such as fast-food restaurants, which rely heavily on automated and monitored operations. Load management solutions can be used to schedule heating, cooling, lighting and other discretionary uses to avoid straining the system.
- Backup power: A power failure can cause significant disruptions for retail businesses, resulting in delays of just a few minutes for simple mom-and-pop shops, and up to 30 minutes for more complicated operations, where IT, point of sale, and back-end management systems have to come back online – not to mention the restarting of cooking equipment, which can take 15-30 minutes. Malls with embedded generation need to ensure that critical systems remain operational during outages. This requires splitting backup power into higher cost, instant power for tech and sensitive equipment (batteries/inverters), and lower cost backup systems that are slower to kick in (diesel genset). Added to this is that solar offsets utility and diesel costs, but only operates during the day, and can be complex to integrate into the energy mix as many larger systems are grid-tied and cannot operate during load shedding. With the cost and complexity of embedded generation, having a detailed view of consumption (what is using power, where and when) is critical.
- Submetering for tenants: Large anchor tenants like supermarkets often have very little idea of what’s happening internally with their energy usage because they are metered at a single point of supply. Smaller tenants are often not individually metered, but pay some kind of pro-rated amount. Shopping malls should set up submetering to track tenant consumption and furnish them with an accurate, detailed bill. This will help occupants to better manage their energy usage and energy costs. By using sub-metering for internal billing and load behaviour analysis, shopping malls can also quickly identify anomalies that may need attention.
- Building management: Shopping centres often have disparate systems, such as separate HVAC and lighting management, that need to be tied together into a single, cost-effective energy management system. This can be improved by using load management or load demand management systems that integrate all of the building’s systems into a single platform to improve energy efficiency.
- Lighting automation: Malls generally have rules about when shops can turn off their lights – and too often these are left blazing all night. Reducing waste can be a challenge when you look at the big picture, as for example, shops are required to keep their lights on until the last cinema show is finished. Smart, programmable schedulers and timers can automate lighting and ensure that lights are turned off when they are not needed. The key is to reduce waste and reduce maximum demand, while providing shoppers with a great experience in a secure environment.