Pick n Pay’s plans to ditch Eskom
Pick n Pay wants to ditch Eskom in favour of alternative electricity sources, the grocery retailer’s CEO Pieter Boone revealed during an interview with SABC News.
The company says it is investing in alternative sources to keep its operations afloat and is in discussions with landlords to end its reliance on South Africa’s national power grid.
“It’s part of our strategic initiative and also part of the plan in relation to our ESG [environmental, social and governance] strategy,” Boone said.
“And of course, we are in close contact and in discussions with the landlords where we occupy [sites] in centres in order to find alternative sources than only electricity from the grid.”
The move isn’t Pick n Pay’s first involving alternative power sources, with the retailer partnering with Fortress Real Estate Investments (REIT) to develop its solar-powered Eastport distribution centre in 2021.
“You will see in our new Eastport DC, we are fully on solar, and as a consequence of that, the building will have a green label,” Boone said during the interview.
According to a Fortress REIT press release, it will ultimately own 40% of the development, with Pick n Pay holding a majority share of 60%. It expects to complete the project by June 2023.
“Fortress will fund the incremental capital required for the development from existing available facilities,” it said.
The distribution centre is located at the Eastport Logistics Park near the OR Tambo International Airport in Kempton Park, Johannesburg, and will cover 36 hectares with state-of-the-art infrastructure.
Before June 2021, Pick n Pay’s solar-powered distribution centre likely wouldn’t have been allowed as the limit for private power generation was set at a single megawatt.
Render showing how Pick n Pay and Fortress REIT’s completed Eastport distribution centre could look. Image from: Daily Investor.
However, on 10 June 2021, President Cyril Ramaphosa announced that he would increase the embedded generating electricity capacity threshold from 1MW to 100MW, allowing households and businesses to build much bigger self-generating power privately.
Ramaphosa then announced he was lifting the threshold entirely in July 2022 as part of his plan to fix Eskom and end load-shedding.
The government’s decision to raise the licencing threshold to 100MW unlocked a pipeline of more than 80 confirmed private sector projects with a combined capacity of over 6,000MW.
Due to the enthusiasm with which the private sector received the invitation to produce their own power, Ramaphosa said the government would remove the embedded generation threshold.
Pick n Pay is not alone in its quest to escape Eskom, with a section of the Linbro Park suburb in Johannesburg announcing its intentions to ditch the power utility and get electricity from a private power producer instead in May 2022.
Greenstone Energy asked the National Energy Regulator of South Africa (Nersa) for permission to supply the area with electricity using gas-powered plants.
It would serve 1,781 households, three offices, two schools, two churches, a hotel, and a conference centre.
The move came after the suburb’s residents and businesses suffered 66 days of power outages on top of their typical load-shedding schedule.
South African Independent Power Producers Association chair Tommy Garner stated that Eskom was not meeting the requirements of its distribution licence in the area.
The suburb plans to acquire an initial 1MW of gas generation from Greenstone, which will increase to 5.8MW as developments in the area expand.
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