These big companies and municipalities in South Africa want to ditch Eskom

The power situation in South Africa appears to be worsening, with the country experiencing double as much load-shedding in 2022 than last year, which was already a record-breaker.

As a result, many prominent companies and municipalities in South Africa have embarked on projects to eliminate or reduce their reliance on the country’s national power grid.

Prominent companies shifting towards renewable energy include Anheuser-Busch-owned South African Breweries, Vodacom, Nestlé, and Pick n Pay.

The shift to renewable energy and independent power producers would likely be impossible without President Cyril Ramaphosa’s administration abolishing limits on embedded electricity generation.

In June 2021, Ramaphosa announced that he would increase the embedded electricity generating capacity threshold to 100MW.

He then lifted the threshold entirely in July 2022, when he announced his plan to fix Eskom and end load-shedding.

Prominent South African companies shifting to independent power could profoundly affect the national grid by decreasing the electricity demand.

However, this could also negatively impact Eskom as it won’t generate as much revenue as before, further affecting its ability to complete necessary maintenance at its power stations.

Several South African companies’ and municipalities’ plans to ditch Eskom are summarised below.


South African Breweries

In October 2021, Anheuser-Busch-owned South African Breweries (SAB) announced its plans to transition to 100% renewable energy by 2025.

It also wants to produce Castle Lite — almost half of which is already brewed using renewable resources — using only renewable electricity.

To achieve this goal by 2025, SAB must build 191MW worth of solar generation capacity.

SAB has already begun the transition process, with the company saying that all of its breweries in South Africa use some form of solar power generation.

At the same time, its Alrode brewery in Johannesburg also uses biogas to generate electricity.

Between January and October 2021, the brewery generated 9.7GWh of renewable electricity, and it plans to further reduce its reliance on South Africa’s power grid.

SAB first announced its intentions to go off-grid in January 2020 and added that it intended to buy 100% of required energy-generation equipment from local manufacturers.


Vodacom

In September 2022, Vodacom announced that it would launch a pilot project to source all its power from renewable independent power producers.

If successful, the pilot project will provide Vodacom with renewable electricity. At the same time, other South African companies can use the blueprint to embark on their own renewable power projects.

Vodacom said this, in turn, would help solve South Africa’s electricity crisis as more companies provide surplus power to the national grid.

The power distribution situation for mobile operators is unique, with Vodacom, in particular, having over 15,000 low-voltage sites across the country with linkage to 168 municipalities.

In the past, this prevented Vodacom from accessing power purchase agreements and transferring energy over Eskom’s grid.

Vodacom will acquire its electricity from non-Eskom sources if the pilot project is successful, while Eskom will continue to provide transmission infrastructure and services.


Nestlé (Cremora and Maggi)

In November 2022, Nestlé announced that it had installed 996kW of solar generation capacity at its Babelegi Manufacturing Plant in Hammanskraal, Gauteng.

Nestlé East and Southern Africa region said the farm’s 1,806 solar photovoltaic panels are expected to deliver more than 2.13GWh of electricity annually.

Nestlé said it is aiming to have zero environmental impact by 2030 and achieve net zero emissions by 2050.

“This equates to 15.6% of the total electrical energy requirement of the factory for the full year,” the company said.

Products manufactured at the plant include Nestlé’s Cremora creamer and Maggi 2-minute noodles, and Nestlé plans to add a second phase — which will produce a further 1.5GWh annually — to the solar plant.

The installation of the solar plant in Hammanskraal is Nestlé’s second in the region, with the manufacturer having completed another at its Harrismith factory in August 2022.

The Harrismith factory solar plant has a capacity of 1,189kW, comprising 1,946 ground- and carport-mounted solar panels.

Nestlé’s solar farm at its Babelegi Manufacturing Plant in Hammanskraal

Pick n Pay

In October 2022, Pick n Pay CEO Pieter Boone revealed the retailer’s plans to ditch Eskom in favour of renewable energy sources.

Boone said Pick n Pay would invest in alternative energy sources to power its operations and that it is in discussions with its landlords to end its reliance on South Africa’s power utility.

“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.”

In 2021, the retailer partnered with Fortress Real Estate Investments (REIT) to develop its solely solar-powered Eastport distribution centre.

“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.

Fortress REIT will ultimately hold 40% ownership of the development, with Pick n Pay’s ownership share being 60%. It expects to complete the project by June 2023.

Render of what Pick n Pay and Fortress REIT’s completed Eastport distribution centre could look like. Image from: Dailyinvestor.com.

Shoprite / Checkers

Shoprite has increased its solar generation capacity by 82% in the last year as part of its goal to reach net-zero greenhouse emissions by 2050.

The retailer said its installed capacity is now 26,606kWp, made possible by 143,674 square metres of solar panels across 62 sites — up from 32 installations in the past financial year.

Shoprite’s solar installations now produce 40,894MWh, which the retailer says is sufficient to power around 3,700 households for a year.

The retailer plans to continue to grow its solar-powered and renewable energy installations to reduce strain on South Africa’s national power grid.

Shoprite said it would also continue reducing its environmental footprint.

This includes a drive to reduce electricity consumption by installing LED lights at its sites, which has saved 399 million kWh to-date.


Municipalities and suburbs

Several South African municipalities have announced plans to acquire electricity from sources other than Eskom.

While their aims aren’t to ditch the power utility altogether, at least for now, they are looking to reduce their reliance on the national grid and reduce the impact of load-shedding in the regions.

In February 2022, the City of Ekurhuleni signed 46 independent power producers who will ultimately provide the municipality with 150 and 680 megawatts of additional power from renewable energy sources.

“The City is finalising the implementation of the City programme to purchase electricity from the appointed power producers,” it said.

The news followed a statement released by the municipality in 2020, which explained that renewable energy sources would be a cost-effective solution for the city.

It specified that solar power is the best-suited technology for its needs.

In May, a section of the Linbro Park suburb near Sandton in Johannesburg revealed its plans to ditch Eskom and get electricity from a private power producer instead.

Greenstone Energy approached the National Energy Regulator of South Africa (Nersa) with a request to supply the area with electricity using gas-powered plants.

Its gas-powered plants would supply power to 1,781 households, three offices, two schools, two churches, a hotel, and a conference centre.

The section of Linbro Park wants to acquire an initial 1MW of gas generation from Greenstone, increasing to 5.8MW as developments in the area expand.

Linbro Park development. Credit: Ter Hollman

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These big companies and municipalities in South Africa want to ditch Eskom