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Powerless retailers: Pros and cons of backup infrastructure

South African retailers must innovate their own power backup solutions if they are to mitigate the disastrous impact of load-shedding.
Keenan Naidoo
By Keenan Naidoo, Argility divisional system manager, Argility Technology Group.
Johannesburg, 07 Mar 2024
Keenan Naidoo, Argility divisional system manager, Argility Technology Group.
Keenan Naidoo, Argility divisional system manager, Argility Technology Group.

Load-shedding has sadly become part and parcel of everyday life in South Africa and in the past 24 months, it has become a daily occurrence.

IOL News revealed that during 2023, the country experienced only 12 days without load-shedding. This is a staggering statistic that has seriously impacted SA’s business sector.

The same IOL article, with statistics compiled by EskomSePush and The Outlier, revealed that load-shedding had occurred for a record-breaking 332 days.

In 2022, this figure was 205 days, with 67 of those reported to be rated stage six. This means the country was without power for 72.6 days in 2023 – more than double that experienced in the previous year and almost 10 times as much as 2021.

Government has approved the use of independent power producers and has signed agreements with some; however, the contribution to the national grid has been negligible.

The country was without power for 72.6 days in 2023 – more than double that experienced in the previous year.

Moreover, there has been little or no improvement in the load-shedding situation, which means South African businesses must innovate their own solutions if they are to mitigate the disastrous impact of load-shedding.

There are a few options businesses can consider, including generating their own power, either entirely off the grid or generating just enough to satisfy power needs during load-shedding.

Backup power solutions and hardware failure

All electrical equipment is susceptible to failure when there is a sudden loss of power. IT equipment is particularly vulnerable, as there are many more components relying on a procedural shutdown to prevent damage and loss of data.

In terms of the retail sector, let’s focus on furniture retailers as an example. This section of the retail community usually sets up stores in shopping malls, which include lifestyle centres, factory outlets, power centres, and community, neighbourhood and convenience centres. Rarely does a furniture retailer set up a store on its own land with its own infrastructure.

The advantage of establishing a brick-and-mortar store within a mall is that the power and backup power infrastructure is usually provided by the landlord, therefore, limiting what the retailer must provide for rudimentary requirements.

It needs to be added that certain types of malls, usually on the lower end of the scale, do not provide backup power infrastructure. In such cases, the onus is on the tenant to provide their own solutions.

Basic (historic) backup solutions

Most major retailers within South Africa have historically had basic backup power solutions in place within their brick-and-mortar environments. These are uninterruptible power supply (UPS) systems which last only for a short period of time. This allows the system operators enough time to shut down the IT systems properly to avoid failure and data loss.

There are pros and cons to this solution. Let’s start with the pros:

  • It is relatively economical versus the cost of losing data.
  • As this was the historical basic standard, trading would continue manually and then later be captured onto the system once power was restored.

Cons:

  • UPS does not allow trading during extended periods of interrupted power supply.
  • The potential for loss of business is greater where customers are unwilling to sit through a lengthy manual process.

Business-owned backup power solutions

In malls where the landlord does not provide a backup solution, or where the retailer has a store on its own premises with its own infrastructure, it would own and architect a proprietary backup power solution.

These solutions, while costly to implement, put full control into retailers’ hands. They would then manage their power requirements and expenses to reap the best returns on their investment from the power solution.

Intelligent power management systems would have two or more power sources, and these are configured to switch between grid power and the next available power source.

The retailer would usually implement a combination of a standalone UPS, or a UPS built into the power management system, which would mitigate the loss of power when it shifts between power sources.

Again, there are pros and cons to this situation.

Pros:

  • Retail is in full control of its own power needs.
  • Risk of data loss, hardware failure or loss of business is almost always mitigated.

Cons:

  • High upfront costs.
  • High fuel costs of running on diesel.

When a tenant leases a space from a mall, it can opt for usage of the centre’s backup power systems as part of the lease but obviously also always at an additional cost. These costs are usually dependent on the usage.

The upfront costs of implementing these solutions are covered by the malls, with the retailer normally implementing only a basic backup power plan within the store to mitigate fallout when the mall’s systems switch between power sources.

Again, there are positives and negatives to this approach. On the positive side it means no upfront implementation costs and usage can be monitored to stay in line with budgets and/or expense management.

However, the downside is that high utilisation can drive costs up during peak trading periods.

In my next article I will reveal the benefits and possible caveats of backup solutions provided by landlords/malls.

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