Experts warn businesses to prepare for total blackout

Even though a total collapse of the power grid and a complete blackout is unlikely to happen in South Africa, experts say that businesses in the country still need to have serious contingency plans in place in case it does.

According to risk experts at real estate intelligence group Cushman & Wakefield Broll (CWB), a total grid shutdown scenario was previously unthinkable in South Africa, but escalating levels of load shedding, and the sudden changes to these schedules that occur daily, indicates greater instability, forcing many businesses to come up with contingencies.

“Load shedding is implemented to lower the possibility of grid failure by balancing supply and demand to keep it stable. Grid failure is a sudden loss in electricity generation that happens too quickly for any manual intervention to stabilise the grid. Every time we reach a higher level of load shedding, it signals a greater imbalance,” the group said.

“When load shedding escalates to higher levels with little to no notice from Eskom, it signifies a sudden and unexpected loss of generation. In 2023, we have seen more load shedding implemented in a way that points towards the possibility of grid failure.”

Many organisations have contingencies in place for load shedding, the group said; however, grid shutdown is a scenario that has not been previously contemplated to any great extent by many businesses – until now.

“Several recent announcements have brought this possibility to the fore. Among them, the US Overseas Security Advisory Council (OSAC) advised its stakeholders in South Africa to have contingency plans for power outages.

“Also, some in the insurance industry advised clients that they will not provide support for losses in the event of a collapse of the electricity grid, whether this is municipal, provincial or national,” it said.

“We have been reassured that a total collapse of the power grid remains improbable. Nevertheless, it is a possibility, and businesses should prepare if they can, especially with all signs pointing to any grid failure and reinstatement ultimately being an uninsurable event.”

Making a plan

Business continuity planning for load-shedding and grid failure are very different, the experts said.

The first can usually be managed within the business premises, with on-site power, water and other backups for a few hours. In a large-scale outage, the same is required but for a greatly extended period in addition to backups for critical resources beyond this, from telecoms to logistics.

“There are significant advantages to including grid failure scenarios in business continuity planning. Ultimately for businesses, it costs less money to get prepared now. These contingencies will inevitably prove useful in other emergency situations too.

“Importantly, companies have a duty of care to their employees to support them during times of crisis, and it should be the policy of every company to be able to manage functionally through a crisis.”

The group said that several international grid failures show that it takes anywhere between three to eight days to restore power. Eskom’s own warnings are that the country could be thrust into permanent darkness for weeks should the grid collapse.

“It takes more than simply flicking a switch to restore an electricity grid. Considering the time it takes emergency services to respond in overwhelming crisis, criminal sabotage during power outages, and the crumbling electricity grid that isn’t designed to be repeatedly stalled and jumpstarted, there is consensus that restoring a failed Eskom grid could take longer – two weeks or more,” it said.

According to former Eskom CEO Andre de Ruyter, should South Africa’s grid collapse, the results would be catastrophic. Consequences would include widespread disruption of services, including telecommunications, sanitation and others, as well as heightened risk of unrest, looting and violence.

“From experience, when faced with an extreme scenario, we know that the most important capabilities are the ability to communicate and coordinate, which make it easier to manage a crisis calmly and constructively,” said CWB.

Looking at solutions for a communication blackout, the experts said that cellular and fibre networks require electricity, but satellite networks don’t.

“With logistics and supply chains becoming unstable in a crisis, increasing the potential for fuel shortages, generators requiring diesel could become less reliable backup solutions than solar-powered systems. Of course, regular data backups are always a must for any business but they are now more important than ever.”

The group said that retail property owners and retailers should also plan for the operation of grocery, pharmacy and other essential retail and services, because shopping centres are hubs of sustenance and communication in their communities, and this role would be amplified during a prolonged period of grid restoration.

“You cannot implement a crisis plan if you don’t have one in place,” it said.

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