Businesses prepare for grid collapse in South Africa

[Nat Quinn]

In light of the unsustainable stages of load shedding, key industries within South Africa’s business sectors have been preparing for a total grid collapse to keep staff safe and services running, reported the Sunday Times.

While The South African Reserve Bank (SARB) stressed that it is unlikely that a regional or national grid failure could occur, higher and longer stages of load shedding have sparked fears among industries such as the telecom, retail, mining and financial services sectors – with many executing scenario planning in case of a total grid collapse.

In South Africa, companies that provide communications, banking and food have installed backup power and accelerated their planning for even deeper power cuts, said the Sunday Times.

According to the publications report, MTN has set up “war rooms” to ensure critical sites remain operational and the JSE has enough diesel to run its operations for seven days.

Over the course of last year, MTN deployed more than 2,000 generators to counter stage four and higher load-shedding.

The telecom company said that the constant pressure of power outages requires 24-hour monitoring, and it had put power contingencies in place in all provinces.

Mines have also installed generators to ensure mineworkers can be brought to the surface, and the Reserve Bank this week disclosed it was working with the financial sector and other industries to plan for the event of a grid collapse, said the Sunday Times.

This includes several food manufacturers and retailers, such as Tiger Brands, Pick n Pay, and Dischem, which have been forced to spend millions on backup power utilities.

Pick n Pay reported costs of around R60 million per month to run its diesel generators to keep the lights on, while Dischem reported costs of over R36 million.

“The costs of operating in the current unpredictable and suboptimal environment are high,” Tiger Brands told the Sunday Times, adding that the incremental cost of using backup generators between October 2022 and January 2023 was R27 million.

As of Sunday (26 February), Power utility Eskom downgraded load shedding to stage 5. Load shedding has been at stage 6 for almost an entire week – the longest stretch of such a high level since January.

However, Eskom also confirmed that over 7,000MW were removed from the grid at times, saying that load shedding hit stage 7.

Former Eskom CEO Jacob Maroga said the power utility technically implemented stage 8 load-shedding this week, as any cuts above 7,000MW are stage 8.

Despite these levels, businesses in South Africa still agree with the SARB’s notion that a total grid collapse is unlikely, such as Massmart, which said it regarded “total grid failure as a low probability event”.

However, it seems South Africa is on a slippery slope. According to the Bureau for Economic Research, the electricity situation in South Africa remains dire.

The National Energy Crisis Committee (Necom) announced last week that Eskom has ample diesel supplies for now – which is helping shield the country from up to two stages of load-shedding during peak hours.

Without the diesel-powered turbines, South Africa would already be at stage 8 or even up to stage 10 when you consider the power utility technically implemented stage 8 load-shedding this past week.

 

Businesses prepare for grid collapse in South Africa (businesstech.co.za)

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