Stage 8 load-shedding and total blackout warnings for South African businesses

South African businesses are urged to plan for stage 8 load-shedding and a total blackout to ensure they are sufficiently prepared for these events.

The Financial Sector Contingency Forum, which includes the central bank and other financial regulators, said they continue to plan for a grid collapse.

It said a total blackout is an improbable but not impossible scenario, which is why it has plans to mitigate the impact on the financial system and the economy in case of a grid collapse.

Standard Bank CEO Sim Tshabalala previously explained that a total grid collapse is a possible scenario with a low probability.

However, because it will have devastating consequences, businesses must prepare for it and know what to do when it happens.

Chris Hattingh from the Centre for Risk Analysis said a grid collapse is an unlikely event with a probability of between 0.1% and 1%.

Despite the low probability, he said businesses and individuals should have plans in place to mitigate the impact should it occur.

A far more likely scenario is South Africa facing stage 8 load-shedding in winter, which will mean power cuts for at least half the day.

IRMSA chief risk advisor Christopher Palm

The Institute of Risk Management South Africa (IRMSA) said that expected stage 8 load shedding in mid-winter in South Africa presents a grave threat to multiple sectors of the economy.

IRMSA said that stage 8 load shedding represents a severe disruption to businesses, critical infrastructure, and security, exacerbating the livelihood risk.

The body warned organisations across all sectors to start taking action now to mitigate the fallout and to take the threat seriously.

Christopher Palm, former Eskom executive and IRMSA’s chief risk advisor urged risk managers to take immediate steps to refresh their business impact assessments.

He said that stage 8 power cuts require risk strategies to go beyond batteries and diesel generators to water supply and security.

It will lead to significant financial losses, decreased productivity, and potential damage to essential equipment, machinery, and communication.

Businesses should, therefore, review the effectiveness of existing risk response strategies and business continuity plans.

The group urged businesses to get ahead of stage 8 load shedding by reducing their reliance on the national grid.

They should also communicate with suppliers and other stakeholders on their readiness for outages and keep lines of communication open with clients, employees, and suppliers.

Purple Group chief risk officer Nicola Comninos

Purple Group chief risk officer Nicola Comninos said it is critical for business leaders and risk managers to ensure business continuity during higher stages of load-shedding.

She said businesses should look at scenario planning, including their alternative energy sources and whether they will suffice during stage 8 load-shedding.

Comninos advised businesses to also look at their suppliers and whether they have contingency plans to withstand increased power cuts.

She said Purple Group has decided to close its permanent offices and move to a WeWork space which helps them to manage the risks linked to power outages.

WeWork manages the power supply, which takes the risk off smaller organisations like Purple Group to do it themselves.

“If the Rosebank WeWork office goes down, we can move to the Sandton office and continue to operate,” she explained.


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