Fears of a national blackout resurfaced this week as load-shedding intensified, but the telecom, retail, mining and financial services sectors have been working on scenario planning for a total grid collapse — in some cases for several years — to keep staff safe and services running.
MTN has set up “war rooms” focused on ensuring key sites remain operational, while the JSE has enough diesel to run its operations for seven days. Mines have 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 “unlikely” event of a grid collapse.
Duncan Wanblad, CEO of Anglo American, said on Thursday: “Am I worried that the national grid will fall over? I am probably as worried as you are that it does fall over because we know if it does there is material damage that can get caused to the system and that will set us back even further.
“Therefore, a careful joint management of the system is going to be required in the next while.”
Wanblad, speaking after the release of the group's results, added that South Africa was experiencing longer and higher levels of load-shedding to ensure the grid did not collapse.
“In South Africa we are in a unique conflation of a number of issues that are very destabilising for this environment.
“The one thing I think is critical is the backbone infrastructure of the country — be it the electricity supply or the logistics supply management. Really [they] are very important to create an environment where businesses can operate and flourish.”
Concerns about a national blackout are creating fears of possible social unrest as water and other crucial supplies may become scarce.
James Wellsted, Sibanye-Stillwater spokesperson, said: “If the grid collapses, the country dies. It will be a major crisis. You will get a situation of no electricity and no running water because water cannot be treated without electricity.
“A major risk factor we have identified as Sibanye-Stillwater is social unrest, and the impact of the riots in KwaZulu-Natal can still be felt. Should the grid collapse there will be social unrest similar to two years ago.”
In the event of a grid collapse, Johan Theron, spokesperson at Impala Platinum, said for Impala Rustenburg safely evacuating people from underground and dealing with the molten metal in the furnaces would be their first consideration.
Mining by nature has an elevated risk and therefore risk management and emergency preparedness is prioritised at the highest level possible. Impala Rustenburg is no different, he said
These potential risks include health and safety risks from working underground and extreme weather.
“The risk of an extreme power disruption is naturally included and prioritised at each operation. This is not unique to Rustenburg or South Africa — grid failure is also covered at our operations in Zimbabwe and Canada.”
Allan Seccombe, spokesperson for the Minerals Council SA, said: “The most important risk is the safety of employees and that is closely managed by mining companies in their engagements with Eskom when they are asked to curtail their electricity consumption.”
Mining companies have installed generators to ensure they can bring employees to safety, pump water, circulate air and operate control rooms, Seccombe said.
A national blackout could last days, weeks or longer, depending on the severity of the damage to the country's electricity network. Countries that have experienced grid collapses include Venezuela and Pakistan. In 2003, a blackout in parts of Canada and the US affected about 55-million people.
In South Africa, companies that provide communications, banking and food have already installed some forms of backup power and accelerated their planning for even deeper power cuts.
MTN said it was working around the clock to ensure connectivity, “with an aggressive rollout of batteries, generators and alternate power supplies”. It had upgraded its battery backup solutions on more than 80% of its sites this year and was deploying additional batteries.
“MTN has the challenge that the current outage schedule does not allow enough time for batteries to charge. Battery backup systems generally take 12-18 hours to recharge, while batteries have a capacity of about 6-12 hours, depending on the site category.”
MTN deployed more than 2,000 generators in 2022 to counter stage four and higher load-shedding.
The telecom company said “the constant pressure of power outages requires 24-hour monitoring” and it had put power contingencies in place in all provinces. This included establishing “war rooms” per region with dedicated staff focused on restoring major transmission infrastructure and base stations in the event of severe load-shedding. It had withdrawn field maintenance teams to redeploy them to exclusively focus on site restorations; and it had ensured “the delivery of fuel to all critical facilities to ensure all MTN data centres remain operational. MTN does not anticipate any disruptions to any of these facilities.”
Vodacom said “it would be impractical - financially irresponsible even - for the industry to invest in ensuring an uninterrupted service in case of a national power blackout.
“Naturally, Vodacom has scalable plans in place to deal with a range of scenarios including protecting our computer centres and keeping our core IT equipment running to ensure normal service is resumed as quickly as possible.”
Vodacom has invested R2.5bn in the past three years and will continue to invest “to increase on site generation on our sites”.
It added that “in the event of a national blackout, the biggest risk to the industry would be damage to infrastructure due to theft or vandalism.”
Bloomberg reported that the JSE had enough diesel for its generators to keep its systems running for six to seven days and it was planning to get more fuel and to add to water supplies stored at the exchange.
A “comprehensive” response to a total failure of the grid has been shared with “key role players”, it said.
Zinhle Tyikwe, CEO of the Consumer Goods Council of SA, said “while we have been assured that Eskom uses load shedding to mitigate against the risk of a potential grid collapse, we urge that measures be accelerated to improve reliability of power supply … Needless to say that a grid collapse would be catastrophic for food security and the supply chain of virtually every consumer goods ranging from food to medicines. It should therefore be avoided at all costs.”
Massmart said it regarded “total grid failure as a low probability event”.
“This said, we track the situation closely and remain prepared.”
Tiger Brands, which was installing solar capacity, said “the costs of operating in the current unpredictable and suboptimal environment are significant”. The incremental cost of using backup generators between October 2022 and January 2023 was R27m.
“We have developed contingency plans for stages 6-8 which will require a further capital investment of around R120m for additional generating capacity” to increase diesel and water storage capacity.
The Reserve Bank said its financial sector crisis forum (FSCF) was working to develop a response to a prolonged electricity outage which could force the finance sector and regulators to implement “an orderly closing and reopening of markets”.
It said the forum existed to test the financial system's resilience to risks such as a blackouts, even though the bank considered a national grid failure “unlikely”.
The FSCF had since 2015 been preparing plans to respond to a national or regional electricity grid failure and was in regular contact with Eskom, the petroleum and telecommunications industries, it said.
Standard Bank said it constantly tests its business continuity plans to effectively respond to disruptive events.
“We are working closely with the Reserve Bank, other banks and key service providers to ensure appropriate levels of readiness in the unlikely event of a prolonged power outage.”
Absa said it “would align to the Reserve Bank and FSCF’s guidelines in managing any electricity-supply-related risks.” It has also devised its own contingency plans for staff and customer services, it said.
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