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Commercial Property Company news South Africa

How long can your business go without grid power?

How long can your business operate without Eskom grid electricity? Two hours? Two days? Two weeks? More importantly, how long should it be able to operate without electricity? This is one of the most important questions businesses in South Africa should be asking right now, advises Jason Griessel, head of Cushman & Wakefield | BROLL Strategic Risk Services.
How long can your business go without grid power?

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. 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. 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.

“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,” urges Griessel. “At Cushman & Wakefield | BROLL, we have updated our own business continuity contingencies, having already undertaken scenario planning for this possible risk.”

Business continuity planning for load shedding and grid failure are very different. 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.

He adds, “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 Cushman & Wakefield | BROLL Strategic Risk Services team has studied events that follow grid failures, including recent incidents in the US and India. They found that restoring an electricity grid elsewhere has taken from three to eight days.

“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,” cautions Griessel.

Cushman & Wakefield | BROLL Strategic Risk Services has specifically dealt with crises of this scale before and created modelling to better understand milestones during these types of events to ensure clients are informed and ready to take action.

Shedding light on what South Africa’s businesses could face while the grid is being restored, he notes that consequences could include the disruption of telecommunications, logistics and food, water, medical and fuel supplies.

“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,” advises Griessel.

As a pan-African strategic risk consultancy with a diverse understanding of security, health and safety in multiple sectors, Griessel and his team have helped their clients to navigate the recent challenges of #EndSars mass protests in Nigeria in 2020 and the KwaZulu-Natal civil unrest in South Africa in 2021, among others.

Looking at solutions for a communication blackout, Griessel notes it’s helpful to keep in mind 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 are now more important than ever.

He also believes retail property owners and retailers would do well to 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,” says Griessel. “A little planning goes a long way.”

Catchwords is born out of one of the original real estate and retail property marketing and communication agencies in South Africa. We think strategically, stand for simplicity and work with agility.
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