As higher stages of power cuts intensify due to constrained supply, Business Unity South Africa (Busa) has urged industries to stay updated with information from their electricity service providers and keep abreast of system outlooks.
This comes as Eskom yesterday implemented Stage 6 load shedding an hour before schedule, due to the cold weather and the failure of two generating units.
The struggling power utility has alluded to higher stages of load shedding in the winter months from June to August on the back of severe cold weather and deteriorating generation capacity.
Eskom has put in place protocols up to Stage 16 load by updating the third edition NRS048-9 document which would, in unforeseen emergencies, allow the system operator to implement drastic load shedding beyond Stage 8.
Busa yesterday said the process of NRS048-9 was essential for all South Africans, as it gives a sense of what is necessary to maintain system integrity when in a constrained electricity environment.
Speaking with Business Report, Busa’s environment and energy manager, Happy Khambule, said a total grid collapse was a constant concern as the system currently was constrained and highly sensitive.
Khambule said when the country started facing Stage 8 load shedding, impact on the economy and society become “more austere”.
He said some of the impacts might be felt by specific sectors such as the telecommunications network industry; retailers; and financial institutions leading to a loss of revenue and loss of sales, while increasing equipment failure.
“The worsening electricity crisis is likely to negatively impact investor sentiment and confidence in South Africa’s economy. This could lead to a decrease in foreign investment, negatively impacting job creation and unemployment-levels,” Khambule said.
“Load shedding higher than Stage 8 could have a significant impact on various industries, potentially leading to a loss of revenue and investor confidence, and further negatively impacting the economy.”
Seeing a looming catastrophe, businesses depending on their size, have started producing their own power and have back-up power systems.
For sectors such as finance with integrated networks, contingencies have been taken as a precaution should a total grid collapse occur.
Khambule said the grid collapse was not an easy or simple issue, and the impacts are dire, and could lead to jobs bloodbath, further declining economic value and confidence.
“It is with this in mind that major businesses are taking steps to mitigate the possible risk,” he said.
“Businesses should be cautious and alert, seek more up-to-date information as well as approach their electricity service providers to understand system outlooks.
Should South Africa face higher levels of load shedding, it will face significant impacts on businesses in the short-term and long term.
Here are some of the possible impacts, according to Busa:
1. Business Disruption: The longer we have persistent and higher levels of load shedding significant disruption to businesses occurs, especially those that rely on electricity to operate. This can result in downtime and lost productivity, leading to further financial losses.
2. Loss of Revenue: Businesses that rely on electricity to operate, such as manufacturing facilities and data centres will experience increasing revenue losses. This can be particularly damaging if the stages exceed Stage 8 for an extended period.
3. Damage to Equipment: This can cause damage to electrical equipment such as computers, servers, and other electronics, which can be expensive to repair or replace.
4. Supply Chain Disruptions: Businesses that rely on a steady supply of goods and services from other businesses may experience disruptions in their supply chains. This can result in delays and a loss of revenue.
5. Public Safety Concerns: Increasing public safety concerns, especially if businesses are unable to provide essential services or if there is a lack of emergency lighting.
6. Reputation Damage: Businesses that are unable to provide services or products may suffer reputation damage. This can lead to a loss of customers and revenue in the long term.
BUSINESS REPORT