Page 86 - IRMSA Risk Report 2023

CHRIS YELLAND:
The consequences however of this risk materialising
Being at stage six loadshedding for very extended are so big that insurance companies who are in the
periods means we’ve had to reduce demand by risk business have decided that they’re not going
6000 megawatts regularly, which is very significant to cover this risk because the risk is too big for
and that has resulted in loss of power for up to them and will create a financial sustainability risk
eight hours a day. So I think at last, it’s starting to to them. The Banking Association of South Africa
really hurt and it has really woken up the politicians. is starting to take an industry wide look as to what
A politician just recently shared that South Africa is would happen if there was a national blackout to
on the brink of a national blackout. It’s not true. the banking and financial sector. Even though it is
It is false. It is the kind of political rhetoric that is a low probability event, to have emergency plans
dangerous. I would say that Eskom and the country in place is critical. I would say one should start
are better prepared now than in 2008. In other thinking what would it mean for one’s business if
words, the risk of a national blackout then was it went without power for two weeks and what risk
much higher than it is now. response strategies should be put in place.

Why? Because we are very well experienced. We So there are three different scenarios that one might
have loadshedding schedules, national control want to consider, perhaps a pessimistic scenario, a
protocols and many other measures that Eskom realistic scenario and an optimistic scenario. If one
have put in place governing the levers that is at was without power for more than a day, batteries,
their disposal to prevent a national grid failure. The laptops, home batteries, ATMs and telecoms
risk of a national blackout is when there is a sudden towers would probably become unavailable. So
drop in supply, or a sudden increase in demand one can also then imagine an environment where
that you don’t respond to. In other words, you there’s no lights at night where there’s no phones,
don’t take the necessary action to bring supply and you can’t communicate. No more water in the taps
demand in balance. There are a whole load of levers because the pumps don’t have electricity to pump
to bring supply and demand in balance. Some of water into the reservoirs. You wouldn’t be able to
them are fairly slow responses that requiring human buy food as shops would be shut. They can’t sell
intervention. Others are automatic responses that on credit, cash only and you wouldn’t be able to
occur automatically within a fraction of a second, buy petrol, petrol pumps wouldn’t be working. I
or within a second or within 10 seconds. suggest that in an environment like that one could
expect massive social unrest and looting.

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86 IRMSA RISK REPORT 2023/24