KIM POLLEY: Iberian blackout exposes a global energy weakness SA knows too well

Last week, Europe received a harsh reminder that energy insecurity isn’t confined to emerging markets.

A sudden, widespread blackout brought much of Spain and Portugal to a halt. Train networks failed, mobile communications collapsed, hospitals scrambled to get backup generators going, and citizens flooded darkened streets in search of information.

For most it was their first experience of a total grid failure. For South Africans it sounded eerily familiar.

That such a disruption occurred in two of Europe’s most advanced energy systems — countries with strong renewable uptake, robust policy frameworks and integrated grids — should challenge the assumption that load-shedding is purely a symptom of developmental underperformance.

It suggests something more fundamental — that energy systems globally are under unprecedented stress, and no country is immune to sudden collapse.

SA’s energy crisis has long been seen as a domestic governance failure, and certainly mismanagement, corruption and underinvestment have played a role.

But in light of recent events in Iberia it may also be viewed as a harbinger of what happens when grid complexity overtakes the pace of reform. The rest of the world is now facing some of the same tensions we’ve been forced to live with for over a decade.

Europe’s crisis is not just a validation of SA’s experience, it’s a global wake-up call. Grid resilience is not a “nice to have”, it is a critical economic infrastructure priority, on par with ports, roads and financial systems. And as countries shift to decentralised, renewable-powered energy systems the need to futureproof electricity networks will only grow more acute.

SA’s painful experience can serve as a strategic advantage if leveraged smartly. We are already battle-tested in coping with outages, decentralised solutions and alternative energy sources.

Many businesses — from mines to malls — have had to build energy resilience out of necessity. There is an opportunity now to export this hard-won expertise, particularly to nations that are only now starting to see these vulnerabilities emerge.

In the Iberian blackout Spain lost 60% of its electricity supply in just five seconds. While the root cause is still under investigation, the trigger was a sudden frequency imbalance that cascaded across the grid. That’s the fragility of modern power systems, where even milliseconds of instability can cascade into hours of disruption.

SA has lived this reality in slow motion. But unlike in Spain and Portugal, our load-shedding has been — in the main — planned, and deeply embedded in economic forecasting. And yet despite this experience we are not much further ahead in strengthening our system’s resilience.

The shared priorities emerging from both SA’s ongoing energy crisis and the recent Iberian blackout point to a clear agenda for resilience. First and foremost is the need for grid modernisation — not only upgrading physical infrastructure but also embedding intelligence into networks to manage increasingly variable supply and demand.

Real-time data analytics and frequency stabilisation tools must become the norm. As must scalable energy storage. Technologies such as batteries and pumped hydro are essential to cushion the intermittency of renewables such as solar and wind.

SA’s 2023 announcement of planned procurement of 1,230MW of battery storage was a promising step, but far greater pace and scale are required to make it a reality.

A resilient system also depends on a balanced energy mix. The Iberian incident is not proof that renewables are unstable, but it is a reminder that diversity in the energy mix — including clean baseload options such as gas with carbon capture or next-generation nuclear, adds security.

Finally, stronger public-private co-ordination is essential. Spain and Portugal benefit from sophisticated grid operators that work closely with private energy players.

SA’s embedded generation market is growing, but it will need more robust frameworks to integrate private producers into grid stability planning and national energy security strategies.

The reality is that blackouts, whether sudden or scheduled, undermine investor confidence, productivity and national morale — and are especially unwelcome in a municipal election year.

The message from Europe is clear. Modern economies depend absolutely on electricity, and the line between stability and collapse is far thinner than most realise.

SA has lived this truth longer than most. But with the right strategy, investments and political will, backed by a clear policy environment that rewards reliability, we can move from being an energy cautionary tale to a source of the solutions the world needs now.

• Polley is managing partner and senior emerging markets adviser at Instinctif Partners.