RISK MANAGEMENT The risks of and mitigating options Lion of Africa Insurance examines some of the potential risks associated with Eskom’s load shedding programme, as well as the measures to mitigate those risks. Forewarned is forearmed, and by adopting appropriate measures significant costs can be saved, writes Manuel Chikwanda, insurance risk manager at Lion of Africa Insurance t is a certainty that load shedding is here to stay for some time to come. Although new power is set to come online as Eskom’s Medupi, Kusile and Ingula plants add to the generation capacity, the backlog remains high. In addition, existing power plants are in desperate need of maintenance, which will result in temporary loss of capacity. load shedding may require this to be undertaken every six months. It is far cheaper to perform maintenance on switchgear than to repair them when they malfunction. However, with extended power outages in store, even those expenses seem insignificant when compared to the costs to the economy when switchgear fails. IMPLICATIONS FOR CONSUMERS AND MUNICIPALITIES Apart from the loss of productivity, which all power users suffer when load shedding occurs, consumers also face the loss of equipment that needs power to operate. This risk is compounded as power surges, which can temporarily raise the voltage in electronic circuits from a few hundred to as much as several thousand volts when the electricity supply is restored. This can damage electrical or electronic equipment, even if the surge lasts a mere millisecond. The more sensitive the equipment, the more at risk it is. Electric and electronic devices face two risks from power surges: they are exposed to substantially more power than they were designed to withstand, which can burn them out; and smaller surges can damage the wiring and components, which leads to failure after repeated surges. Power distributors, such as municipalities, face the risk of damage to their switchgear – the switching devices used to regulate the power system. Increased usage of switchgear for load shedding purposes means that they face a heavier duty cycle. The more frequent operation means that the maintenance cycle will be shorter. For example, if under normal circumstances the maintenance cycle is 24 months, TAKING STEPS FOR PROTECTION AGAINST RISKS Installing a protection system and scheduling frequent testing to ensure that it is functioning normally is one option. With each surge that takes place, the protectors will absorb some of the impact; however they will also lose some of their ability to protect. With more frequent load shedding, and hence more frequent protector usage, their lifespan will be ESI AFRICA A ISSUE 1 2015 “ Many people believe that connecting to a UPS will protect their electrical and electronic equipment from power surges reduced. Checking protection systems regularly will help to ensure that they are fully functioning and alert you to replace them thereby reducing the risk of loss. LOAD SHEDDING INCREASES THE RISK OF CABLE THEFT Another risk that can result in additional loss of power is that of cable theft. With load shedding schedules widely publicised and electricity guaranteed to be cut for hours at a time, cable theft is easily facilitated. The best way to mitigate this risk is to bury cables within a concrete conduit, making theft considerably harder than when cables are easily accessible with the use of simple hand tools. Although this does not apply to overhead cables, those comprise a far smaller proportion of power cables in general. BREAKING THE MYTH ABOUT UPS A final point that I would like to make about mitigating risks arising from load shedding is the popular misconception about UPS (uninterruptible power supply). Many people believe that connecting to a UPS will protect their electrical and electronic equipment from power surges. This is not the case and is a dangerous error to make. A UPS contains a battery which ensures that power, especially to critical equipment (such as computers) is maintained in the event of a power outage or load shedding. While the mains power is working, a UPS will directly power any equipment plugged into it, bypassing the battery, while also charging the battery to keep it fully charged. Once the electricity supply is cut, the UPS immediately switches to battery power, ensuring no disruption. The UPS is not a surge protector and could, itself, be damaged by power surges. To mitigate this risk, users need to ensure that a UPS has its own protection installed. ESI AB ABOUT THE AUTHOR: Ma Manuel Chikwanda (BSc En Eng (Hons), MBA, PDRM, MI MIRMSA) is a multi- d is disciplinary specialist with o v over 19 years’ experience in engineering, risk ma management and business ma management environments a n and undertaken risk a s assessments across most of southern Africa. 91