September Blackout Cost State $367 Million

The September blackout cost the State $367 million but could have been much worse, according to a comprehensive survey of Business SA members.

The survey also found that many businesses did not have business interruption insurance and, of those who did, more than half found they were not covered for losses resulting from the blackout.

The median trading and production losses for businesses affected by the blackout was $3,500 with median wages paid, even though businesses were non-operational, of $1,500.

However, the survey also revealed that many members were not affected by the blackout and, for others, the impact was reduced by the fact the loss of power occurred late in the trading day at 4:18pm on 28 September.
That said, Business SA’s analysis of the survey responses from businesses based on Eyre Peninsula, where power was lost for three days, revealed a regional impact of more than $8 million. The median losses for Eyre Peninsula businesses were almost double the State at almost $10,000.

“While business has been pummelled with higher energy prices for the past 18 months, the blackout dealt a real body blow to the State’s economy at a time when it least needed it,” Business SA’s Executive Director, Industry and Government Engagement, Anthony Penney, said today.

“Many of the affected businesses did not have business interruption insurance cover and a majority of those that did, unfortunately, found that their policies did not cover them for the specific losses they suffered,” he said.

“Another interesting finding from the survey, which attracted more than 200 responses, was that only 12% of businesses had backup generators to cope with the loss of power.

“The overall financial impact on the State was a loss of $367 million but, in occurring late in the trading day, the effect of the blackout was lower than it would have been if it had occurred just as businesses started trading for the day. Considering 70% of respondents had power restored within 24 hours we are looking at a cost of close to $120,000 per minute for business in the State. 

“It was a very high price to pay. The one ‘benefit’ out of the blackout was it put the issue of electricity pricing and security of supply firmly on the national political agenda and Business SA looks forward to positive action by both Federal and State governments in coming months.

“Given the cost of the blackout, Business SA has serious concerns of future load shedding incidents, or brown-outs, come the summer and have been calling on the government to provide assurances everything will be done to prevent any further negative impact to business. Despite some commentary that brown-outs occur regularly throughout summer months, there have only been three in the past decade, excluding the blackout of 28 September.” 

Explanatory note on the Blackout Survey Results:

In order to extrapolate from the survey responses and make an assessment of the overall cost of the blackout to South Australia, Business SA has used the median figure – the half way point – in responses from members. The median figure is a more statistically valid way to calculate  the State-wide impact because it includes respondents who did not suffer any financial impact. Using average losses would overstate the overall impact because the calculation only includes those businesses that suffered losses and would not properly reflect the makeup of the survey respondents.

As such, while many of the median figures included in the survey report are zero, this is an indication that a lot of people – half the survey sample – were not affected by the blackout. However, the experiences of those that were affected are reflected in the average losses included in the report.

DOWNLOAD full survey report.


Media Contact

Sonia Bavistock
Media & Communications Executive
0477 006 475

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