A massive blackout on Monday cut power in much of Spain and all of Portugal, plunging hundreds of thousands of citizens into darkness. The Portuguese electricity operator REN attributed the blackout to a rare atmospheric phenomenon. This phenomenon is linked to the growing extreme oscillations in temperatures occurring in Spain. Eduardo Prieto, head of operations at Red Eléctrica, called the occurrence “exceptional and extraordinary.” The four-day outage was a blow to operations. Airports shut down, public transit ground to a halt, and some reports say that recovery will take a week or more.
In Spain and Portugal, the blackout knocked out phone lines, card payments, and emergency services. When Lisbon Airport completely closed, constraining all flights out of the major airport in the area. Metro and train operators brought services to a halt across the Iberian Peninsula. Beatriz Barber, a Madrid-based staffer with CCOO, described her day when the general strike went down.
I was working normally until 12:30 p.m. I participated in a global online meeting from my office. Then, all of a sudden, the counterpart we were on with goes silent, — Karen K, “It was a shock.”
The magnitude of the disruption underscores fragilities in our highly developed infrastructure, as well as the interconnectedness of critical services.
Economic Impact and Business Disruptions
The incident has since led to fears of economic fall-out for Spain and Portugal. With Spain’s economy growing at 3.2% in 2024—considerably above the eurozone average of 0.9%—this incident poses a potential short-term setback. Downtime in a business can lead to serious financial loss, according to experts. According to one study, in the auto industry alone, a single hour of downtime can accumulate costs of up to $2.3 million.
Michael Riegel, CEO of Navan for EMEA, emphasized that the failure affected thousands of travelers. These concerns impacted people from over 350 firms on account of the blackout.
The disruption has not only impacted travel providers operating in the region but all the businesses traveling yesterday and this week,” he highlighted.
About 30,000 business travelers used to cross to or from Spain and Portugal each day and so many of them were severely disrupted that this was a crisis. Almost half of all impacted workers had been employed at tech and internet firms. As shown in the picture, they constituted 41.5% of the disrupted business travelers.
Infrastructure Resilience and Future Challenges
This latest power outage should prompt leaders to ask difficult but important questions about infrastructure resilience and preparedness for additional extreme weather events going forward. Tim Johnson, CEO and co-founder of Endevor, emphasized that aging infrastructure, budget constraints, and severe weather events pose ongoing challenges for utility companies worldwide.
“Weather events, aging infrastructure, and budget challenges are all key issues for today’s utilities companies around the world,” Johnson stated. “The Spain/Portugal outage demonstrates the need for deeper insight and prioritization into building the grid of the future.”
Ryan Polk, director of internet policy at The Internet Society, pointed out that without electricity, no matter how redundant, the internet will fail in its resilience. “If there is no electricity to power routers, switches, receivers, and data centers, then there is no Internet,” he explained.
Alpesh Patel commented that the future payments ecosystem needs to empower payments to be resilient when outages occur. “Events like this blackout highlight the urgent need for the financial and telecom industries to collaborate to ensure that when the grid fails, commerce doesn’t,” he said.
Implications for Future Preparedness
The recent blackout is a reminder to service providers and the government that more must be done to make our infrastructure resilient. Speaking at our 2023 U.S. Taken together, these solutions can help reduce our collective reliance on a single source and ultimately insulate us from the kind of outages we’ve been left to experience this summer.
“It’s mission-critical to have sufficient alternative power supply and mitigate single-source exposure of power supply,” Woitzik remarked.
One of the biggest takeaways, they discussed, is that redundancy in connectivity and offline payment capabilities need to be fundamental tenets of new infrastructure. We hope that this is a wake-up call,” said T4America deputy director Alpesh Patel. Redundancy in connectivity, offline payment capabilities and alternative transaction processing solutions are no longer optional—they are required.
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