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A 15 minute power outage, a nightmare for business

Even the briefest power interruption can have a costly impact on businesses. We discuss what lessons can be learnt from the UK's recent major power cut.

The biggest power outage in a decade provided a sharp reminder of the need for businesses to think seriously about energy resilience and have a robust emergency backup plan should the worst happen.

The lights went out on nearly one million customers across England and Wales at around 5pm on Friday 9 August and caused chaos for rail, road and air commuters. Retail tills froze, manufacturing processes halted, IT systems crashed and many businesses had no electricity supply.

Counting the cost of power loss

Although power was restored to most sites within an hour,  it may take longer for some of the affected businesses to recover from the ordeal. Energy loss can be highly damaging – both in terms of lost productivity and potential reputational damage. In certain instances, even the briefest power interruption can cause equipment damage, which is why it's so critical that organisations are well prepared. 

Sometimes it's only when a power outage occurs that we realise the extent to which our organisations rely on a consistent energy supply. At this point any vulnerable areas of operation become obvious, but by that time the damage is done. 


What went wrong?

We're awaiting a full report from National Grid of what caused the latest incident, but we know that the simultaneous failure of two large generators caused a large frequency drop below the safe threshold level, which prompted automatic safety systems to shut off power to certain areas of the UK in order to reduce demand on the network.

While National Grid says this was an "incredibly rare" event, when events like this do occur they can significantly impact businesses. Climate change is causing more and more extreme weather events, such as flooding, which is a major challenge to energy continuity. Other threats include cyber-crime and human error.


Power supply disruption is a top 4 business risk

The elevated risk is reflected in rising concern among businesses. Our 2019 research shows that energy resilience is now viewed as one of the top-four business risks (only narrowly beaten by financial, market and cyber-crime risks). 

Despite these fears, most businesses don't have adequate plans to deal with energy related failure. Almost 75% of 1,500 business leaders we interviewed admitted that they feel under-prepared to deal with the increasing threat of power supply disruption.

Power dependency and security risk is set to grow as businesses become increasingly digitalised and automated, which is a fact that's recognised by 87% of the most energy advanced businesses we interviewed. These energy leaders have robust resilience strategies in place, but are also the most sustainable and best prepared to maximise the competitive advantage of big data as part of their business growth strategies.

Read our report, 'Future-Proofing Your Company's Energy Needs' to discover the actions you can take to defend your organisation from energy supply interruption.

How to minimise energy supply risk

During the recent outage, those businesses with a well rehearsed emergency back-up plan and robust energy resilience strategy could rise above the panic of their competitors, so what sorts of actions are they taking to reduce risk?

Linking resilience into a long-term energy strategy will provide the ultimate protection, but some businesses prefer to take smaller practical steps to secure business continuity.

Deploying onsite generation technologies to reduce dependency on the power network is one such method. Solar or CHP can be combined with battery storage to provide a sustainable and cost-effective uninterrupted power supply (UPS) that can be activated instantly should the electrical system fail.

The best prepared businesses are also monitoring the energy performance of their critical equipment and processes to guard against energy outages. One of the most frequent causes of energy-related failure is ageing and poorly maintained equipment, but by attaching IoT enabled sensors to this equipment, businesses can gain full visibility of device-level energy performance. Advanced energy insight technologies can identify hidden problems, enabling faults to be remedied for improved equipment and energy reliability.


Four steps to energy resilience planning

While the above measures will provide effective fixes, we also advise businesses to develop an energy resilience plan by implementing the following four-step process.

1. Understand your site's risk potential

The first step is to understand your site's energy profile. Use energy insights technologies to audit your systems and processes to gain a real-time view that will highlight potential vulnerabilities. Our research also shows that businesses can unlock significant advantages from understanding their energy profile in more detail, both for resilience planning and ongoing performance.

2. Make sure any existing back-up systems work effectively

Some of the organisations affected by the latest UK power outage found that their emergency generators didn't perform as expected. Examine the capabilities, sizing and performance of your back up systems to ensure they can meet critical loads and supply automated, uninterrupted power in the event of any lapse in supply. Regular testing is critical.

3. Calculate the impact of power disruption

Protecting your entire site from electricity loss may seem desirable, but it's costly and often unnecessary. In fact, our 2017 Resilience Report highlighted that businesses consistently under-estimate the impact of power outages on their profitability. Work out which systems are critical and the potential impact of power interruption so that you can  prioritise your energy resilience plan and keep the essential systems, such as IT, energised no matter what.

4. Develop your resilience action plan

Use the data gathered in steps 1-3 to inform your action plan - taking into account critical loads, priority areas, and response speeds for back-up power solutions, which should be able to respond automatically. Consider the off-grid capabilities of existing distributed energy assets , such as combined heat and power (CHP).

Expert support from Centrica Business Solutions

Centrica Business Solutions works with many organisations across all sectors to create robust contingency plans that match your business needs and risk profile.  

We can design and implement resilient energy solutions, such as deploying  intelligent insight solutions to improve the reliability of your critical energy assets and  pinpoint vulnerabilities. Our sustainable on-site generation and battery storage solutions can also shield your site from the risk of mains power supply interruption and provide a valuable revenue stream from  energy flexibility markets.

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