Energy Resilience: The Solution For Surviving Power Outages
While it seems counter-intuitive, the list of things you can count on seems to be growing these days. There’s death and taxes of course, but now there’s also extreme weather events and frequent power outages.
The annual number of billion-dollar disasters over the past three years was more than double the long-term average. Consider this: The U.S. was impacted by 14 separate billion-dollar disastrous weather events in 2018 including 2 tropical cyclones, 8 severe storms, 2 winter storms, drought, and wildfires. (In response to recent seasonal wildfires, PG&E is implementing power shut-offs that will 800,000+ California residents.) What's the solution for surviving these power outages? Energy Resilience.
What does that mean for your business?
Climate change and extreme weather events are already affecting energy consumption and supply. Current climate projections suggest that, in addition to extreme weather events, hot days will become hotter and heat waves will last longer, increasing demand for energy. Increased demand will affect the grid, increasing the frequency of blackouts and brownouts.
Commercial and industrial businesses are particularly vulnerable to power outages. Losses due to interrupted productivity, damaged inventory and lost sales, are rarely recoverable. A new study conducted by Centrica Business Solutions, reveals that:
- 49% of businesses surveyed have experience unscheduled downtown as a result of an energy-related failure
- 35% suffered equipment damage
- 24% lost inventory
- 20% stated that employees were put into dangerous or life-threatening situations
S & C’s 2018 Blackout Report demonstrates the impact power outages can have. For example:
- 85% of commercial and industrial business surveyed in the U.S. have experienced a productivity loss in the past year due to power outages
- 21% of companies suffer power outages once a month or more
- 21% have taken a financial loss of $100,000 or more
- 26% have experienced power outages of one hour or more, and 41% have experienced outages lasting between 5 to 59 minutes.
- And, as a result of this, 53% of companies are not fully satisfied with their current power reliability
The question is no longer if outages will occur, it’s a matter of what companies can do to minimize or eliminate the impact.
Until recently, most resilience efforts were stop-gap measures–driven by short payback requirements and limited options. Diesel generators served as the go-to resource for onsite backup power for decades. There are an estimated 250 gigawatts of backup generator power in the U.S., with diesel generators making up 70% to 80% of that power. Unfortunately, diesel emissions contribute to the development of cancer, cardiovascular and respiratory health effects, air pollution, and global climate change. And, they can be unreliable if they’re not properly maintained. (For example, 50% of the generators failed during superstorm Sandy. Two major hospitals had to be evacuated and thousands of residents were stranded in buildings with no electricity to power heating systems, elevators or refrigerate food and medicines.) Consider also that during a sustained grid outage, diesel supplies and fuel can run out.
Clearly, a more long-term solution is required.
While energy resilience is one of the hottest energy-related topics discussed today among private and public sectors worldwide, some misconceptions remain.
Energy resilience is about ensuring a business has a reliable, regular supply of energy and contingency measures in place in the event of a power failure.” An effective energy resilience strategy begins with the understanding that power outages can and will occur, and details the tactics required to minimize their impact, restore service quickly, and improve performance in the future.
Until recently, only critical environments like hospitals or data centers invested in resilience infrastructure – primarily because of strict regulations or strict service level agreements. The majority of commercial and industrial facilities only invested in a backup generator to power emergency lighting and critical loads. Increased demand for uninterrupted production, combined with innovations and cost improvements in distributed energy resources, has future-focused companies searching for more effective resilience systems.
Since energy resilience needs vary wildly, it’s impossible to suggest one specific solution is better than another. Nevertheless, there are a few approaches that can be considered universal.
Right-sizing your company’s energy consumption through bankable energy conservation measures is the logical and economic first step to becoming more energy resilient. Here's why:
- An investment in energy efficiency reduces the amount of backup power required to keep a company operational during an outage. For example, a 50% improvement in building energy efficiency will reduce the size of that building’s backup power system by half.
- Energy-efficient systems have lower life-cycle costs than inefficient systems.
- In addition to optimizing resiliency efforts, boosting energy efficiency achieves a number of other common business objectives, such as reducing operational and maintenance costs, and improving sustainability.
Next, Produce and Store
With technology costs declining and extended power outages becoming increasingly common, more and more businesses and building owners are embracing solar PV + storage to avoid outage-related losses.
Unlike most generators, PV and battery energy storage systems can operate in grid-connected mode, providing value throughout the year through utility bill savings. Additional revenue can be generated by participating in utility programs such as net metering and Demand Response.
Since solar + storage systems are used regularly, they can be counted on to be operational when needed during an emergency if sized accordingly. Additionally, while generators require constant fuel supply to continue functioning, PV and battery energy storage can deliver power for an extended period, as long as there is sufficient sunshine to continue charging the batteries.
Energy storage systems connect to the building’s existing electrical and save excess energy for later use, making it more reliable and predictable.
Not too long ago, companies accepted high energy costs and production losses due to power outages as simply the cost of doing business. Now, forward-thinking organizations are leveraging energy as a strategic asset. They realize that integrated energy resilience systems will protect operations, profitability, and reputations. And when not in use for resiliency, these assets can help to lower energy costs or generate revenue. Manufacturers won’t suffer unexpected production shutdowns, grocery stores can keep produce fresh and frozen, cities can maintain emergency services, schools won't be forced to close, and service stations can continue to pump gas.
Learn more about best practices and Future-Proofing your business.