The top three myths of energy resilience
Resilience is a hot topic in energy, but what’s really behind the need for resilience for businesses, and how can it be solved?
Resilience is a hot topic in energy, both for energy companies and the businesses that rely on them. Extreme weather events, such as Hurricanes Harvey, Maria and Irma over Texas, Puerto Rico and Florida, caused some of the largest electricity outages the US has ever seen. The federal energy regulator, FERC, has a major ongoing case, AD18-7, dedicated to judging whether system operators are doing enough to ensure their grids are sufficiently resilient.
Energy resilience is worthy of study and debate and also critical to business continuity. And there are some strong examples of how it has been done successfully. Here are three of the top myths we hear about what energy resilience means and how to solve it:
1. "The key is to keep fuel flowing to large, centralized power plants."
Large power plants are important. Around 50% of the US' electricity last year came from single plants that can deliver over 1,000MW of energy, or enough to power 650,000 homes. However, when the power goes out in a home or business, it's almost never because a specific power plant, or group of plants, lost access to fuel.
Last year a research firm, the Rhodium Group, studied this issue - what should we attribute customer power outages to? They found that over the five years ending in 2016, 3,400,000,000 (3.4 billion) customer-hours were lost to major power disruptions. Of those, 2,382 were due to power plants not getting access to their fuel.
So, 0.00007% of customer outages due to fuel supply emergencies. What about the other 99.99993%? It turns out that the key factor - 96% of the total - is severe weather knocking out transmission and distribution power lines. If the cable connecting your home or business to the grid is disconnected and you don't have a backup power source, then you're going to lose power - whether the power plant 150 miles away is generating electricity or not.
How can you ensure that your business operations are resilient when the grid goes down? Be prepared to power it yourself.
Here’s how we’ve seen this done:
In Connecticut, we worked with OR&L and Controlled Air, Inc to provide a microgrid for downtown Bridgeport buildings, including City Hall, a police station and a senior center. In regular operation it will deliver electricity, heating and cooling, and in an emergency, it can operate in ‘island’ mode, meaning it’s entirely self-reliant during a grid failure. Beyond resilient energy, the City will also see lower costs and substantially reduced greenhouse gas emissions.
2. "Only certain areas - like the Gulf coast and the Northeast - have to worry about energy resilience."
Extreme weather events have done great damage to certain regions of the US:
- 2017’s Hurricane Maria caused a major blackout which continues in part today, seven months later, and is likely the largest blackout (by customer-hours lost) that the US has even seen.
- Colleagues and friends at our sister company, Direct Energy, saw the tremendous force of Hurricane Harvey last year around Houston.
- Over 2012-16, Hurricane Sandy alone caused almost a third of the customer outages, with some of the worst damage in the New York-New Jersey area.
Those storms caused massive damage to life and property, and the impacts will be felt for years to come. However, energy resilience affects almost every business. When we surveyed over 300 businesses across the US last year, 92% noted that they've experienced energy-related failures in the last twelve months, with such responses coming from every state.
We might associate the typical causes of outages - wind, rain and snow - with certain areas, but just about every business will experience at least one. There are also causes beyond weather, such as accidents or deliberate attacks. Modern energy technologies offer resilience solutions to recover quickly, or never lose power, during almost all of these events.
3. "Resilience is such a large problem that only grid operators or distribution utilities can solve it."
Distribution utilities, and particularly their line crews, are critical to operating the grid and fixing it when outages happen. In some regions, independent system operators can dispatch or curtail generators and demand-side flexibility to minimize the impact of extreme events. Both utilities and grid operators are and will remain key to the energy system, but innovative technologies are allowing businesses to take much, if not all, of their energy resilience into their own hands.
In Florida a recent bill, HB7099, requires nursing homes and assisted living facilities to have backup generation on site by June 1, with the capability of keeping rooms cool for up to four days in case of an emergency. This was sparked by a nursing home tragedy during Hurricane Irma, and will go a long way to ensuring the safety of the state’s seniors. Other states and regions are seriously considering comparable bills – requiring critical facilities to take some of their energy resilience into their own hands.
No matter your business, being prepared for power outages is critical for your production and your customers’ satisfaction. Ensure you have a business resilience plan in place. And work with an experienced energy supplier to ensure it’s working and you can monetize your assets when they’re not supporting your business in an emergency.
Is your business prepared? Put your plan to the test with our resilience benchmarking tool.