“Earlier on today, apparently a woman phoned the BBC and said she heard there was a hurricane on the way… well, if you’re watching don’t worry, there isn’t”. An infamous quote from BBC weatherman Michael Fish which has entered into British Folklore, as that night a hurricane did arrive leaving a trail of destruction in its wake.
In a recent e-mail to BSRIA, a Government official said “the chances of involuntary power outages are low since risks to security of electricity supply are being managed by Government”. If Michael Fish taught us anything it is that confidence, however well-intentioned can be misplaced.It’s been almost 40 years since Britain last experienced serious and sustained power outages, and the “3 day week” entered national mythology. Since then the British business model has changed almost beyond recognition, but electrical power has become even more central to the way we do things, making it hard to believe that there would be a return to the bad old days.
Which is why news that the UK’s national safety margin for electricity supply has fallen to a nail-biting 2% has rightly created shock waves in the business world, especially as businesses are likely to bear the brunt of any outages.
Whilst the majority of power failures would last only a few hours, there is the potential for some to be of a longer duration with the consequence of shutting down production at companies and critical infrastructure such as telecommunication networks or financial services. How many businesses have considered the impact of this on the different areas of their business from production capacity, cash flow, protection of information and even security as increasingly commercial premises operate sophisticated security systems?
An area which can often be overlooked is the impact on your business of a supplier suffering from power outage, if your supplier is unable to provide components or services the consequence to your business is the same as if you directly suffered the power outage.
Analysis from the US has shown that there is a real cost in power outages where even a relatively short outage of 30 minutes can lead to a loss in excess of $15,000 for medium and large organisations. A large organisation may operate from multiple sites reducing the overall impact on their business, but the impact maybe disproportionately higher for SME’s, as these organisations are unlikely to have skilled resource to undertake a risk assessment and develop a contingency plan.
While many organisations may feel that the power outages are beyond their control, there are a number of activities that businesses can do to mitigate this risk, most of which should be considered good practice anyway.
The most fundamental activity is to identify which services are so critical to their core operations that even a short outage could be dangerous, or risk causing catastrophic damage to finances or reputation. These may not be the obvious ones and may not even be on your premises. For example, if you trade mainly through your website and it is hosted on a third party server, can you cope if it’s down, even for a short time?
Having prioritised the key services you can undertake a risk analysis identifying the strategy to manage the risk, can include reduction, avoidance, transfer or retaining the risk. Once you have an understanding of the potential risk and the consequence of the risk should it become a reality, a strategy can be developed including analysing the return on the investment for the implementation of the strategy to the potential loss caused by the power outage.
Should consideration be given to the need for full scale backup generators that will keep your operations going for several hours? Is a UPS essential to ensure that your key services aren’t knocked out even for seconds or minutes? Is CHP (Combined Heat and Power) a viable option for your company, in which case you could gain security and potentially even export electricity to the grid?
Any contingency plan should include the human element. Would the staff know what to do if disaster strikes? Is working from home a practical option and do they have the facilities they need for this?
One man’s problem is another man’s...
Against the uncertainty of a major business problem there is born an opportunity, the risk of blackouts has the potential to create business opportunities. Demand both for UPS solutions and diesel powered backup generators is likely to rise. These need to be managed, using reliable and appropriate software to ensure that they “kick in” and operate effectively. Companies will be under more pressure to control their energy usage, which should heighten interest in Building Energy Management software.
Suppliers of CHP solutions can offer the potential to escape the effects of power outages, and cutting their energy bills, while also reducing their carbon footprint. If the demands are not high enough to warrant a private CHP system, a group of companies can come together to use their own district energy system, supplying both heat and power, and even potentially cooling (even in the UK an outage could strike during a hot summer). A further benefit is that heat networks can be used to store energy, in the form of heat that can be used hours, or even months after it is produced.
It will probably only take one major outage for the current concern to become a widespread panic. Every company should be looking at its contingency plan now and making sure that it can keep on smiling through the darkness.
Colin Pearson also lecturers on a number of the BSRIA courses including the new Introduction to Electrical Power Quality course, for more information please contact Colin on email@example.com.