Recent research carried out by Centrica found that more than four in five UK businesses had experienced at least one power failure in the past year, opening up the potential for serious consequences on productivity. Clean Energy News spoke to Tim Wynn-Jones, head of distributed energy sales in the UK for Centrica, to understand why UK businesses need an energy resilience strategy moving forward.
What are some of trends in energy resilience that Centrica uncovered by surveying UK businesses?
The concerning trends from the research are three-fold really. Firstly, we found UK businesses are underestimating the cost of an energy failure to their business; secondly, while many businesses expect an energy failure not that many are actually preparing for it; and finally, businesses think that energy resilience is important but there's a disconnect between opinion and action.
So if some businesses aren't preparing for energy failures, why do you think that might be?
I think in general terms there's been a lot more reasons for interruptions to business operations, and that's what we really mean by energy resilience. It's the ability for continuous operation of your business. Generally speaking we've seen a lot more extreme weather patterns, intermittent problems with grid supply such as outages or periods of power interruption that are having quite severe impacts on business operations. There's also just ageing or faulty equipment. All of those things together mean there can be periods where there are completely unpredictable interruptions to businesses.
Some of the threats like extreme weather and matters of cyber security only set to become more likely in the future, so how real a prospect is it that these energy failures are more common?
There a number of global trends here. Global warming is certainly causing more frequent, more destructive and less predictable natural disasters. And it's important to consider not just where these disasters occur, but also there wider implications. That can include the volatility they can cause in the energy markets where supply sources and transmission systems are disrupted. This can have global impacts on energy availability and price as well, crucially.
I think these factors can contribute a lot to energy failures as well. Historically in the UK we've had very stable electricity supplies and resilience is moving up the agenda for a lot of organisations because the energy landscape is undergoing such a radical transformation from large, centralised power stations to increasingly renewable and small-scale generation that is a lot more intermittent by its nature.
As a result, as more renewables come online, the security of supply can be reduced, particularly when the sun doesn't shine and the wind doesn't blow. There's a much more dynamic and real-time balancing issue between demand and supply.
What do businesses need to be aware of when it comes to energy resilience?
Energy resilience really means having a secure and reliable source of energy, and I think what businesses really need to be aware of is how a resilience strategy, and having that in place, can give the benefits of not only improving risk management in your risk position in terms of being able to continuously operate despite a number of challenges, but also the benefits it can have for reputation and strong financial performance as well.
Obviously, it's very important to consider any consequential loss of downtime. For example, in manufacturing if an organisation's production lines are interrupted that could lead to loss of revenue because of an inability to meet certain timescales or ditching of stock, which can have very profound implications for organisations.
What are some of the first steps companies can do to increase their resilience?
Being energy resilient firstly involves identifying and assessing the risks of power interruption, and then building in resilience where possible. There's a number of ways in doing this, one is by reducing reliance on grid-imported energy by generating your own power on-site, and putting a plan in place should the worst happen. But really the first step is knowing the building and knowing your facility. That could be through a detailed engineering study or a real-time view of what energy your consuming across your operations.
Is that perhaps complicated by the prominence of rental properties over UK businesses owning them outright?
I don't think so, I think - obviously if you're looking to generate your own power on site and it's under lease it's important to consider landlord consent to add any measures - but also to consider the likelihood of any changes to tenancies. So if your business was to relocate from that site, then obviously it's important to consider any measure you install versus its payback.
However it is important to stress that a lot of measures are relatively inexpensive. As an example, you can get very real-time visibility of energy usage on sites through wireless powerless sensors that you can clip on at distribution board level to outgoing cables. They measure in real time what energy you're using across the site. Typically finding one intervention you could make in terms of energy efficiency or operational efficiency could pay for that solution in a short period of time.
Setting out that strategy is the first step, but when it comes to installing some of these measures how expensive can they be?
The cost of energy resilience can vary hugely depending on the size of the business and its operations and what systems it wants to protect. We would certainly say that the cost of those measures should always be considered against the cost to the business if they did have an energy interruption. For smaller businesses it might be a case of uninterruptible power supply connected to the server, but for larger businesses it might be the case of looking at larger battery storage or combined heat and power, and then looking at possibilities of functioning independently of the grid.
Is Centrica seeing much movement in the adoption of battery storage by corporate consumers?
Yes, absolutely. It's obviously a very topical issue in the energy market at the moment and behind the meter battery storage can be a very effective solution for large energy users, both to improve on-site resilience and also to achieve behind the meter savings through displacing grid-imported energy during peak periods. It can also achieve revenues from demand side response or trading of energy at certain times of day.