Whether your business was caught up in Friday’s power outage or not, it will no doubt have increased your concerns surrounding the security of your energy supply. Fortunately, there are technologies available that can help to mitigate the impact of an unexpected power cut. However, the option that works best for your business will vary depending on the size, budget and nature of your organisation.
Am I entitled to compensation?
For many businesses that experienced disruption last week, one question will be can you claim compensation and, if so, how do you go about it? Despite media reports suggesting you may be able to claim compensation for the disruption, the likely reality is that it won’t be an option. Ofgem regulations allow for non-domestic customers to claim compensation from £150 for a power cut that lasts longer than 12 hours. When more than 5,000 properties are affected, this extends to 24 hours. With National Grid having resumed normal distribution after just 46 minutes, despite the disruption, any compensation will probably not be forthcoming.
Should I invest in back up generators?
Many businesses faced with the possibility of disruptions to their energy supply will be considering whether to invest in standby generating capacity. There is no correct answer and for many organisations generators are a necessity, given that they simply cannot risk experiencing disruption to their energy supply.
However, the benefits of having back up power available immediately should be carefully weighed against a number of other factors. The primary drawback of standby generation is simply cost, particularly when compared with the return on investment. Despite this incident, significant disruption has been rare in more recent years, meaning it may be unlikely your investment will ever prove cost-effective.
However, as the rapid increase in renewable capacity raises the risk of further blackouts as it reduces the amount of flexible generation available, this may well change.
Many standby generator options also potentially increase the carbon footprint of your business, with most still reliant on diesel for power.
However, cleaner options are increasingly available and the ability to prevent disruptions and keep key equipment, such as refrigerators, operating theatres or servers powered during blackouts, may well be persuasive, depending on the nature of your business.
What else can I do?
Rather than investing in generators that may well be used infrequently, if not at all, an alternative strategy is to consider battery storage, potentially supported by on-site generation options, such as solar PV. Such projects allow the investor to charge the batteries using either surplus renewable energy or off-peak grid electricity and this electricity can be used on the site whenever electricity prices are highest, or when the grid is disconnected. This may be an attractive solution for businesses that experience short-term grid outages, but there is a risk that the batteries may not have enough charge to keep the lights on for extended outages like we saw on the 9th August.
For intensive energy users, the increased risk of disruption can actually deliver an opportunity to secure additional revenue. Demand side response allows for spikes in demand and potential blackouts or brownouts to be avoided by cutting the amount that energy intensive users draw from the grid by offering them financial incentives to reduce demand. The potential to generate income for large organisations can be attractive and there is generally no upfront investment in infrastructure or technology required. Looking ahead, demand side response will play an increasingly important role as the UK continues to integrate more renewable generation into our overall energy mix.