Counting the cost of a power outage

The UK electricity generation and distribution system is under pressure as it transforms into a new more flexible system for the 21st Century and beyond.

Energy storage as an Uninterruptible Power Supply

Historically the system has been designed and built around large centralised power stations (Coal, Gas, Nuclear powered) and a network of wires, transformers and switchgear, gradually branching and tapering towards the towns and cities where that power is required.

The problem is, this system is too inflexible for the demands it now faces:

  • Many of our current large power stations are due to retire over the next decade.
  • Demand for electricity is growing and that situation will only get more acute with the recent announcement that the sale of new diesel/petrol vehicles will be banned from 2040 so driving the growth of electric vehicles.
  • There is an increasing proportion of generation being provided by renewable energy technologies such as wind and solar (to reduce carbon dioxide emissions and meet our international commitments to combat climate change). This “distributed generation” from renewable energy technologies is both variable in output and has the potential to push power backwards through that tapered system which is not designed for that purpose.
  • Building more of the large centralised power stations, to then operate intermittently, with the necessary upgrades to the transmission and distribution system would be prohibitively expensive and a high-risk investment in the context of our competitive energy market.

Consequently, this transformation is making it increasingly difficult for those charged with managing the system to ensure there is sufficient generation capacity on the system, at the right times, and in the right places to match consumption and “keep the lights on” – all at an affordable price for the end user. Although solutions are developing, including transforming the system into a smart system where supply and demand is matched intelligently, there are both risks and opportunities along the way for energy users. Those risks and opportunities are greatest for large energy users dependent on a reliable supply.

So, what are the risks?
Quite simply the risk is fluctuations in power quality or loss of power altogether. This risk is increasing due to the challenges discussed above.  Depending on the nature of your operation, the consequences could be severe.

A report published in 2014 by the Royal Academy of Engineering titled ‘Counting the cost: the economic and social costs of electricity shortfalls in the UK’ (available here) states in its Executive summary:
“Industry representatives interviewed for this study expressed the view that energy security issues are climbing up the industry agenda in the UK, because of the increasing complexity of manufacturing processes, increasing interdependency between sectors and within supply chains, and a perceived decrease in security of supply. It is important to note that many industrial and commercial processes are increasingly reliant on a continuous, high-quality power supply, especially where just-in-time supply chains are used. Because of this, interruptions or voltage sags for even a couple of seconds could have an extremely detrimental impact upon operations…”

So, have you quantified the risk and potential cost for your business? Here’s some food for thought:

  • Would an unexpected power loss to your operation require a prolonged re-boot so the duration of power loss is effectively magnified?
  • Would product spoil when part-processed?
  • Would a power loss impact on your up-stream or down-stream supply chain?
  • How long would a power loss have to last before there’s a significant cost? With some processes, there can be a significant immediate cost.
  • Could you be liable to pay customers compensation for any loss of service you are contracted to provide?
  • Could you suffer damage to your reputation with your customers?

It may be that you have considered the risks/consequences and decided that the risk is tolerable because the consequences are small or the cost of a solution too high, but given the risk is increasing, you might want to take another look.

Risks and opportunities are greatest for large energy user’s dependent on a reliable supply

It may be that you do have a stand-by power solution such as a diesel generator. However, has this been maintained according to the manufacturer’s recommendations? Even if it has can you be absolutely 100% certain that it will start when needed? Given the changing attitudes to the pollution caused by diesel engines, is it compatible with your business’ environmental policy? Is it tying up capital with no clear return?

Battery storage systems may now offer you a better solution regardless of which of the above describes your business’ current position:

  • They can provide a return on investment as well as acting as a stand-by power system so not simply sunk capital or an operational overhead for lease costs.
  • Prices for batteries have reduced markedly in price over recent years, thanks in part to the rapid growth in electric vehicles.
  • They can be configured to constantly provide other services meaning they are “always on” and so only must switch over to provide full emergency power. There’s no ignition start-up which could fail.
  • Depending on the duration of stand-by power you need, they can either compliment traditional stand-by generators or replace them altogether.  

For an initial discussion to see how we can provide a commercially attractive solution for your business contact Rock Clean Energy.

NB - Discover how to get a free battery and installation with our Battery Energy Storage as a Service or BESaaS.

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