Ofgem’s Winter Outlook 2014-15 report says the likely margin of supply over demand is now just 4.1%, or 2.3GW. This is based on average winter conditions, so an extreme cold spell could push the supply network to its limits and possibly lead to outages.
It has been almost 40 years since Britain last experienced serious and sustained power outages and the “three-day week” entered national mythology. Since then, 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.
While the majority of power failures would last only a few hours, there is the potential for some to be of a longer duration – shutting down production at companies and critical infrastructure such as telecommunication networks and financial services as a consequence.
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 small and medium-sized enterprises.
Many organisations may feel that power outages are beyond their control, but there are a number of actions businesses can take to mitigate this risk.
The most fundamental is to identify which services are so critical to a company’s core operations that even a short outage could be dangerous or risk causing catastrophic damage to finances or reputations. These may not be obvious, 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 is down, even for a short time?
Having prioritised these key services, you can undertake a risk analysis identifying the strategy to manage the risk – this can include reduction, avoidance, transfer or retaining the risk.
Once you understand the potential risk and the consequences should it become a reality, a strategy can be developed including analysing the return on the investment for the implementation of the strategy compared with the potential loss caused by the power outage.
Consideration should 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 are not knocked out, even for seconds or minutes? Is 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 employees know what to do if disaster strikes? Is working from home an option, and do staff have the facilities they need to accomplish this?
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 it can keep on smiling through the darkness.
Colin Pearson is head of building performance team at BSRIA