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Power Disruption Risks Costing Manufacturers More Than They Expect

Following a lengthy period of disruption caused by the COVID-19 pandemic and ongoing uncertainty following the UK’s departure from the EU, many British businesses are focusing on a sustained period of effective recovery. For manufacturers, maintaining productivity is a key priority.

However, the UK is also facing a surge in demand for electricity, driven by the growth of electric vehicles as well as greater digitisation within workplaces. As strain on distribution networks increases, power disruption events risk hampering or completely derailing your operations and productivity.

The Impact of Power Disruption

National Grid have already warned that their ‘aging’ energy infrastructure needs a rapid and comprehensive system of upgrades to mitigate the risk of future blackouts.

While National Grid have been warning about the risk of disruption for over a year, the generation picture for this coming winter looks particularly tight. A number of coal and nuclear stations are set to be offline, while demand for electricity steadily increases as the UK economy continues to emerge from COVID-19 restrictions. In July National Grid warned that overall demand could exceed available supply by around 5.3%. This represents the tightest margin since winter 2015-16, when National Grid were forced to use ‘last resort’ emergency powers including requesting that companies reduced their demand.

The specific impact of a power outage varies depending on duration, time of day and industry, as well as what resilience measures a company already has in place. A study by Imperial College London following a major blackout in 2019 found that the currently accepted ‘Value of Lost Load’ to be dramatically lower than reality. While historically power cuts have been rare enough that there is limited data to work with, the study found a weighted average of £16,940 of lost productivity per MWh of disrupted power. Historic estimates range from anywhere between £10,000/MWh and £70,000/MWh.

Building Better Power Resilience

While the previous figures are averages, the cost of an individual outage could be much higher for businesses in particularly energy-sensitive industries, such as manufacturing. For high-value or high-speed manufacturing sites, combined costs including lost productivity, wasted product and damaged equipment can quickly see costs spiral. One American study put the cost of unplanned outages in manufacturing at up to $260,000 an hour. 

Many industries particularly sensitive to power outages already have power resilience measures in place, most commonly in the form of UPS batteries. Often, these are supplemented by diesel generators to provide power in the case that a power disruption lasts more than a few minutes. While this is effective in terms of keeping key equipment operating or allowing time to safely shut down, they both come with notable drawbacks.

In the case of UPS, they generally only provide emergency power to key equipment. This means that the rest of your site infrastructure remains vulnerable to disruption. As digitisation means that equipment and infrastructure are increasingly interlinked, your site could still suffer severe disruption even if critical equipment is provided with emergency power.

For both UPS and backup generators, both technologies are likely to deliver a net increase in your overall carbon footprint. While this may be less of a pressing concern than the need for resilience, it is still pertinent for a wide range of businesses. This includes manufacturing and industry that are bound by Climate Change Agreements to make quantifiable steps towards net-zero, as well as a growing number of organisations that require clear sustainability efforts to maintain relations with customers, partners and other stakeholders.

A BESS system can provide the instantaneous emergency power of a UPS, while also protecting your entire site from disruption. Implemented as part of a smart microgrid alongside on-site generation and power regulation technology, a BESS can also allow your site to operate in island mode, independently from the grid, indefinitely, rather than relying on fossil fuel generators.