The energy market is navigating through a time of real change driven by digitalization, decentralization and decarbonization. As a result, businesses need to start addressing some of the challenges associated with critical issues of reliable energy supply, day-to-day energy management and cost.
The energy market is undergoing a time of substantial change as the impact of transformative and disruptive technologies influences energy generation, storage and management.
The growth of renewables, the advancements seen in battery storage, electric vehicles, micro grids and distributed generation, coupled with the availability of innovative digital technology solutions, are helping to reshape the energy landscape for industrial energy consumers.
Security of energy supply remains the key focus for a business’s day-to-day operations and the issue of energy resilience is central to this debate.
Assessing the true cost of downtime within a business due to a loss of power is difficult to pin point but not getting your product or service to the customer is the bottom line. For a retailer with a multi-site operation, losing a single outlet due to a local issue is inconvenient, but minor compared to a major production site where loss of manufacturing for a period could cost significant sums, as well as lead to reputational damage.
Quantifying the risk of potential power loss is, again, a difficult problem for many and depends on individual business operations. For example, large data centres and manufacturing sites are far more likely to have a back-up energy supply in case of power loss, while it will probably not be the case within a retail outlet such as a supermarket, where the investment case struggles to be made.
Fortunately, we live in a society with a reliable national grid, but that does not mean business don’t need to plan.
Planning is key
Key to this is ensuring energy resilience is understood within companies; much in the same way energy efficiency is now commonly appreciated by many.
Incidents are not just limited to a national grid failure; issues from straightforward human error, ageing internal infrastructure and equipment failure to freak weather, can all affect business operations.
Of course, cost pressures within organisations will also play their role. When it comes to releasing funds to underpin investment in an energy resilience strategy it must be balanced against investing in new machinery, or taking on more staff. This is why it is important those holding the purse strings understand the added benefit energy resilience can deliver to their organisation.
Some organisations base CAPEX arguments on both the certainty of supply when grid power fails and the potential for revenue raising by trading excess power generation back to the grid. This sounds good in theory, but in reality is proving to be a hard sell internally.
With businesses primarily led by people with a financial and not technology background, unless the investment and ROI argument stacks up, short-termism will win out and little progress made.
Conversely, those with an interest in driving an energy resilience agenda within an organisation are thought not to be interested in the revenue generation aspect. Until these worlds can find common ground it is likely, the status quo will prevail.
However, the reality for many is that their infrastructures are not set up for the kind of collaborative and integrated thinking required to match resilience and revenue raising potential. The question is – what wider cost implication does downtime have on the organisation; increased backlog, employee stress, loss of custom?
One radical thought is that to overcome this short-term thinking, industry needs another oil crisis to shock the current system out of complacency. It would help reboot current thinking so energy supply and resilience is no longer taken for granted, but, instead underpin the arguments for a longer-term approach and investment just like any other part of a company’s infrastructure.
The growing influence of digitalization could have a profound impact in this area. The ability to extract, store and interrogate significant data streams from electrical systems offers the opportunity to make informed decisions around system performance, future asset reliability and predictive maintenance ambitions to help offset resilience concerns. It would also help visualise a complex system to those unfamiliar with it.
However, the need to demonstrate a track record in this area is vital to help persuade stakeholders to make the necessary investment in digital technologies of this sort. Technology vendors need to establish credible evidence-based case studies to assist digital advocates within organisations make the case to finance departments, while also underlining the data security measures surrounding the digital revolution.
Clearly, there is work to be done to educate industry more broadly around the importance and associated risks connected to energy resilience, especially in the minds of budget holders.
While downtime isn’t considered to be a major problem now, this could change as increasing pressures are put on the grid and its legacy infrastructure. Likewise, organisations will need to be mindful of the growth of electric vehicles and may need to provide charging points for their employees, as well as for their own vehicle fleet.
Maybe this is the jolt needed to kick-start planning their resilience strategy and considering alternative methods of generation, storage and management on a more localised basis.
The operational and strategic insight delivered by digitalisation and the range of data-driven digital tools now available, provides organisations with the means to drastically improve the daily performance of their energy infrastructure, and helps to build a compelling investment case to ensure they have the required planned resilience for a stable and secure energy future.
As disruptive technologies shape Industry 4.0 can you afford to be left behind?
Dan Saxton is Energy Management Lead for Industry Strategy & Business Development at Siemens.