Report: UK firms risk £2.8m a year through lack of energy resilience
New research has found that British businesses could be risking 17% of their annual revenue by failing to adopt an energy resilience strategy.
This equates to £2.8m each year in damages and lost opportunity for the typical British medium-sized business, according to findings from Centrica Business Solutions. The Resilience study is based on a survey of more than 300 businesses across the UK and Ireland which delivers insight into the state of energy resilience.
While 88% of respondents said that it was important for their business to be energy resilient, and 52% predicted they will experience energy-related failure in the next year, less than one-fifth (18%) said they have a formal energy resilience strategy in place.
“It’s clear that businesses see the importance of energy resilience, both to ensure a reliable energy supply, and to prepare for changes in the energy landscape,” Centrica Business Solutions UK director Alan Barlow said.
“How to create a strategy to do that, however, is less clear. What we know is that ignoring the risks can be very damaging. Without an energy resilience strategy, organisations can only be as successful as their energy supply allows.”
The report notes that energy resilience – having a secure and reliable source of energy – helps firms to reduce both commercial risk and of operational failures. The benefits of having a resilience strategy are tangible, according to the study, which claims that businesses are 13% more likely to have a good brand reputation and 34% more likely to have strong financial performance.
Barlow continued: “There are reputational and financial benefits to an energy resilience strategy so it’s important that organisations make the right investments and take steps towards implementing a strategy. Back-up power systems provide protection against power outages, and batteries can provide energy in less than a second, mitigating the risks of temporary brown outs.”
The study revealed that 80% of businesses have experienced at least one energy-related failure in the past 12 months, of which almost one-quarter experienced equipment damage consequently. But despite this, one-third of companies remain unprepared for temporary grid failure, research found.
Energy resilience explained
While historically the UK is used to stable electricity supplies and relatively stable energy prices, resilience is moving up the agenda as the energy landscape undergoes a radical transformation from large centralised coal plants to an increasingly renewable and smaller-scale gas-fired world.
The growth of renewables and the challenges that brings to the grid in terms of intermittency also means that transmission and distribution costs are set to take up an increasing proportion of bills. Ensuring your business is energy resilient and therefore insulated from any price increases or fluctuations in supply is therefore critical to maintaining operations.
Earlier this month, edie released its latest Explains guide, which delivers insight into all things energy resilience: from ensuring business continuity and mitigating the risks of black or brown outs, to protecting your business from energy price rises. Read the guide here.