There is a growing concern that large sections of the U.S. and other countries will be at greater risk of blackouts or periods of electricity shortages due to a number of factors. This can have grave consequences on the economic growth of many companies. Uneven electricity production and delivery is common in developing countries which have problems with both power plants plus the infrastructure to deliver reliable power to people and industry. Much has been written about countries in Africa, Asia, and South America which are investing in economic growth, but cannot achieve it because of unreliable power. As a result, there is either dangerous (explosions, fires) power supply or limited growth, as investors demand surety in utilities. But even North America and Europe are beginning to show increased risk of disruptions, too. These issues, called “fuel poverty”, have gotten the attention of major governments and power companies.

Increased risk of unreliable energy supply has been influenced by affordability, security, and sustainability issues. Many areas have seen a sharp increase in electricity demand in recent years and the capital cost to upgrade infrastructure to produce and deliver the additional power is very large. In some cases, necessary upgrades are not affordable without large rate increases or government assistance, two areas that politicians prefer to avoid. Many utilities recognize that offering incentives to be more energy efficient is cheaper than implementing full infrastructure upgrades, but will take longer and is a gamble of whether this will be sufficient to reduce the needed investments sufficiently. Thus, more people and business will be at risk of “fuel poverty” in the future.

This is also a long-term issue. While the recent recession tamped down energy demand, it is beginning to rebound. Several think tanks predict a worldwide doubling of energy demand between recent years and the 2030’s, something that cannot be met in terms of development and delivery without R&D and implementation of renewable energy, as fossil fuel availability is limiting, due to political and practical considerations.

What can your company do to reduce your risk of unreliable energy supply?

1. Preparation. Your company and facility should routinely develop an energy plan. How much and what types of energy does your company need to function? How much might it grow in the future? Where do you get your energy from? Are there other, more reliable sources? Looking forward, what energy sources may be more reliable for you in the future, such as renewable or certain sources plentiful near where your operations are? I was involved a few years ago with a confidential client that wanted to build new facilities in Asia, and I performed an evaluation of the energy sources around that region, and determined that wood is expected to be plentiful in the area, but fossil fuels not. Therefore, new boilers and cogen needed to be able to operate as well combusting wood as it does oil and gas, as wood should be plentiful in the next 20 years, but fossil fuels which has to be shipped in to region, may become more expensive in the future.

2. Invest in smart technology that will provide both information on energy use and paths to energy efficiency. Smart metering provides the opportunity for you obtain useful data on your energy usage and demand, which can provide you a truer picture of your costs, risks, and future. Knowledge of usage provides you with ideas to reduce your usage in the most cost-effective manner.

3. Renewables/clean energy is the long-term path to go. Depending on power from fossil fuels will be at risk in the future due to its finite nature, the more difficult it is to find and refine fossil fuels (raising its cost), and the political situation. Even in a positive scenario, fossil fuel costs will go up and down with conditions, and make planning harder. As renewable energy becomes more established and efficient, prices are coming down for installation, and the source of power is plentiful and free. Utilities in the US are being forced to generate more power from renewables; but they are realizing the advantages of these technologies.

CCES has the experts to help you establish short-term and long-term energy planning to increase your efficiency, reduce costs, and reduce risks of unreliable supply and delivery. Contact us today at 914-584-6720 or at karell@CCESworld.com.