This article is sponsored by Enel North America.
During the most extreme weather months of the year, energy resilience moves to the top of the priority list for many organizations wondering if they can handle another record-breaking hurricane or heat wave. And while most might be laser-focused on a strategy to withstand local power outages, the rapidly changing energy landscape requires a broader approach to resilience.
In a future-proofed energy strategy, resilience goes beyond the traditional definition of operational continuity. It should also support resilience to price volatility, shifting demands from regulations and stakeholders and growing electricity usage in the U.S., which Net-Zero America reports is on pace to more than double by 2050.
And as major federal investments flow into American energy infrastructure and climate solutions through policies such as the Inflation Reduction Act and the Infrastructure Investment and Jobs Act, businesses have an even greater opportunity to build an enduring energy strategy — including operational, economic and regulatory resilience.
Operational resilience: weathering grid disruptions
The U.S. Energy Information Administration reported that, on average, U.S. electricity customers experienced just over three hours of electric power interruptions in 2013. By 2021, that number had risen to over seven hours per customer, five of which stemmed from major weather events. And considering the notable increase in those weather events over time, securing operational resilience to remain online during power outages is an urgent need.
Businesses with an operational resilience plan can stay online despite grid disruptions and continue energy-reliant processes. By installing energy resilience solutions — including backup generators, battery backup or microgrids — an organization can avoid lost revenue due to delays, downtime, unproductive labor and scrap.
The workflows and locations of a business will determine the amount of critical load — the energy that must always be available — required during an outage and the variety of solutions that can help. For example, power management company Eaton integrated microgrids into its Arecibo and Las Piedras manufacturing facilities in Puerto Rico — a high-risk hurricane area. Together consisting of 10 megawatts of solar energy and 2.23 megawatts of battery storage, the microgrids enable Eaton to balance electricity consumption during a power outage and generate, store and consume renewable energy through its solar-plus-storage systems.
By preparing for the unexpected, microgrids improve operational resilience and exemplify how to keep the power on — no matter what.
Economic resilience: stabilizing energy prices amid volatility
While operational continuity is critical to your resilience plan, your energy strategy should also be resilient to economic uncertainty and price volatility. Global markets, geopolitical conflict and supply chain shortages all impact U.S. energy prices, and businesses have felt the impact.
Demand tariff rates for electricity usage have spiked in the last decade for large energy users in some parts of the country, including California. In a recent analysis by Enel North America, since 2008, PG&E’s E-20/B-20 demand charges in California increased 66 percent after adjusting for inflation, while energy tariff rates stayed relatively constant.
Businesses across sectors need to prioritize strategies that better shield them from price hikes. One way to mitigate energy cost volatility is to enter into long-term financial contracts such as power purchase agreements. This allows organizations of all sizes to cover large portions of their future energy use with affordable and renewable energy, limiting financial risk and improving operational sustainability.
Regulatory resilience: meeting stakeholder demands
Regulations and demands around climate action are changing fast, giving rise to the third type of resilience needed for a future-proof energy strategy. In 2022, for instance, the Securities and Exchange Commission proposed new environmental, social and governance disclosures that would ramp up climate-related reporting requirements. Additionally, organizations are under increasing stakeholder pressure to boost sustainability efforts and reduce carbon emissions.
Stakeholder demands are impacting a wide range of industries. There is a growing expectation for manufacturers to have a plan to power operations with clean energy. For colleges and universities, sustainability goals are top of mind for faculty and students, impacting enrollment and funding. And for local governments, constituents are demanding that their communities work towards a cleaner energy footprint, prompting many regions and towns to explore clean energy mandates.
Businesses and institutions need to start preparing now with responsible carbon-cutting solutions to ensure they’re resilient to any regulatory changes or opportunities on the horizon.
Achieving operational, economic and regulatory resilience
Because organizations have varying priorities and will have different factors to consider, building a comprehensive energy resilience strategy won’t always look the same. But you can take the first step toward understanding your resilience needs by answering questions such as: "Do power outages cause us significant losses? Do we have a controllable energy load? For how long do we typically need backup power?" After that, consulting with an energy partner for a more custom and nuanced evaluation is helpful.
So, while operational continuity might be top of mind as we enter a season of extreme weather, organizations need to take a step back and take a critical eye to their energy resilience holistically. Truly resilient businesses will be able to quickly adapt to the changing energy landscape while staying online during grid disruptions, keeping energy costs consistent and meeting stakeholder sustainability expectations.