The true cost to your business of a power outage

So, what does a power outage cost businesses?

Whilst it would be simple to ‘pin’ a generic cost of what a power outage means to large national companies (and there’s lots of shocking figures to be found on the internet), not every business can relate their own circumstances to that of a high profile blue-chip company. To make things easier, there are essentially five components to calculating the cost of a power outage.

1 – Wages (lost hours)

2 – Direct revenue

3 – Repairs and other related overheads

4 – Liabilities

5 – Reputation

To help understand the impact, here’s a fictitious company:

ABC Data Centres employs 30 full time members of staff. It is a 24/7 business and has around £5m p/a of customer value across its network. A power outage strikes and the UPS/back up generators fail, meaning the company loses all network capability. An engineer is called out and has the power back on in just over 3 hours.

1 – Lost Hours
Find the average hourly rate of your workforce and multiply by 3 (ABC Data Centres £83 per hour x 30, then x 3 = £7,470)

2 – Direct Revenue
Known to you, of course, take your yearly revenue and work out an hourly figure (in this case x3) to get a better understanding of the impact on your revenue. With £5m p/a, find the cost per hour. (ABC Data Centres £1,715)

not every business can relate their own circumstances to that of a high profile blue-chip company reported in the media

3 – Repairs
How long is a piece of string? Maybe you’ve had experience of repair costs and you can factor that in, but it’s not too complicated to make an educated estimation of what you’d be likely to pay. We’ve assumed a reasonable figure of £10,000 for our fictional company.

4 – Liabilities
Here we look at guarantees of service (SLA) and other legal liabilities you may have. Some companies may have a fine imposed for such events.  It’s always best to talk to your legal team to ascertain if there are any possible penalties. In the case of our Data Centre company, we picked up a fine of £400 from the regulators.

5 – Customer Confidence
Not a cost that can be easily added in pounds – in fact it’s most possibly priceless.  A tarnished reputation can even see the big players stumble, fall and go out of business. But let’s not focus on the high dramatics of these media events; customer confidence is a crucial element to get right and a power outage isn’t the best way to prove your business’s capabilities.

Total
 We’ve taken a simplistic view of this for ease of reading, but in total the outage cost our fictional company was a modest £19,585 and attracted a tranche of bad press on the internet forums. So, was it really worth almost £20k for 3 hours -simply because the generator/UPS wasn’t tested properly?  We would certainly encourage you to do your own calculations and see what a power outage would cost you.

We said you can help prevent this!
Let us show you how:

Adopting a regular load bank maintenance programme will allow you to prove the reliability of your back up generators/UPS system, minimising the risk of a costly power outage. Crestchic has been providing load bank packages to every industry around the globe for the last 30 years and is proficient in adding real load to a system to test for any weakness or failures.

What happens to your Generators and UPS’: 

Over time, lightly loaded generator sets develop wet-stacking and carbon build-up in the combustion chambers and exhaust system.

The use of a load bank helps prevent this and determines the generator’s capability to produce maximum output in terms of amperage and horsepower.

The impacts of low load running potentially include:

• Increased lube oil consumption

• Poor engine performance

• Increased fuel consumption

• Crankcase pressurization

For engine only exercising and general engine maintenance a resistive only load bank is ideal for clearing carbon build-up in the engine, it is the most common and cost effective option for preventative maintenance.

To test the engine and alternator typically at 0.8 power factor a resistive/reactive load bank can simulate a building load, it should be used if the generator is being paralleled with a utility but can also be used for preventative maintenance. Whilst a more costly option it gives a more accurate indication of the overall generators health and performance.

Benefits to load bank testing 

• Peace of mind – will the generator work when needed

• Regular load testing can increase the life and reliability of a generator

• Proves performance of the generator (resistive/reactive required for 0.8pf)

• Aids commissioning of generators for utility paralleling applications (resistive/reactive)

• Safe replication of emergency situations for new systems

• Demonstrate engine output for overhauled engines

Contact us using the form below or call Crestchic on +44 (0) 1283 531 645 for assistance or a quote.

About Crestchic
For in excess of 30 years we have been designing and manufacturing load banks that provide accurate, reliable electrical test loads for land based and marine applications, this is further complimented by a range of packaged transformers.  From our headquarters in the UK we manufacture, sell and hire our load banks globally.

Address

Crestchic Ltd
2nd Avenue,
Centrum 100
Burton-on-Trent.
DE14 2WF
United Kingdom

Phone

T: +44 (0)1283 531 645