In California, we are all too familiar with the devastation wildfires can cause. The loss of life and property is heartbreaking, additionally, there are other risks that often go overlooked: power outages. A wildfire or the chance of a wildfire, can cause power outages that can last for days or even weeks. This can result in a huge inconvenience through significant and dangerous impacts on our personal lives and business operations. In this blog post, we will discuss the risks of power outages from wildfires for businesses and what you can do to prepare for them.
Many of us believe coming off the back of summer, we are past the risk of wildfire season, but we would be mistaken. The risks are increasing and the season is only just getting going.
In California, power shutoffs are a result of power infrastructure being directly impacted by wildfires or preventative measures taken by utilities in high fire-risk conditions. This choice is not made lightly, as it can greatly impact business operations, but is considered essential by utilities to protect aging infrastructure that is becoming increasingly vulnerable to damages and leading to the origination of wildfires, resulting in energy consumer impacts and for the likes of PG&E bankruptcy and litigation.
When power shutoffs are initiated, it can leave those affected without access to electricity for an extended period of time. For businesses of all shapes and sizes the impacts can range from safety concerns, shutdowns to loss of product, and production and in turn a loss of revenue. According to the U.S. Department of Energy, it is estimated that the annual cost of power outages for US businesses is >$150B. This does not include the resulting escalation is energy rates to repair and harden infrastructure. In CA we have some of the highest rates in the country and the world and such escalations will not stop as the grid needs to be maintained at scale.
So, what can you do to prepare for a power outage caused by a wildfire?
- Decide whether you can run your business without power — and what it would it take.
- Make sure you’re getting alerts. For starters, update your email address with your power company and leverage the available websites and apps to stay up to date.
- Let your customers, partners and employees know what to expect. Customers will want to know if you’re open, and social media is a great way to get in front of their questions. Employees will need to know when and how they’re working. Train them about what to do if they’re working when the power goes out. Have a strategy in place and practice it like you would other drills.
- Create an outage kit. Gather what you’ll need to keep your employees and customers safe if the power goes out. Water, first-aid kits, portable chargers and battery-powered fans/blankets (depending on the season) are all good ideas.
- Make a plan for perishables and living things. Will you have a way to keep food and other perishable inventory cold? Do you need to water crops? How about keeping livestock heated/cooled and watered?
- Have an alternative energy strategy – see below.
- Know how to turn your business back “on.” Once it’s safe to restore power, have your maintenance team available to get your systems up and running again.
Alternative Energy Strategies
First, I would like to dispel a common expectation – “I have solar, so if there is a grid power outage I will be fine as I generate my own energy.” Almost all solar systems installed at residences and businesses across the US and in CA are grid-tied. Grid-tied solar systems work as follows – sunlight hits the panels, generates electricity, passes through the inverter, and is used to power your business. When your panels are producing more electricity than you’re using, the extra electricity is pushed onto the electric grid.
If the electric grid is down and your solar solution is pushing extra electricity onto the grid, that creates problems – Utility workers are working on those same power lines fixing the issue to get the area back up and running. They are doing this with the assumption that the lines are dead. In order to protect the utility workers and the grid itself, all grid-tied solar energy inverters are required to automatically shut down when the grid goes down and the power goes off. So, when the grid goes down, so does your solar, unless it is isolated from the gird or combined with storage technology.
So what can you do?
- Understand the value of energy resilience to your business. Most energy solutions today, often solar only, are installed without considering the technical and economic impacts to a business of a power outage. Particularly for facilities that take a long time to come back online after an outage or risk losing products (food, medical supplies etc) the costs can be very significant. Due to the power outages in Texas in 2021, Samsung reported losing $270M in their earnings call.
- Assess and design a solution that will meet your business’s operational needs and objectives and has the ability to ride through a chosen outage period, which can be specified in terms of hours to weeks. The resulting solutions will be quite different. Per the above, solar alone will not do it. Solar will likely be a component of the system but it will need to be combined with battery energy storage and/or a generator (gas or diesel). The size and technology will be determined based on the specific objectives and each comes with its pros and cons.
- Leverage a competitive marketplace to cut through the complexity and source the optimal solution for your needs and then ensure it performs as planned.
- Take advantage of the new IRA and the many incentives available to cost-effectively deploy the best solution for your needs.
The technologies and incentives exist today for your business to confidently plan for and survive through any power outage, including the ever-increasing wildfire risk outages facing the Western States and CA in particular. Such systems often have a very quick payback and will provide many additional benefits (reduces/stabilized costs, emission reductions and resilience) to your business for the next 10-20 years. But only when assessed, designed, procured and monitored correctly.
Take control of your energy future for more profitable and sustainable business outcomes.