Standby Power System Determined by Economic Risk Assessment

Aug. 19, 2011

Critical Power helps companies attain the right equipment to protect assets during emergency

Identifying the correct backup generator systems for a power outage used to be about meeting the minimal requirements. A technical evaluation was given to ensure there would be enough backup power for lighting, elevator usage, and alarm system activation during an emergency. The primary concern was for federal, state, and local electrical codes.

But as businesses have come to rely more and more on a continuous supply of electric power, the decision has expanded to take account for how much will a utility outage cost a company in terms of lost production, products, revenue, data, and customer dissatisfaction? What will these losses cost by the hour?

These questions have changed how a company considers to prepare for a power outage and increases the amount they are willing to invest in a standby or on-site power generating system to reduce the risk if these losses to nearly zero.

As companies no longer look to just meet minimal requirements provided by the federal or state laws, but rather engage in their own individual criteria, a new business-model has emerged. Normal continuation of business is deemed necessary in this new business-model assessment. Businesses must evaluate how much will be lost in revenue if they lost experience power failure for a day, an hour, or even a minute. Research performed by contingency planning organizations show that the cost of an electrical outage can exceed $1 million per hour for the average large business. In specific industries such as semiconductor manufacturing, energy production and telecommunications, losses may reach $2-3 million per hour or higher. Given these high-stake risks, facilities managers worldwide are being forced to evaluate new options for providing a continuous supply of power. Major outages during 2003 in the Northeast U.S., London, Scandinavia and Italy served to focus more attention on the devastating business impact that extended power outages can have. What’s more, while extended power outages are rare – at least in North America – our 24/7 dependence on electric power virtually necessitates that every business with critical applications have some level of standby power.

Based on a company’s exposure to financial risk in the event of a utility outage, the need for standby power can be divided into four categories. As the risk of financial loss due to an outage escalates, so does the justification for standby power systems that meet more than just minimum safety or electrical code needs.

  • Category 1: No standby power generator required.
  • Category 2: Need minimal backup power for life-safety, security, computer systems.
  • Category 3: Need substantial standby power to maintain all production or business operations during outages of short duration.
  • Category 4: Need near-total standby power to maintain all factory or business operations for extended periods of time.

Once an individual company’s risks have been assessed and the degree of standby power protection required has been determined, an initial sizing estimate of the standby power generating system can begin. The first step in sizing a standby power system is to establish project parameters.

Some institutions (such as data centers, co-location facilities, 911 call centers, hospitals and military) require highly sophisticated uninterruptible power systems, generators, transfer switches, and other high-voltage electrical systems. Other institutions (such as Manufacturing, Retail, Food Storage and business call centers) do not require such all-comprehensive equipment.

Critical Power offers evaluations for companies to determine economic risk-assessment, identifies the appropriate power source, oversees the delivery of the equipment and turn key solutions to the removal and asset recovery of the old units. They are with you from start to finish for all of your businesses back up power system needs.

Corporate Headquarters
Critical Power Exchange, LLC.
3808 N. Sullivan Rd, Building 29A
Spokane Valley, WA 99216

Toll Free
(877) 315-4176
(509) 228-0178
Fax (509) 228-0378

Sales Department
[email protected]

General Information
[email protected]


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