UK businesses without energy resilience risk 17 per cent of revenue

Centrica Business Solutions suggests companies risk £2.8 million annually

Businesses without an energy resilience strategy are risking 17 per cent of their revenue, equating to £2.8 million each year in damages and lost opportunities, according to Centrica Business Solutions.

In its Resilience Report, Centrica suggests companies which have not experienced “a serious energy failure” underestimate how much such an incident is likely to cost.

The company surveyed more than 300 organisations across the UK and Ireland and discovered that senior energy decision-makers predicted the cost to their business would be seven per cent of their annual revenue.

Centrica Business Solutions stressed the figure is likely to be much higher, estimating UK and Irish businesses impacted by blackouts or temporary ‘brown outs’ would risk 17 per cent of their revenue. It explained for a typical medium-sized business this works out to around £2.8 million per year.

Centrica said, “having a secure and reliable source of energy, helps companies reduce the risk of operational failures and reduce commercial risk.”

The report highlighted 88 per cent of businesses think energy resilience is important, while 58 per cent said it is becoming “critical” for businesses to be energy resilient.

At the same time, 52 per cent of respondents think they will experience energy related failure in the next year.

Despite this, just 16 per cent of companies are making energy resilience a top priority, while only 18 per cent of businesses have a formal energy resilience strategy. A further 32 per cent of businesses have no form of energy resilience strategy in place at all.

Alan Barlow, UK director of Centrica Business Solutions, said: “It’s clear that businesses see the importance of energy resilience, both to ensure a reliable energy supply, and to prepare for changes in the energy landscape.

“How to create a strategy to do that, however, is less clear. What we know is that ignoring the risks can be very damaging. Without an energy resilience strategy, organisations can only be as successful as their energy supply allows.”

He added: “There are reputational and financial benefits to an energy resilience strategy so it’s important that organisations make the right investments and take steps towards implementing a strategy.

“Back-up power systems provide protection against power outages, and batteries can provide energy in less than a second, mitigating the risks of temporary brown outs.”

The report also revealed that eight out of ten organisations have experienced at least one energy-related failure in the past year, of which almost one in four experienced equipment damage as a result.

It suggests one third of organisations are unprepared for temporary grid failure.