Businesses taking risks with energy resilience

The UK’s medium-sized firms are taking huge risks when it comes to their energy supplies, with many lacking appropriate energy resilience strategies.

Such is the scale of the problem, that businesses are risking an average of £2.8 million of annual revenue, according to Centrica Business Solutions.

It equates to around 17% of revenue that could be lost from damages and lost opportunities, purely as a result of not having processes in place should energy supplies fail.

Of the senior decision makers questioned for the survey, those that had not experienced a blackout or temporary ‘brown out’ estimated the cost at 7% of their annual revenue.

In reality however, the figure was found to be nearly 10% higher, meaning the costs could potentially mount up to several million pounds.

Energy resilience relates to having a secure and reliable source of energy, as this substantially reduces the risk of insolvency, commercial loss and operational failure.

It is claimed having a resilience strategy has a big impact on financial performance too, potentially boosting it by as much as 34%.

Businesses recognise the need to have a resilience strategy too, with 88% of firms saying it is important, and 58% describing it as essential.

To further back up their point, more half of those surveyed said they expect their business to be faced with some sort of energy related failure in the coming 12 months.

However, just 16% of firms said they plan to make it a top priority and 18% have a formal strategy in place already.

Some 32% of firms have no form of energy resilience plan on place and are therefore deemed to be at risk should their supply fail.

According to Alan Barlow, UK Director for Centrica Business Solutions, “ignoring the risks can be damaging” as a business “can only be as successful as their energy supply allows”.

Given that eight in ten organisations have experienced an energy-related failure in the last year, having suitable contingency plans in place can be essential to protect against loss of finances.

Should a business be hit hard by a blackout and be faced with too much debt, a number of restructuring possibilities may exist to ensure the business can survive.


By Phil Smith


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