How much does a power disruption cost your facility?

4 min read
Alpha Struxure Logo blue

By Jen Kugler & Paul Molta

4 min read

Whether you are prepared for them or not, power interruptions can cost your business more than you think. Not all power disruption costs are evident right away, and better cost-awareness helps justify preventive measures. So, let’s get into some power-disruption sources, cost impacts, and a way to help avoid them.  

Understanding diverse sources of power disruption 

Weather events including storms, lightning strikes, and high winds are the leading causes of outages, and this unpredictability can seriously impact power-grid reliability, both short- and long-term. Other factors like aging infrastructure, equipment failure, and cyberthreats make it complicated to protect the grid today. Now, add today’s increasingly electricity-intensive technologies and drive to electrification to the mix. From electric vehicles (EVs) to air conditioners, we are looking at the kind of grid strain that can cause overload, resulting in even more power outages. 

But aside from total power outages and interruptions, disruptions to your energy systems can occur in several other ways. These disruptions are not usually as noticeable as full outages, and they include: 

  • Momentary power interruptions from temporary faults in electrical distribution (from less than a second to a few seconds) 
  • Inconsistencies in voltage, known as sags, surges, or swells of power 
  • A persistent low power factor (a given system’s energy efficiency) 

Power-quality and grid-distribution issues like these can cause equipment shutdown, decreased performance, data loss, and processing problems at your facility. They can also reduce the efficiency and longevity of electrical assets over time, resulting in additional utility charges and facility infrastructure costs. 

The cost implications of power disruption 

There are many cost repercussions for facility power disruptions. Some costs are transparent to facility managers; others may turn up later. Total power outages are typically the most obvious and costly power disruptions as they often bring operations to a standstill. The longer an outage lasts the greater the ripple effects will be — of lost time, lower productivity, and impacted revenue.  

For instance, when data centers suffer downtime from outages, it can cost businesses an average of $9,000 per minute 1. In high-risk industries — like healthcare, manufacturing, and transportation — outages disrupting data centers can lead to some $5 million per hour.1 Larger industrial facilities with multiple megawatts (MW) of demand say a momentary interruption of even less than five minutes can cost at least $50,000.2  

Another example is the cement industry. Cement manufacturing sites experience outage costs differently during that downtime. A short-duration outage, in minutes to a few hours, may cost around $30,000 due to the thermal mass of the kiln and other equipment used to produce cement. But if the outage is extended and equipment cools, the cost skyrockets to the hundreds of thousands of dollars and carries a significant recovery period to clean hardened material, restart the process, and account for a finished product that was not sold. Here, a multi-hour shutdown can easily turn into a multi-day headache to get back to normal operations.3  

Poor power quality is often an imperceptible issue in the moment, but can damage machinery and energy equipment, forcing businesses to replace equipment far earlier than anticipated, straining operational and capital budgets. Power sags and surges can also add to equipment damage, cause equipment to reset, or simply cause failure. 

Production losses are a simple way for many industrial customers to determine outage costs. However, that may not capture the full picture, and there exist other types of facilities that do not produce a tangible or quantifiable product. How might power disruptions be translated into an opportunity cost? 

  • Customer service and satisfaction 
  • Salary losses and employee morale 
  • Insurance costs 
  • Equipment damage and spoilage 
  • Public opinion and marketing power 

These categories are a bit more qualitative but can have a real impact on the bottom line. How does the perception of unreliable power decrease customer revenue? How do outages impact inventory management or the delivery of goods throughout the supply chain? How might insurance costs react to missed contractual deliveries of goods? How much time is lost re-starting technology and recovering lost data? How does future electrification of vehicles and other systems impact the ability to provide service to customers? These questions can be translated into costs that drive solutions. 

Avoiding power outages and their costs  

Microgrids are one of the best solutions to on-site power disruptions. Microgrids are local energy systems with sources of power generation, storage, and advanced controls that directly integrate with the customer’s electrical system. They function with the utility grid, or more important, independently from it when needed.  

This means that when the grid experiences any sort of interruption, microgrid assets can pick up the site’s energy load to keep it all in operation without a hitch. This allows microgrids to deliver resilience and reliability through a power-supply experience that is not possible with grid-reliance alone. Microgrids can also improve the quality of the power at a site, avoiding damaging surges and frequency issues. This means that microgrids can help businesses enhance the reliability of their existing grid connection, mitigating a diversity of power-quality issues and costly surprises. 

Since microgrids can operate autonomously and in parallel to the grid, they are a strong defense against unseen outage costs. Local, on-site generation is more efficient, avoiding transmission and distribution losses. Last, the relevance of microgrids grows in the era of decarbonization, providing low/zero emission power, and reducing local and global emissions.  

Want our help in figuring out how much outages and downtime cost your business? Email us at: 

  1. Atlassian, Calculating the Cost of Downtime, 2022 
  1. S&C, S&C 2021 State of Commercial & Industrial Power Reliability Report, 2021 
  1. Sullivan, Schellenber, Blundell, Updated Value of Service Reliability Estimates for Electric Utility Customers in the United States, 2015 

Explore more on Microgrids

Deploying microgrids is a key resilience objective for the DoD. Existing EUL and PPA procurement authorities for microgrids can be combined into an Energy as a Service procurement model. The EaaS model draws from the EUL’s authority to execute land leases for the siting of energy infrastructure (microgrids) on DoD installations. It also draws from the PPA’s authority that enables a energy developer to contract with a DoD agency by selling energy in exchange for its services in financing, designing, building, owning, operating, and maintaining energy infrastructure. 
General ASX Microgrid Rendering
bus depot microgrid tour
Are you a transit agency applying for the Low-No NOFO? Did you include charging and energy infrastructure in your application? Since FTA guidelines allow partnerships, including a proven energy and sustainability partner like AlphaStruxure can help your zero-emissions project stand right out.Oh. And you can bypass the RFP process while you’re at it. Learn how you can gain a competitive advantage for your Lo-No application and see how we can applying match funds to help you achieve your ambitious decarbonization goals. 

About the Author

Alpha Struxure Logo blue

Jen Kugler & Paul Molta

Solution Architects

Jen Kugler

Jen Kugler is a Senior Solutions Architect for AlphaStruxure.  As a Solutions Architect, Jen designs behind the meter generation solutions for clients that meet their economic, sustainability, and resilience goals. These are complex solutions to optimize with many variables and constraints including hourly energy demands, GHG emissions, and energy outage costs.  Jen has extensive experience with this optimization modeling, having built several integrated energy models for a variety of clients.

Jen has over 20 years of energy industry experience.  Prior to her time at Alphastruxure, Jen was a Senior Energy Engineer with Burns Engineering working on the energy team to complete a variety of energy design projects from multi-megawatt solar arrays to campus CHP projects.  Prior to Burns, Jen was also a Senior Energy Engineer for PowerSecure for 7 years, during her time at PowerSecure she completed several conceptual microgrid designs as well as combined heat and power, central plant, heat pump, and energy efficiency projects.  Jen started her career in utilities at ExxonMobil at the largest chemical/refinery site in North America.

Jen is a registered Professional Engineer in New York and Massachusetts.  She also holds a Certified Energy Manager Certificate from AEE (Association of Energy Engineers) and a LEED AP designation from the USGBC (United States Green Building Council).   Jen is a graduate of Rensselaer Polytechnic Institute, where she earned a BS in Chemical Engineering, Summa Cum Laude.

Paul Molta

Paul is a Solution Architect at AlphaStruxure where he works develop holistic technical solutions that meet the client’s energy needs as well as project timeline expectations, development expenses and overall economics for long-term EaaS opportunities.

Prior to AlphaStruxure, Paul was an Associate Project Development Engineer, Energy Storage and Microgrids at Ameresco. As part of the Federal Solutions team, he worked on designing and implementing energy storage and micro-grids, primarily as part of comprehensive energy-savings performance contracts (ESPCs).

Paul graduated with a Masters of Environmental Management from the Yale School of Forestry & Environmental Studies in 2017, where he concentrated in renewable energy development and transportation. Prior to attending Yale, Paul worked as an electrical engineer, mostly in Colorado. While at the National Renewable Energy Laboratory (NREL), he worked in the Commercial Buildings team on technology to eliminate parasitic energy consumption of miscellaneous electrical loads, as well as with the Field Testing team at the National Wind Technology Center testing utility-scale wind turbines. He also interned with the Rocky Mountain Institute where he contributed to the Electricity Distribution Evaluator (EDGE) model in order to quantify the value-added of distributed PV from a utility perspective.

Paul graduated from the University of Rochester with a B.S. and M.S. in Electrical and Computer Engineering specializing in Very-Large-Scale Integration and Wireless Sensor Networks, respectively.

Close this search box.

Segment Expertise

No two energy transformation journeys are the same. Achieving unique business goals means creating and implementing a tailored action plan specific to your industry and individual targets.

energy service in mining

Helping energy-intensive facilities and supply chains to decarbonize rapidly and expand capacity, without waiting for the grid to catch up

Accelerating decarbonization and the electrified transportation transition for medium to heavy-duty fleets and other transit services

Achieving meaningful climate goals across mining, cement, metals, and glass, among others

Stabilizing long-term energy costs while achieving resilient, zero-carbon energy across pharma, biotech, medical devices, and hospitals

Generating fewer greenhouse gas emissions in the face of a growing global food demand in the snacks, dairy, meat, and beverage industries, and beyond

Creating positive and sustainable visitor experiences by reducing greenhouse gas emissions across energy-intensive entertainment facilities

Innovation in energy and sustainability is rapidly evolving. Stay ahead of the curve with insights from experts, influencers and peers.