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Blackouts – interruptions to the power supply that can last anywhere from a split second to several hours – can be immensely disruptive to businesses and significantly impact the broader economy. Recent data shows that the average cost of a single hour of downtime exceeds US$300,000 for more than 90 per cent of mid-size and large companies. Additionally, four in 10 large enterprises report hourly downtime costs ranging from US$1 million to over US$5 million.
Factors including the increasing demand for energy, physical and cyber-attacks on infrastructure, and, most notably, extreme weather events mean the frequency of blackouts continues to grow. In the US alone, power outages have risen by 64 per cent over the past 15 years. It’s crucial, therefore, for organisations to adopt a continuity of service strategy, and take proactive steps to minimise risks to their business and the economy as a whole. First, though, it’s important to understand some of the reasons behind these outages.
Why outages occur
Power outages can occur for several reasons. One key factor is ageing infrastructure, which, coupled with insufficient maintenance, creates a system prone to failures, especially during increased demand or external stressors. Electrical grids comprise multiple components that degrade over time due to wear, exposure to weather, and general ageing, leading to failures like broken wires or faulty transformers, which may trigger blackouts. One component’s failure can trigger a cascading effect, resulting in large-scale blackouts.
Regular maintenance, combined with the ability to securely access, manage, and control IT infrastructure, is crucial for preventing these failures; however, inadequate funding often leads to deferred maintenance. Issues can go undetected, heightening the risk of sudden, widespread blackouts.
Additionally, attacks on electrical infrastructure have surged. The International Energy Agency warned in a November 2023 report that the average number of cyber-attacks against utilities worldwide more than doubled between 2020 and 2022, potentially taking power supplies offline, while physical attacks rose by 70 per cent during the same period.
Most outages, though, are caused by extreme weather events. Strong winds can knock down trees and damage transmission lines, and flooding from heavy rain and snow can impact substations and other infrastructure. The frequency of these events is increasing, with twice as many incidents reported between 2014 and 2023 compared to the previous decade.
Growing demand for power
The global energy crisis exacerbates these risks, as rising demand outpaces supply due to factors such as geopolitical events and economic recovery after periods of slowdown. Maintaining a balance between supply and demand is vital for grid stability; a sudden increase in consumption can exceed the available supply. This imbalance can lead to voltage drops and frequency fluctuations, which may trigger protective systems to shut down portions of the grid, ultimately resulting in blackouts.
Peak energy demands also place immense stress on electrical grids, raising the risk of blackouts. Grids are designed for specific demand levels, and exceeding this capacity can cause equipment failures. The widespread adoption of Generative AI has recently driven increased demand, primarily due to the substantial computational power required to train and run AI models. AI, especially in deep learning and Generative AI, relies on complex algorithms that need massive amounts of data and processing power, resulting in heightened demand for high-performance hardware like GPUs and specialised AI chips, which consume substantial energy.
Additionally, AI workloads are mainly processed in energy-intensive data centres, requiring computing resources and cooling. The growing adoption of AI is leading to expanding existing data centres and constructing new ones. Yet, while efforts to develop more energy-efficient AI hardware and software are underway, the rapid evolution of AI technology often outpaces these advancements.
With the rise of AI, in addition to challenges like ageing infrastructure, increasing cyber-attacks, extreme weather events, and an energy crisis, it’s perhaps unsurprising that blackouts are on the rise. What, then, is the impact of these outages?
The impacts of outages
One of the most immediate effects of a power outage is the disruption it causes to businesses. After all, without electricity, most companies can’t continue operations, leading to lost productivity and revenue. Manufacturing plants may have to halt production lines, resulting in delayed orders and dissatisfied customers. Restaurants and retail stores that rely on electricity for refrigeration and cash register systems may lose perishable goods or face difficulties processing transactions.
Power outages can create significant issues for servers and data centres, where even a momentary interruption can result in data loss and service interruptions. Computers and network devices are also at risk, leading to wasted hours of work and compromised data integrity. Additionally, power outages can disrupt online businesses that depend on internet connectivity for sales or customer support. Given the crucial role of e-commerce today, even a brief power disruption can lead to substantial financial losses.
The economic impact of power outages extends beyond these immediate disruptions and can affect entire communities. Areas frequently experiencing power outages may deter investments due to the risk of operational disruptions. This lack of investment can slow job creation and impede economic development. An unreliable electricity supply can discourage new businesses from setting up in a particular area or force existing ones to relocate, leading to job losses and reduced tax revenue for local governments. Therefore, companies must invest in reliable power quality equipment to mitigate the effects of blackouts on their operations and the communities in which they’re based.
Developments in power quality solutions
The increasing frequency of power outages and their impact on businesses and the broader economy highlight the importance of investing in effective power quality solutions. Fortunately, advancements in this field have significantly improved the efficiency and functionality of these systems in recent years.
For instance, integrating IoT technology now allows for real-time monitoring and control of power quality. This capability enables proactive maintenance and quick responses to power disturbances, minimising downtime and reducing associated costs. For instance, Out-of-Band management gives system administrators access to network infrastructure without using an IP connection, ensuring they can still perform basic administration tasks like rebooting a router even when the network is down due to an outage. IoT-enabled power quality equipment also provides valuable analytics that helps organisations optimise their energy usage and enhance their overall power management.
Another recent development is the implementation of smart grids designed to improve the reliability and efficiency of electricity distribution. These smart grids incorporate advanced power quality equipment that can dynamically respond to power demand and supply changes. Their ability to identify and isolate faults, reroute power when needed, and balance loads helps ensure a stable and high-quality power supply.
Time to act
Whether due to ageing infrastructure, rising demand for power, or extreme weather, the number of blackouts continues to grow. As a result, businesses face escalating costs associated with these outages, impacting their finances, productivity, and reputation.
Today, organisations cannot afford to leave their electrical equipment - and the operations and processes that depend on it – vulnerable to the risk of downtime caused by outages. It’s increasingly important for organisations to invest in effective power quality solutions, along with a robust Out-of-Band management strategy, to enhance access and control of their IT infrastructure, whether it’s located in a data centre or at the network edge. By implementing these measures, organisations will be better positioned to proactively minimise the impact of blackouts on their business operations and the broader economy.
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