According to a study recently done by AXA, experts think only 19% of the public sector are prepared to deal with energy risks, yet global risk experts consider energy to be a top five priority in 2022*. As reports of potential power cuts this winter have come through, businesses may be wondering how this will affect them.
According to Statista, in 2021 the average UK power outage lasted 31 minutes. While that doesn’t sound too long, it prevents your business from being productive during that time – no work can be done, no sales can be made, and unsaved work can be lost unexpectedly.
Being prepared for power outages can help ensure you can continue business as usual no matter what happens. Here, AXA looks at what you can do to keep your business safe in a power outage.
Why do power cuts happen?
Despite net zero emissions being the goal, it’s expected that there may be more energy demand than supply as it gets colder outside. National Grid's Electricity System Operator (ESO) has said that hopefully planned power cuts won’t be necessary this winter, however if there is a huge increase in energy demand that cannot be met, it is possible that there would be power cuts to reduce demand and avoid any damage to the power grid.
A Sky News story reports that in 2022 the gas needed to power UK's electricity grid was expected to rise by nearly 22% and that gas accounts for over 40% of UK power generation. If the wind turbines don’t generate enough energy, then that dependency on gas can rise.
If you’re looking for ways to cut down your energy usage as a business, check out the tips at the end of our article on the energy crisis and how it’s affecting small businesses.
Who loses power in a planned power cut?
There’s no hard and fast answer about who gets to keep the lights on during tough times, but if your area is going to lose power, the National Grid will issue a warning to the local and regional distributors and then those distribution network operators will decide who gets cut off. You should receive notice and have some time to plan for these types of events.
How to prepare your small business for power outages
With power cuts you’ll likely be given notice, but power can still go out for a number of other reasons including extreme weather events. So, having a plan in place for how to handle a power outage could be helpful for many reasons. One of the best ways to plan for the unexpected is to have a business continuity plan.
Business continuity planning refers to the systems and procedures that allow businesses to maintain or quickly resume functions in the event of a major disruption.
A business continuity plan should outline procedures and instructions for staff members in the event of a disaster. Even if you’re a sole trader and have no employees, having a continuity plan in place means that you’re not caught scrambling if something goes wrong and you can react calmly, knowing that you already have a path forward.
The plan should cover things like:
- Business processes
- What to do with equipment and/or stock
- Who is responsible for what
- Emergency contact details
- Back-up power arrangement
When thinking about power outages specifically, here’s a few things you may want to include:
How to work manual lock systems: If you have any smart locks, key cards or security systems at your business, make sure that people know where to find actual physical keys as well. While you may not use them in day to day running of the business, staff knowing where they are located means that no one is locked in and that a building won’t be left unlocked should people need to exit it. If you’re in a retail business, how to manually deal with any safes and registers will be of particular importance.
How to keep safety systems online: While a generator might be an expensive investment, some sort of backup power source can be helpful so that smoke alarms, security systems and exit signs still function. This may be more of a concern for retailers or businesses with an office vs those that have a work from home set up.
Where to find emergency numbers and supplies: Make sure that any emergency numbers and supplies such as a flashlights and a first aid kit are in a central and known area.
In addition to a comprehensive business continuity plan, training your employees in general workplace safety is always a good idea. Power outages can be an inconvenience at best, but can create dangerous situations at worst. Ensuring that there’s at least one person at the business who is a designated safety officer means that in case of emergency, there’s a specific leader to take charge of the situation.
This continuity planning and training will help in the event of any issue – planned or unplanned power outages, extreme weather, and more. While it can sound scary, it’s all about minimizing the potential for harm when things are not business as usual.
What to do if there's an energy power outages during business hours
If you know a power cut is coming, make sure that you’re regularly backing up your computer files to avoid any data loss, that you’ve let any clients/customers know of alternate ways to reach you or that you may be unavailable for a while, and ensure that your tech is all fully charged ahead of the start time.
If you have portable, external batteries you may also want to charge these up as a backup in case the outage lasts longer than anticipated.
If you are a business that can be flexible with your hours, consider planning around the power cut. Open for longer or different hours to make up for the time lost during power cuts to minimize disruption to your earnings or production timelines.
If you work with crafting or materials that need to remain cold, make sure you have some extra ice packs or coolers available to you and that you don’t open any fridges or freezers while the power is off, as that will allow cold air to escape.
Consider alternate lighting such as LED flashlights and batteries, or even a hand crank torch. Just have a risk assessment in your continuity plan that considers whether or not these options give you enough light to safely resume your work.
As an employer:
If you’ve got employees, you still have a duty of care to them in a power outage situation. If they’re office based, you still need to ensure their health and safety and maintain a good working environment.
If your employees are unable to carry out their job because their official place of work does not have power, you may still be obligated to pay them as usual – check the terms in their employment contract to see if there is a clause regarding this.
If you know a power cut is coming up that will affect your employees, consider sending out a reminder for everyone to have their laptop fully charged in advance of a cut and review your flexible working policies that may allow them to complete work outside of usual hours if needed.
If there are customers/clients with you:
Outages are, perhaps, the most complicated for those that have a physical premises as you are more likely to have employees and customers with you in the event of a power cut. That’s a lot of people to take care of in an unusual situation.
If you have a shopfront that regularly sees visitors, your continuity plan should consider what employees should do about customers who are in the shop when a power outage happens. If they were about to make a purchase, can they do this manually without a point of sales (PoS) system active? Make sure they know what information to write down so that you can cash up correctly at the end of the day and have a battery-powered calculator near the PoS system.
If it isn’t possible to manually do a sale, you could instruct employees take down a customer name and phone number and hold any items they were considering purchasing behind a register until the systems are back online.
Have employees escort customers to the exit using flashlights if needed to reduce the chances for accidents. Check any restrooms or changing rooms for customers and escort them out safely as well.
If you haven’t already, consider taking out a public liability insurance policy. This gives you extra protection if a member of the public is hurt in your store. If you have employees, you should already have employer’s liability insurance – not only because it’s legally required but because it protects you if employees are hurt on the job as well. No matter what measures you take to ensure safety during a power cut, accidents can happen, and you don’t want to be out of pocket if someone trips or slips in the dark.
Once all customers are dealt with, consider closing and locking the doors. If the power is out, there are additional safety hazards due to limited visibility and it also makes your shop a bigger target for shoplifting. Place a sign on the door explaining why the store is closed during your usual business hours and, if possible, when you expect to be open again.
If the power cut is expected to go on for many hours, consider sending staff home and ending their shifts early if no work can be done. Write down the hours they worked and when they left for reference later when your systems are all back online.
For more information on handling power cuts, read our PDFs:
*AXA Future Risks Report, 2022.
All links are checked and valid at time of publishing, 5 January 2023.
