Chapter I
Background of the Study
In reach with this paper, it centres the power interruptions cause to distinctive business establishments worldwide. This article analytically investigates the times when back up electricity is most needed and becomes very important. It can keep the clocks running, so we aren’t late for work. We can have breakfast before we leave the house. It’s important to keep schedule and backup electricity can do just that. As long as the electricity is available, no one thinks much about it. Whether it’s during the day or at night, electricity keeps our lives in order. It affects your business, your schedule and even your entertainment. Electricity runs everything in our everyday lives. Gas stations can’t pump gas without it. Businesses have to close because their cash registers won’t work without it. Restaurants can’t cook food without it. Our lives almost come to a standstill without electricity. Everything in our world today depends on having the power to keep them running. In our house, everything we need and enjoy is plugged into a wall socket and requires electricity. Therefore, backup electricity has become a necessity and is no longer a luxury. It’s really inconvenient when the electricity is shut off at night and it’s too early to go to bed and sleep through it. You are usually in the middle of something when it happens and frustrating to wait for the power to be restored. This has all changed with the invention of the power inverter. No one has to sit in the dark and angrily wait for the power to be restored any longer. By attaching a power inverter to a 12-volt battery, you can continue what you were doing and keep in touch with the rest of the world that still has power. Getting electricity presents findings on the kinds of constraints entrepreneurs around the world face in getting access to electricity and illustrates patterns in connection processes. The study tracks all the procedures, the time, and the cost required for a business to obtain an electricity connection for a newly constructed building. It highlights economies where this process is efficient and others where it could be made simpler and more efficient. The study provides information on a number of issues for which data previously did not exist for such a large number of countries. These include the efficiency and cost of the services provided to commercial customers by distribution utilities, the complexity of procedures, and the resources expended by businesses in obtaining a connection. In difficult economic circumstances, businesses are constantly looking for ways to make savings and keep profits up. Reducing certain overheads, such as electricity costs, are of huge importance and as always technology plays a vital role. This will give the business a better idea of exactly what they’re spending on electricity, whether it is reasonable and if there is another energy provider providing cheaper rates. Generally, a power outage can be identified as a power cut, power failure or blackout. This can be addressed as loss of electricity power to a specific area. Nevertheless, there are different causes of power failure in electricity which can easily cause damages to human and business operations. Lack of electricity supply is one of major infrastructure problem affecting the business sector. Power interruption is a debilitating problem that needs to be addressed. The envisioned growth of the economy cannot be achieved without improved electricity supplies. Power interruptions can occur at any time, without warning. With risks such as decreased profitability, productivity and customer satisfaction, businesses and consumers cannot afford to risk leaving their electronics unprotected.

Statement of the Problem * What are the effects of power interruptions in the services of various business establishments? * How would these power interruptions affect the services of these business establishments to their customers? * What are the remedies in the various establishments employ during brownouts?
Significance of the Study * Business establishments: they are prevalently concern in the resolution of the power outages cause by a lack of power source. * Customers: they are affected in consuming or buying products concerning the said establishments. * Electric cooperatives: they will be determined to find more power source to accommodate the urgent dilemma of most business establishments.
Scope and Delimitation
Scope
The coverage of this study is the primary damage caused by power outages in the various business establishments. The study dwells the main effects of power interruptions in the daily performances and services of most business sectors.

Delimitation
The study does not only cover on the frequent power interruptions which cause mere inconvenience in the business establishments, it also delves how power interruptions affect the services of the various business establishments globally.

Chapter II
Research Literature
Many companies are unprepared for business disruptions caused by power blackouts, and are often unaware of the true costs and impact that they can have on their operations.
While the majority of power failures from national grids last only a few hours, some can last days or even weeks, completely shutting down production at companies and critical infrastructures such as telecommunication networks, financial services, water supplies and hospitals.
Furthermore, it is likely that power blackouts will become more frequent owing to the lack of incentives to invest in aged national grid infrastructures in Europe and the US, as well as the fact that energy from decentralized, “volatile” renewable sources is not well aligned to work on electricity grids that were designed 50 or 60 years ago. Also, as more and more grids are interconnected, a blackout in one region can trigger a domino effect that could result in supra-regional blackouts. Heightened risk from terrorism, cyber attacks and solar flares also highlights how vulnerable the world’s energy grids are to systemic failure. Research shows that the financial impacts of even a small power cut can be catastrophic. Analyses from blackout events in the US show that a 30-minute power cut results in an average loss of US$15,709 for medium and large industrial clients, and nearly US$94,000 for an eight-hour interruption. Even short blackouts – which occur several times a year in the US – add up to an annual estimated economic loss of between US$104 and US$164 billion.

Power outage risks frequent in emerging markets
Larry Hunter, Risk Engineer at Allianz Global Corporate & Specialty (AGCS) in Houston, says that “while organizations may feel that the likelihood of power outages is beyond their control, they should still assess the impact that an electrical blackout could have on their operations and important machinery, so that they can review and determine whether they have the right controls in place to help mitigate the risk.”
The most frequent brownouts (reduction in the volt age) and blackouts occur in emerging economies which have typically underinvested in their energy infrastructures, and which are also prone to serious weather and natural hazards. For example, Latin America has one of the lowest number of power outages, but they last the longest on average. South Asia, on the other hand, has the highest number of power outages per year, although they usually last only a few hours, the effects are sharply felt. For example, a 12-hour power cut in India in 2001 cut off electricity to 226 million people, caused chaos on the rail system and paralyzed major utilities and hospitals.
Some countries are trying to address the immediate failings in their national grids by asking consumers to use less electricity. Following a series of power blackouts in September 2011 due to a heat wave, South Korea’s government unveiled a set of measures aimed at alleviating pressure on the national grid, including a 10 percent demand cut for large manufacturers and caps on maximum temperatures for commercial buildings and on the use of neon signs.
Other countries are facing the problem of trying to meet energy demands while changing their fuel source. In the US, for instance, a proposal to force California’s two nuclear power plants – which generate 16 percent of the state’s electricity – to shut down immediately when the Nuclear Waste Act of 2012 becomes law, would cause rolling blackouts, spikes in electricity rates and billions of dollars in economic losses each year, according to the state’s nonpartisan analyst, the Legislative Analyst’s Office, in November.
Germany is planning to close down all its nuclear reactors by 2022. At present, atomic energy accounts for around a quarter of the country’s power supply, but the government hopes that renewable energies will account for 35 percent of national power by 2020. However, the transition is unlikely to be smooth: Germany’s network regulator, known as the Bundesnetzagentur, believes that the exit from nuclear power will increase blackout risk, particularly in Southern Germany which relies heavily on nuclear power, has comparatively high industrial energy demand and is already prone to grid instability.
Drawbacks of renewable energy
While renewable energy is on the rise in many countries, a major drawback is the “volatility” of supply. This leads to several challenges. The unsteady production of energy, especially from wind or solar power, strains the stability of the network. Further, if wind turbines need to be stopped for safety reasons in extreme weather conditions, this can cause power gaps equal to the loss of two nuclear power plants within just one hour. In such cases, conventional reserve power plants would need to step in instantly. Last but not least, renewable energy has to be transmitted from sparsely populated areas to the metropolitan centres of demand.
To handle these enormous technical challenges, grids need to become much smarter. “Governments should develop new grids with metering, control and communication functions to handle the future growth of renew able energies,” says Larry Hunter. They should also promote storage facilities for excess energy such as pumped storage hydropower plants or underground vaults for compressed air.
Overhauling national grids comes at a considerable cost. Estimates suggest that European Union (EU) member states need to invest between €23 and €28 billion over the next five years in their national grid networks, particularly as the demand for power supply is now cross-border. However, the fact that the European electricity grid consists of multiple regulatory bodies, owners and operators makes it difficult to form a consensus on prioritizing areas for investment – and responsibility.
More widely, the International Energy Agency (IEA) says that the world will need to invest US$13.6 trillion between now and 2030 to boost power supply to meet increasing demand. The IEA says that 50 percent of this amount needs to be invested in transmission and distribution and another 50 percent in the generation of electricity.
Develop and test scenarios
While energy companies and governments try to tackle the problems surrounding aging infrastructures, industrial clients also need to take steps to minimize their exposure to electricity supply failures. Michael Bruch, Risk Consultant at Allianz Global Corporate & Specialty (AGCS), says that organizations need to check their vulnerability to power blackouts and what contingencies they have in place. He also believes that companies need to make sure that the various risk scenarios of power failures are clearly included in their business continuity management (BCM) strategies and that scenarios and mitigation solutions are regularly tested.
“Controlling that risk should not just be limited to having emergency back-up generators or being able to relocate their operations and workforce – it also needs to take into account the effect that a power cut could have on their supply chains as well. Risk managers need to ensure that their suppliers have equally robust measures in place as well,” he says.
Limited coverage available
Bruch says that there is a much greater burden on companies to evaluate their exposure to power blackouts as currently there is very little available coverage in the insurance market to offset the risk. “There are policies that cover business interruption but usually they are only triggered by physical damage, such as a fire on site, which covers on average just 20 to 25 percent of the business interruption losses.”
As a result of this gap in the market, AGCS has developed a non-damage business interruption product. “Power cuts are going to become more frequent and the financial losses can be very severe. As their insurer we need to provide suitable coverage for our clients, but organizations also need to be aware that they will need to make their own contingency plans to mitigate the risks,” says Bruch.
These data suggest that across all business sectors, the U.S. economy is losing between $104 billion and $164 billion a year to outages and another $15 billion to $24 billion to PQ phenomena California has the highest costs for both outages and PQ phenomena (between $13.2 billion and $20.4 billion), followed by Texas ($8.3 billion to $13.2 billion) and New York ($8.0 billion to$12.6 billion). California’s costs are based on a typical year of power disturbances; costs are likely to increase dramatically if the state experiences the level of rolling blackouts predicted for summer 2001. Projections to all business sectors are extrapolations from the survey data based on the assumption that per-establishment costs from outages and PQ phenomena for firms outside the DE and industrial sectors are anywhere from 25 percent to 50 percent as high as the costs reported by these sectors, and are statistically valid as long as this assumption is correct.
The Cost of Power Disturbance to U.S. Businesses
Power disturbances cause economic losses for businesses in a variety of ways. A power disturbance can disrupt business activities beyond the length of the outage or event because many operations cannot be restarted instantaneously. The resulting downtime means lost production or sales that the business can't always make up later. Downtime also results in wages paid while workers are idled. And depending on the kind of business, downtime can result in spoiled or damaged materials or inventory. Even brief events can damage electric motors or other equipment, creating significant losses for a business.
The electric utility industry has long been aware that power disturbances can cause economic losses for business customers. Reliable, national data to back up this assertion and quantify the losses, however, have been surprisingly scarce. Various estimates have been published, but all of them either rely on very indirect cost measures or are confined to a particular region or outage event. Most also focus exclusively on longer outages. As a result, they supply no data on the cost of brief outages or PQ phenomena. The result is that a recent review of the outage cost literature,1 found no studies from which one could reliably extrapolate the overall cost of power disturbances to U.S. business.
Primen’s study took a survey-based approach to assessing costs. A statistically representative random sample of 985 business establishments were surveyed concerning the frequency and duration of power outages at their facility and the impact on their business operations. Survey respondents were then given them a series of outage scenarios, each describing a hypothetical outage striking their facility at a specific time, for a specific duration, with or without advance warning.
EPRI’s Consortium for Electric Infrastructure for a Digital Society (CEIDS) contracted Primen to conduct a national survey of business establishments to quantify the cost of power disturbances to industrial and digital economy firms. The survey employed a statistically representative sample of 985 establishments to reflect costs of the roughly 2 million industrial and digital economy establishments in the U.S. An initial screening identified at each establishment sampled an individual who was knowledgeable about the facility’s energy usage and how power disturbances affect their operations. These individuals were then invited to complete the survey online or by mail, depending on their preference. The survey presented respondents with a set of hypothetical outage scenarios and asked them to estimate the costs they would incur from each outage across different categories. This approach, called direct costing, has been widely used by utilities to develop estimates of outage costs. The survey also captured information on the number and duration of outages experienced (which allowed for estimating annual outage costs), the number and cost of power quality phenomena experienced, and descriptive information about the business.
Industrial and DE firms are collectively losing $45.7 billion a year to outages. Power outages cost each of the roughly 2 million establishments in these three sectors more than $23,000 a year. The bulk of this loss ($29.2 billion) is concentrated in the F&ES sector, which is particularly vulnerable to equipment damage. DE firms lose $13.5 billion to outages annually, primarily from lost productivity and idled labor. The greatest losses per establishment are among CPM firms, which suffer the loss of raw materials as well as the costs incurred by other sectors.
Costs vary with the length of the outage but even short outages are costly even a one second outage can damage equipment and disrupt highly sensitive operations to the point where labor becomes idled as systems are reset and brought back online. The average cost of a one-second outage among industrial and DE firms is $1,477, vs. An average cost of $2,107 for a three-minute outage and $7,795 for a one-hour outage. Brief outages are also more frequent than outages of an hour or more; industrial and DE establishments report that 49 percent of the outages they experience last less than 3 minutes.
Chapter III
Recommendations and Conclusion
Recommendations
In power supply networks, the power generation and the electrical load (demand) must be very close to equal every second to avoid overloading of network components, which can severely damage them. Protective relays and fuses are used to automatically detect overloads and to disconnect circuits at risk of damage.
Under certain conditions, a network component shutting down can cause current fluctuations in neighboring segments of the network leading to a cascading failure of a larger section of the network. This may range from a building, to a block, to an entire city, to an entire electrical grid.
Modern power systems are designed to be resistant to this sort of cascading failure, but it may be unavoidable (see below). Moreover, since there is no short-term economic benefit to preventing rare large-scale failures, some observers have expressed concern that there is a tendency to erode the resilience of the network over time, which is only corrected after a major failure occurs. It has been claimed that reducing the likelihood of small outages only increases the likelihood of larger ones. In that case, the short-term economic benefit of keeping the individual customer happy increases the likelihood of large-scale blackouts.

Conclusion
Thus, restoring power after a wide-area outage in such establishments can be difficult, as power stations need to be brought back on-line. Normally, this is done with the help of power from the rest of the grid. In the total absence of grid power, a so-called black start needs to be performed to bootstrap the power grid into operation. The means of doing so will depend greatly on local circumstances and operational policies, but typically transmission utilities will establish localized 'power islands' which are then progressively coupled together. To maintain supply frequencies within tolerable limits during this process, demand must be reconnected at the same pace that generation is restored, requiring close coordination between power stations, transmission and distribution organizations.

Discussion Paper
Sociology 102
Current Issues
Professor: Mr. Roel Marcial
Student: Jade Magallon