Economic risk assessment drives today’s standby power system decisions

By Jim Iverson, Cummins


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Published in:

Energy Efficiency Made Simple Vol III: Energy and enviroFiciency
November 2012 - Chapter 6: pages 72 - 73

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Increasingly, large businesses are opting for on-site power systems which, in addition to serving as standby power, also serve to control overall energy costs. These power systems are set up to run in parallel with the local utility in order to take advantage of utility incentive programmes.

Utility ‘interruptible’ programmes give businesses a credit on their electric bill for allowing the utility to determine when the standby power system should be operated to provide all or part of the business’ load. In this way, the utility benefits from being able to shed part of its load during times of peak demand and reduce strain on its generation and transmission system. In turn, the business benefits from lower electric rates.

Many of these foregoing factors can be determined long before a business owner sits down with a consulting engineer, electrical contractor or generator manufacturer, to discuss detailed planning for a standby power system. Before the discussion turns to technical matters and ‘how much hardware’ – this business-model thinking will have helped you consider the economic risk associated with a utility outage, and your desired level of response to that risk.


Take note

  • ‘Sizing and specifying’ standby power systems requires a business decision.
  • Once a company’s risks have been assessed and the degree of standby protection required has been determined, an initial sizing estimate of the standby system can begin.
  • The first step in sizing a standby power system is to establish project parameters.