U.S. Businesses Show Interest in On-Site Power

American businesses-from financial institutions to farms-are increasingly interested in the idea of generating their own electricity on location, according to a national survey. Some of these businesses plan to upgrade their currently installed backup generation equipment within the next 12 months. These companies, together with businesses seeking increased control of their operations, lower costs or fewer power disruptions, add up to a viable start-up market for on-site power plants, according to the survey.

In addition, business customers prefer to acquire this technology directly from equipment manufacturers, not their local utility. These customers also prefer turning to the equipment manufacturer for service, support and maintenance, further evidence that the energy supplier relationship may soon be in transition.

These results are part of a survey of American business customers conducted by RKS Research & Consulting, a national market research and public opinion polling firm. RKS completed 993 telephone interviews this past summer with executives responsible for energy purchase decisions at a variety of businesses.

“We see a consensus building around the appeal of technology that could give a business greater independence from its energy supplier,” said David Reichman, RKS president. “Just as these business customers are thinking about new capabilities and relationships, utilities and other energy providers need to reconsider their role in this growing new market.”

This market assessment finds measurable interest in on-site generation across six segments of the business market. Health care and financial institutions evidence the highest degree of interest in distributed power generation, followed closely by agricultural customers. Businesses based in the Northeastern, Southern and Western states are significantly more interested in this concept than the Midwest, according to the RKS data.

More than two-thirds of the businesses interviewed already own or lease some form of alternative equipment, such as emergency or backup generators and uninterruptible power supply systems, according to the survey. Among these customers, one in five health care and educational institutions plan to upgrade or replace their equipment by mid 2000. By more than a 4-1 margin, these organizations plan to turn to the manufacturer-not the electricity supplier-for the purchase and support of these upgrades. Within the most interested customer groups, significant pluralities-from 39 percent to 52 percent-are interested in purchasing distributed generation technologies to power all their electricity needs.

While U.S. businesses give generally satisfactory marks to their energy providers for power delivery, outages and fluctuations vary widely across industry groups, according to the survey. For example, agriculture reports four outages each year-twice the average of the other five business customer segments. During the same period, agriculture-related businesses also experienced more than 10 fluctuations or incidents that required resetting delicate equipment.

Educational institutions and manufacturing plants also experienced a higher proportion of outages than the business average. Nearly one-third of manufacturing customers told RKS that power interruptions have a significant impact on their business. Businesses expect on-site electricity to mitigate these problems, at lower costs than the power provided by their current energy supplier.

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