Power as a Service (PaaS) is a business model which provides major energy users with guaranteed power services in exchange for a fixed monthly fee.
Unlike Energy as a Service (EaaS), which typically refers to energy efficiency–related business models or subscriptions for solar energy provided by Energy Service Companies (ESCOs), Power as a Service applies exclusively to major energy users who own, or are looking to invest in new, high voltage electrical infrastructure.
In the UK, electricity is transmitted at high voltages (usually 66 kV or above) to reduce power losses, and needs to be stepped down to lower voltages via a substation transformer before it is distributed to, and used by, consumers.
Many businesses own their own transformers and other high voltage electrical infrastructure, known as private wire networks, which are not part of the National Grid. These private wire networks transform and distribute electricity around businesses premises to power their operations.
Private wire networks can include, for example, transformers, cables, LV/MV/HV switchgear, standby generators, Uninterrupted Power Supplies (UPS), Protection systems, SCADA, renewable energy sources, Electric Vehicle charging and Power Management systems. They provide and manage the essential power which businesses rely on to operate.
Private wire networks provides critical power for businesses’ IT systems, security systems, lighting and production facilities. Any failure can cause unexpected power outages and significant business disruptions, loss of revenue and potential safety issues for any business.
Managing these high voltage systems requires expert knowledge in order to ensure compliance with all relevant legislation, health and safety, environmental and regulatory issues. On top of these requirements owners of private wire networks are responsible for their day-to-day safe operation and maintenance as well as planning and paying for any expansions or upgrades of their networks.
Owning and managing a private wire network is not usually something which most business want to do - but is a prerequisite of running a business which consumes large amounts of power.
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Power as a Service provides a means of outsourcing the ownership and management of private wire networks - including all compliance, regulatory and environmental issues, so that business owners can concentrate on their core business. During the contract, the energy company takes on ALL operational and maintenance responsibilities AND legal liability for the assets. In addition, they will carry out necessary HV electrical upgrades and expansion projects, to achieve greater capacity or improved reliability, to help meet overall business goals. The energy company supplying the service takes on the risk of asset failure. Should an asset fail during the contract the energy company will repair or replace the asset at their cost.
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With Power as a Service the customer pays a fixed monthly fee for a period of approximately 10 years, during which an energy company owns and manages their Private Wire Network or other electrical infrastructure. After 10 years the customer has the option to either buy back the electrical infrastructure or renew the contract to continue the service.
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Under Power as a Service, the energy company supplying the service adopts or buys the existing HV electrical infrastructure from the business procuring the service, providing the business with a valuable CAPEX injection. This capital provision means that businesses which are looking to upgrade or expand their electrical networks can upgrade to modern, high-specification electrical systems, even if they previously lacked the required CAPEX.
Read momre about releasing value from energy assets.
Power as a Service also enables businesses to benefit from the latest technologies, upgrades and innovations without additional CAPEX investment. Modern energy efficient technology and active network management can help reduce costs at the same time as delivering carbon savings.