Energy Needs Could Change Geography of Major Business Centers
When you think of a major international business hub, densely populated metropolitan areas such as London, Tokyo, and New York City come to mind. They are home to many multinational corporations’ headquarters and countless commercial offices; business never seems to cease in these cities. The relentless rise of electricity prices and a growing demand for high-quality power could drastically change the geography of these international business hubs in the next decade.
Premium power refers to electric supplies in a grid that is highly-reliable with minimal voltage dips and power interruptions. Dependable electricity is critical in many firms’ information and logistic systems that drive their growth. The financial sector is especially vulnerable to these instabilities; outages or instabilities of even micro-seconds could disrupt business and cost companies millions or billions of dollars annually. It is estimated that $150 billion in the US is lost annually from grid problems. Concern over rising urban electricity prices in the next few years also has companies concerned. A few major corporations are taking note of this and moving their headquarters out of metropolitans and into smaller cities with dependable electric infrastructure.
The urban suburb of Stamford, Connecticut convinced the Royal Bank of Scotland to move its North American headquarters out of the Big Apple and into their city. Promises of highly reliable, high-quality sources of electricity were made to entice the company to make the transition. Swiss bank UBS is also planning on building its North American headquarters in Stamford and GE Capital has expanded operations in the suburb as well. The influence of regional power systems has become an increasingly important component when firms are deciding where to place headquarters, expand, or scale back operations.
Highly dependable power grids are a growing need for many international businesses. It will be very interesting to see how large metropolitan areas such as New York City, London, and Tokyo will address their aging electric infrastructures.