The impact of the Labour budget on the UPS industry
The Uninterruptible Power Supply (UPS) market is set to experience continued growth as we head into the new economic year. While the October 2024 budget did not directly address the UPS sector, the broader economic and technological policies unveiled will undoubtedly have an indirect effect on the industry’s growth and demand dynamics.
In the Labour Party’s initial October budget, Chancellor Rachel Reeves acknowledged the transformative potential of technology in driving economic growth. She announced that the Government’s Chief Scientific Adviser (GCSA), Professor Dame Angela McLean and National Technology Adviser (NTA), Dr Dave Smith have been tasked to lead a review into the barriers surrounding the adoption of transformative technologies for enhanced innovation and productivity.
The review will focus on eight key growth-driving sectors; advanced manufacturing, clean energy and creative industries, defence, digital technologies, financial services, life sciences and professional and business services - sectors originally identified in the government’s Industrial Strategy green paper.
The findings, to be published in Spring, will pinpoint the issues businesses are currently facing in their efforts to adopt both new and established technologies and build on from the existing analysis, industry insights and AI Opportunities Action Plan roadmap - the Secretary of State’s recommended plan to drive growth of the AI sector in the UK.
Conclusions will undoubtedly shape government policy for 2025 and beyond, and highlight the key areas for future investment. As has already been discovered through the Industrial Strategy green paper, accelerated technology adoption, particularly in companies beyond those of the country’s recognised frontier firms, could drive significant productivity gains for the UK’s future economy. Funding aimed at reducing these barriers and supporting the wider uptake of innovative technologies is therefore highly likely to be made available for businesses that fit designated sector criteria.
This growing pace of technology adoption is set to significantly impact the future of the UPS industry. The rollout of 5G networks and expansion of cloud services and edge computing increase the need for reliable power solutions that ensure data integrity and prevent downtime.
The proliferation of Internet of Things (IoT) devices is increasing dependency on consistent power supplies that avoid disruption to connected systems – as is the infrastructure that supports these IoT devices, such as data centres etc, that rely on robust backup power solutions capable of handling increased energy demands.
On a global basis, the seismic shift towards a ‘greener’ future is also having a direct impact on the industry. Significant resources have been set aside for renewable energy investments, with £1.1 billion being dedicated to offshore wind projects. This substantial investment in renewable energy infrastructure will drive the need for advanced power management systems, green UPS and backup solutions that help to maintain power stability and address the intermittent nature of renewable energy sources.
Essential components in the facilitation of microgrids that incorporate renewable energy supplies, UPS systems enable the seamless transition between grid power, renewable sources and stored energy.
By acting as a buffer against ‘green’ energy fluctuations, the UPS ensures power stability, providing a continuous electrical flow to local facilities and communities during periods when the renewable energy source is either unavailable or inconsistent. The UPS’s ability to quickly respond to these changes in supply and demand assists in balancing grid frequency, particularly valuable in renewable-heavy grids where the sudden drop in energy production leads to frequency instability.
As many modern UPS solutions are now able to integrate with battery energy storage systems (BESS), they also have the ability to store excess energy generated during peak production times themselves, resulting in a more energy-efficient power protection solution.
With the UK’s commitment to achieving the key energy initiatives outlined in the COP29 Global Climate Summit, we will undoubtedly see the continued growth of energy-efficient technologies – including those in the field of backup power systems.
Modern UPS solutions, particularly those with advanced features such as remote monitoring, predictive maintenance, eco-modes and high-efficiency ratings, are certain to become a more attractive investment amongst companies keen to meet their own sustainability and carbon initiative targets. Businesses looking to replace current legacy systems may however find themselves balancing the higher initial costs of a more premium energy-efficient UPS against potential tax benefits and the longer-term operational savings any new unit will bring.
Conclusion
The economic and technological policies unveiled in October’s budget will undoubtedly see additional demands being placed on the UPS industry.
With energy security and digital infrastructure becoming increasingly critical to business operations, the need for superior levels of power resilience has never been greater. As we look towards adopting more emerging technologies and integrate renewable energy sources into existing systems, we must also look towards the power protection strategies that will support them.
While it remains to be seen where future policies and incentives will support further technology investment, companies should seek to maintain flexibility in their procurement strategies, adapting budgetary allocations and adjusting UPS purchasing decisions to support technology adoption as it occurs.
If you would like further information on UPS solutions to support emerging technologies, please contact a member of the Power Control team on 01246 431431 or email info@powercontrol.co.uk