Grid instability and asset health: Why industrial plants must rethink energy resilience and maintenance

Power scarcity is both a realistic risk scenario and an operational reality for many plant managers, maintenance leaders, and reliability teams. From voltage variability that damages equipment to grid constraints that limit expansion, energy availability and quality are increasingly shaping maintenance plans and day-to-day plant performance.

For industrial facilities, energy resilience is no longer just a sustainability initiative or a utility conversation. It is a maintenance, reliability, and cost-control issue that directly affects asset health, operating expense, and production continuity.

That reality is well understood by Kirk Taylor, CFO and co-founder of raw materials solutions provider American Resources Corporation (NASDAQ: AREC). The company’s background spans mining, recycling, and critical materials refinement. 

American Resources recycles aggregated ferrous and non-ferrous metals for new steel, and its newest subsidiary, ReElement Technologies is processing and purifying critical materials, including rare earth metals, as well as battery metals for electrification infrastructure. It supplies critical battery materials used in large battery storage units for data centers and artificial intelligence infrastructure, as well as magnets used to power wind turbines and defense technologies. Refined minerals are also important in semiconductor production.

“We’re trying to focus on providing high quality, low cost products into the domestic supply chain for other companies to make their high value products,” Taylor says. In these industries, uninterrupted power is not optional.

Why industrial power constraints are getting worse

Most manufacturers are already feeling the impacts of power scarcity, Taylor says. “If you have a robust risk assessment module, power scarcity should already be in there, when you’re assessing your individual company risk,” he adds.

Today’s power challenges are not the result of a single failure but of long-standing structural issues in how the U.S. grid was designed. “The location of demand, not matching the location of the supply of energy, is the biggest challenge,” he explains. Essentially, the grid was not designed and developed overtime to transmit power over long distances on demand.

Likewise, the grid was never engineered for today’s load profiles, which now include electrification, data centers and artificial intelligence, advanced manufacturing, and shifting population centers. As a result, some manufacturers increasingly find themselves operating in regions where power availability, quality, or cost no longer aligns with their operational needs.

“I don’t think five or six years ago our generators, generation companies, power transmission companies, and the regulators really modeled out what demand profiles we'd be seeing now,” Taylor says.

Designing energy resilience into mining and processing facilities

In industries like mining and mineral processing, energy reliability has long been safety critical. “In the mining industry, we have experienced interrupted power issues, either by storm or by diverted power generation,” Taylor says. It’s critical to have a backup, when workers are underground or operating heavy machinery powered by electricity. “It was vital to make sure you had an uninterrupted power supply,” he adds.

That mindset now informs how American Resources approaches new facilities and expansions. Rather than treating energy resilience as a downstream problem, the company builds it into engineering and site selection decisions.

“As we moved forward in developing our large-scale mineral refining facilities, we’ve always included energy resilience on the front end of the engineering,” Taylor explains, “Not only internally, but also talking with external partners.” For example, American Resources has worked with Honeywell to evaluate smarter approaches to energy sourcing, storage, and consumption.

“When you’re choosing a site to develop, it’s important to look at matching your anticipated demand with where that supply is going to come from,” Taylor says, or the project can go one step farther with on-site power generation, he adds.

When power quality becomes an asset health problem

For maintenance and reliability professionals, power surges, voltage drops, and intermittent outages can accelerate wear and damage on sensitive components and drive up maintenance costs. Taylor cautions against simply accepting those impacts as unavoidable. “Instead of just modeling in, ‘now I’m going to pay three percent more in operating maintenance because every once in a while I get a power surge,’ see if there's a way to innovate around those risks,” he says.

One approach is to buffer plant equipment from grid variability altogether. “See if there's a way to add an intermediate step between yourself and the grid,” Taylor explains. “Maybe do a microgrid strategy where your equipment pulls off a constant battery source first.” By smoothing incoming power, manufacturers can protect assets, extend equipment life, and reduce unplanned downtime.

For plant managers, maintenance leaders, and reliability engineers, Taylor offers practical advice that starts inside the facility. “Look at each of your unit operations and see where you can be part of the solution and find efficiencies inside your own walls,” he says.

That includes identifying energy-sensitive equipment, exploring buffering and storage options, and evaluating whether on-site generation or microgrids make sense.

“Start looking at ways to build redundancy on the front end—for energy storage or maybe on-site production, if you have extra space at your facility,” Taylor says.

Ultimately, energy resilience is not just about avoiding outages. It is about reducing operating risk, protecting assets, and building a more competitive, reliable operation in an increasingly constrained energy landscape.

For American Resources, managing power risk does not stop at backup systems or buffering equipment from grid variability. The same energy-first mindset now shapes how the company designs its processes, scales capacity, and structures its supply chain.