Rebuild and Forget? New Climate Models Say Not So Fast

In March of this year, I wrote a blog post on the adaptation gap.  Here I discuss that due to some

Climate – Galveston, Texas, September 17, 2008 – Piles of debris are lined up along the seawall on Galveston Island where Hurricane Ike made landfall.

uncertainty as to actual intensity and frequency of future climate-induced extreme weather events, it is very difficult for cities to plan and invest in resilient infrastructure. The outcome of this uncertainty is that cities are not taking the appropriate action to mitigate risk. Business-as-usual continues, the same infrastructure is designed and built and communities remain vulnerable.

To remedy this climate adaptation gap requires better information on the likelihood and intensity of extreme weather events. If this information is unknown, we cannot quantify the risk. When you are not able to quantify the risk, you cannot properly run cost/benefit analysis that would result in more resilient infrastructure. The metric is not there.

New Climate Analysis Points to More Storms

Fortunately, a major step forward was taken this week. Kerry Emanuel from the MIT Lorenz Center published a paper that is likely to shake up the climate adaptation planning industry. The paper “Assessing the present and future probability of Hurricane Harvey’s rainfall” provides greater clarity regarding the likelihood of future major hurricane rainfall events in Texas. The model provides a more concise look at future hurricane risks by assigning probabilities to the likelihood of these events out to the year 2100. They accomplish this by combining global climate models with their own hurricane simulation model. By doing so they are able to develop higher resolution models that can give “precise simulations of hurricanes.” (Read the paper if you want to get more specific.)

From this paper, we see that the likelihood of 20 inches plus rainfall from hurricanes has increased six-fold since 2000.  The likelihood of greater number and intensity will continue to increase out to the year 2100 if we do not work to significantly reduce greenhouse gas emissions.  To state it in another way, the study finds that during the years 1981 to 2000, there was about a 1 in 100 chance of a hurricane producing a large rain event exceeding 20 inches. By the year 2081, the study’s models suggest that the likelihood will increase to a 1 in 5.5 chance.

The benefit to planners and government decision makers is they now have a little better clarity as to what to anticipate in the next few decades. This clarity, i.e. probability distributions and likelihood estimates of future hurricane events, increases their ability to quantify the risk of future hurricane events. What it does not do is help to understand the risks of other natural disasters, such as non-hurricane related floods, droughts and extreme heat in the Texas Gulf Coast region. The problem with this is that we cannot weigh the likelihood and impact of separate extreme climate and weather-related events. How does a community prioritize action if it does not know what is the greatest risk?

Investing in Houston 

Let’s set that concern aside for now because with this study we at least have a better idea as to hurricane risk. So how does this become a part of the decision maker and planners’ conversation and analysis? Is Mayor Turner, Judge Emmett, Harris County Flood Control and/or the Army Corp of Engineers going to use this information to guide future stormwater management infrastructure planning? At this time, they are actively working toward identifying appropriate stormwater mitigation investments. In the policy-making world, we would call this a  punctuated equilibrium agenda-setting event. Now that this is on the public’s agenda, how far will they go and will this momentum continue? Time will tell. With the lack of funding coming from the federal government at this time and the considerable pushback on the $61 billion Texas Harvey Recovery Plan, building more resilient appears not to be a federal priority.

If the federal funding does not materialize, believe it or not, it will be very likely that much of this momentum goes away. People will rebuild, some infrastructure will be patched up and things will continue as usual. If history is any indicator, our short-term memories will allow us to forget and continue on.

It is up to the business and NGO community to keep this a part of our conversation and on the agenda. To keep it on the agenda will require resources, as well as ongoing demand from the private sector, particularly the oil and gas companies. It is in their best interest to do so. Their business and employees can only undergo so many disruptions before employees and their families look for higher ground.

If the private sector decides it is not worth the effort to change the way we do things, we will go back to business as usual. We will rebuild and try to forget this ever happened. However, with what Emanuel’s models are showing, we may not have the luxury of rebuilding and forgetting.

 

 

 

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Critical Action Needed to Make Electric Power Grid more Resilient to Climate Change

With three major hurricanes wreaking havoc on the United States’ power sector in 2017

2560px-Katia,_Irma,_Jose_2017-09-08_1745Z–1935Z
Katia, Irma and Jose…After Harvey and before Irma…                 Hurricane Season 2017

there has been a growing discussion on how to make the grid more resilient. Due to climate change, it is anticipated that storms are likely to become more intense and possibly more frequent, placing growing pressure on the ability of the power system to keep the lights on. We are already finding that climate-induced extreme weather events are already resulting in more frequent and longer duration outage events in the United States.

Defining Resilience 

With this growing threat, a resilient power system sounds like a good thing. Unfortunately, it appears that there is some difficulty in defining what we mean by a resilient power system. From many of my recent conversations, I find there is confusion by what we mean by resilience. For example, I see in some cases, reliability and resilience are used interchangeably. To be clear, reliability is not resilience. According to a recent National Academies of Science Report “Enhancing the Resilience of the Nation’s Electricity Grid,” reliability deals with ensuring there is an adequate amount of power supplied to meet demand, even in times of expected and “reasonably” unexpected outages. Resilience differs in that the expectation is that a resilient system can adapt and lessen the likelihood that an outage will occur and if one does occur to manage the event, lessen impacts, recover as quickly as possible and learn how to deal with future outages.

Valuing Resilience 

IceStormPowerLinesBeyond defining resilience another issue we face is that much of the decision making and cost/benefit calculations are based on economic efficiency calculations that value the benefits of a reliable grid, not a resilient grid.  The focus is on short-term cost-benefit optimization that is detrimental to resilience improvements. In other words, the calculation looks at what keeps the lights on now in our current environment, not what investment would limit the large-area, long-duration outages that may occur due to severe weather activity or other cyber or physical attacks. To overcome this issue requires that there is a better understanding of how to value resilience. To do this requires that we have a better idea as to the probability and intensity of future events that may impact the grid. These known unknowns and unknown unknowns are not easy to value which is problematic when putting together a rate case to fund this investment. Fortunately, steps are being taken to quantify metrics tied to what would be considered a resilient power system. With the development of better metrics to measure performance, it will be more likely we can make more resilient appropriate investments.

Resilient Components – Weighing the Costs

As we get better at improving our ability to define, measure and value a more resilient power system, what would be some strategies that we could pursue? There are a variety of ways to make the transmission and distribution system more robust. All of them may add significant upfront costs to the system but are likely to also provide long-term benefits as the power system is more able to withstand more severe weather events. Following is a very high-level overview of some options that could be considered.

Put the wires underground, sometimes…Undergrounding power lines is an option that I hear a lot. The problem with “undergrounding” is that it is significantly more expensive than hanging the wires on poles. So, we must weigh the cost and benefit of such an approach. In an area that is susceptible to high winds, ice storms and tornadoes, placing the wires underground may be worth the cost. The question we must ask is whether we anticipate there will be an increasing number of these events that would justify burying these cables? At this time, we know that things are going to get a bit hairier, but we are uncertain as to how hairy and when. That makes it difficult to pull the trigger.

Also, we must remember that an approach that would make a power system more resilient in one location may not be as successful in other. For example, if an area is susceptible to flooding, burying wires may be a bit more problematic. Although protections can be put in place to protect against flooding of underground lines, that adds additional cost and it may still not prevent a disruption. Further, any disruption, due to damage to an underground cable, will likely take longer to fix and be more costly than repairing above-ground wires. We must ask are we preparing for floods, high winds or both?

Elevate substations…Not only are the wires susceptible to water, substations can be, as Underwater_substation,_Cedar_Rapids,_June_12_2008well. This was demonstrated by Hurricane Harvey flooding which ruined multiple substations. This damage can be limited by elevating the platform for where these components sit. Levees and dikes can also be built to protect these systems. This is easier done for new infrastructure development, however moving or elevating legacy systems can be cost prohibitive if the proper valuation of this benefit is not properly accounted for.

Strengthen wires and poles...Additionally, for the transmission system, there are methods that can make it more robust, particularly to ice storms and strong wind events. This would include reinforcing poles and towers or constructing wind-resistant concrete and/or steel poles. There could also be more frequent deadends placed along the system. At present, the practice is to place a dead end every ten miles. Placing these deadends more closely together will reduce the likelihood of a domino effect if one of the standard designed poles are compromised.

A smarter gridFor distribution systems, improving resilience requires moving from a radial design to a more networked design. A networked design has more than one supply feed that limits outages if one of the lines go down. The network designs should be coupled with more advanced communication infrastructure that allows systems damage to be isolated and to reroute power when a component is damaged. These smarter grid systems have been deployed in a patchwork across the United States. CenterPoint, in the Houston-Galveston region, does have some smart grid components deployed which allowed for more rapid recovery during Hurricane Harvey.

Final Thoughts

The bottom line is that solutions exist. I presented a short list of options that may be considered. I didn’t even touch on the fast-approaching opportunities that come with decreasing cost of battery storage. The problem with pursuing many of these strategies is the added expense. Our decision-making frameworks for utility investment are not set-up for resilience investment, they are set up to ensure a reliable grid. Fortunately, with better climate modeling and resilience metrics, we are getting closer to properly valuing the short and long-term benefits of the resilient investment and are moving in the right direction. In the meantime, we will just keep trimming the trees.

 

 

 

More Green for Green Infrastructure – Funding to Mitigate Climate Risk

green infrastructure
Street Side Bioswale – mitigate climate risk; storm water damage

In the United States, it is estimated that $4.6 trillion will need to be spent to meet our current infrastructure needs. As of the 2017 ASCE Infrastructure Report Card funding may be available for about half of that amount; there is a funding gap of $2.1 trillion.  In the 2016 report Failure to Act: Closing the Infrastructure Investment Gap for America’s Economic Future,  the ASCE does a nice job in explaining what may happen in case we do not take this funding gap seriously. According to the latest report card, taking it seriously means investing about $206 billion per year. However, it is important to keep in mind that the $206 billion per year does not take into account future damage to our infrastructure due to climate risk.

Recently, I posted a blog about the possibility of closing the funding gap using resilience bonds. As I mention in the blog, resilience bonds are an interesting idea that is waiting for the right circumstances. There is growing interest in these bonds, as a way to pay for more resilient infrastructure to reduce climate risk, but the right projects have not been identified.

Environmental Impact Bonds

To deal with climate risk what seems to have a bit more traction are environmental impact bonds (EIB).  One has been issued in Washington DC for stormwater mitigation and a second is being considered in New Orleans.

The EIB is a tax-exempt municipal bond that utilizes a pay for success approach to financing infrastructure. The bond provides upfront capital for innovative resilience-focused projects and shifts downside risk from government agencies to the private sector investors. The public sector repays investors based on the whether the agreed-upon environmental outcomes are achieved. If agreed upon performance is not achieved, the investor covers the loss.

Washington, DC – Storm Water Mitigation

The first EIB was closed in September 2016 with the DC Water and Sewer Authority. This is a 30-year, $25 million bond with a mandatory tender after five years. The interest rate is set at 3.43%. With this bond, DC Water is looking to implement green infrastructure to mitigate stormwater risk but lacked capital. Further, the utility was attempting to implement a new, more innovative approach to stormwater mitigation and was concerned about performance risk. The EIB investors took on this risk and will pay DC Water if the infrastructure under-performs. The investors in this project are Goldman Sachs and Calvert Foundation.

At the five year mark, an additional payment of $3.3 million will be made, either by DC Water or the investors. Who pays will be dependent on actual stormwater runoff reductions. Who gets paid is determined by an independent evaluator. The evaluator set the performance metrics for the project. If reductions in stormwater runoff are greater than 41.3% then DC Water will bay an outcome payment. If the runoff is reduced less than 18.6%, Goldman and Calvert will pay a one-time risk share payment to DC Water.

New Orleans – Wetland Restoration 

New Orleans just started down its own EIB path July of 2017. The focus here is on the

NASA-completes-study-of-Louisiana-Gulf-Coast-Levees-and-Wetlands
Louisiana Coastal Wetlands

restoration of coastal wetlands. The coastal wetlands act as a natural buffer from sea level rise and storm surge. The wetlands have been damaged by natural events, but this damage has been exacerbated by oil and gas exploration activity. It is anticipated that without restoration of these wetlands, approximately 1,750 square miles of wetland could be lost by 2060. This would result in significant economic and community costs.

The desire here is to restore this natural infrastructure.  EDF will be working with Louisiana’s Coastal Protection and Restoration Authority to identify the specific coastal restoration project. A portion of this restoration work is expected to be funded by RESTORE dollars. However, additional funding is needed to complete the work to mitigate this climate risk. The additional funding will be provided by NatureVest in the form of an EIB pay-for-success bond.

The United States faces significant costs to bring existing infrastructure up to standards, as well as prepare for and recover from natural disasters. Non-traditional financing mechanisms are available to help fund this infrastructure. Earlier, I discussed resilience bonds as a possibility. Reliance on traditional bond funding, and federal and state dollars are not sufficient to manage the existing gap, much less prepare for future climate risks.  It is good to see that some cities are taking innovative steps forward to build and prepare for the future.