Getty Images 1165580364
Getty Images 1165580364
Getty Images 1165580364
Getty Images 1165580364
Getty Images 1165580364

Building Grid Resilience by Confronting Extreme Weather Challenges

July 22, 2020
To operate in a changing environment, utilities should develop effective resilience strategies.

There is little doubt at this point that climate change is increasing the frequency and intensity of extreme weather events, which have a severe impact on the electricity grid. Droughts, wildfires, flooding, hurricanes, and other events pose a major challenge to grid resilience.

In fact, the most recent iteration of our Digitally Enabled Grid research — based on a survey of more than 200 electric utility executives in 28 countries — showed that more than 9 in 10 executives (95%) believe that climate change because of greenhouse gas (GHG) emissions has been a contributing factor in the number and frequency of extreme weather events they have experienced over the past 10 years. And 90% of those surveyed said an expected rise in severe weather poses increased financial risks to their grid businesses.

Furthermore, this will have an impact on customers too. Our analysis shows that, if the compound annual growth rate (CAGR) from severe weather outages continues at the current rate, the annual customer cost for severe weather outages could rise 10-fold from US$14 billion in 2020 to US$140 billion in 2030.

To address this challenge, electric utilities need greater system flexibility, delivered through digital and emerging technologies. Elements of such a flexible system include active management of available network redundancy, distributed generation, and energy storage. But there is much more that utilities can do to increase overall resilience. For example, 93% of our survey respondents said they are testing innovative solutions for grid resilience, including advanced protection systems, vehicle-to-grid technology, automated self-healing grids, and drone inspection.

However, there are barriers to establishing greater network flexibility. While active management of distributed generation, including solar photovoltaics (PV), wind power, and energy storage, will be essential to supporting network resilience in the long term, 84% of respondents said a lack of information on the location, size, specification, and operational state of smaller distributed energy resource (DER) installations is affecting resilience in the near term. Similarly, the lack of industry-wide guidelines and standards hampers utilities in their efforts to increase resilience to the effects of severe weather on the grid.

Developing effective resilience strategies

Extreme weather is the new reality for electric utilities — a reality that utilities must confront even as they face the high costs of maintaining mature transmission and distribution (T&D) assets. To operate in this changing environment, utilities should develop effective resilience strategies.

The first step for utilities is distinguishing tactics from strategy. Tactics include actions such as repairing power lines and poles and maintaining and/or upgrading electrical equipment. Resilience, on the other hand, is a strategy for increasing the abilities of the workforce to handle outages. Resilience not only enables the organization to bounce back from major and even multiple events, but it also helps make the case to stakeholders for proactive investment and maintenance. It's about articulating the value of resilience-based investments and the more nuanced metrics for success. After all, in this new reality where extreme weather is the norm and no longer an outlier, what is the price of flexibility, adaptability, and maintaining supply to critical customers?

There is no standard definition of what a resilient network looks like, but its strategic goals include:

  • Reducing the impact of extreme weather events on system performance and decreasing the number of customers affected before, during, and after any event
  • Adapting to the event as it occurs to maintain safety and limit further effects on performance
  • Restoring supply quickly and effectively, and shortening the duration of any outage
  • Bringing the system back to pre-event resilience levels

To gain these capabilities, along with the other attributes of resilience, utilities should undertake three strategic imperatives.

1. Establish the foundations of resilience: There is not much regulatory direction on what resilience really means. Therefore, it is up to utilities to not only define resilience but also determine how it should be measured and assessed. Utilities are at financial risk and only utilities themselves have the data and capabilities to develop methods to assess resilience levels effectively.

At the leadership level, utilities should stress resilience in their corporate vision and in their business plans. A commitment to resilience should be embedded in the governance and processes for the entire organization. Specific individuals and teams should have clearly assigned responsibilities for resilience.

Leaders should also communicate with stakeholders including industry and community groups, consumers, governments, and regulators about the changing nature of resilience-related risks. Building a resilient grid, for example, requires utilities to work with local officials to identify critical facilities, agree on solutions, and get the necessary investments approved.

Another key foundational element is the development of enhanced analytical toolkits to model weather and asset risk. Multiple asset failures are inevitable in extreme weather events, and increasing resilience calls for topological modeling, particularly for the medium, high, and sub-transmission voltages of distribution networks. Analytics solutions also include weather-monitoring systems that consolidate real-time data from weather stations into detailed meteorological models. These can play a vital role in forecasting demand, controlling operating costs, and managing a vastly more complex system in the future.

2. Build a resilient network: With the foundation in place, the next step is to deliver the investments and process improvements needed to build a more resilient network. While network hardening can be highly effective, it is also expensive. We emphasize a focus on flexibility; this can be more cost-effective than other options, improving the use of existing asset and workforce capacity. Flexibility improvements can also support the wider agenda of more active management of the distribution network, enabling greater distributed generation volumes, more customer participation, and increased reliability and resilience against other risks such as cyberattacks and earthquakes.

To improve system flexibility, utilities can explore multiple options including reviewing available network visibility data for critical asset locations; identifying and piloting potential small-scale investments that could deliver better network flexibility; and assessing network analytics needs for flexibility concerns such as monitoring the state of the transmission network, balancing power flow, and contingency evaluation. Utilities can also investigate the possibility of accessing external sources of resilience such as distributed generation, demand response, and storage.

3. Explore emerging resilience solutions: Where resilience cannot be delivered through traditional approaches, utilities may need to develop and scale new services outside their current distribution models. Some utilities face major technical constraints in delivering resilience to all customers, such as serving numerous largely isolated rural communities. Others face relatively high risks of catastrophic weather damage, making it nearly impossible to deliver high resilience at a reasonable cost.

One way to move forward is to engage customers to identify new solutions — both within the network and at customer sites — to meet anticipated needs in case of extreme weather events. End-user solutions developed in partnership with customers and other companies can help address these potentially unmet resilience needs. The utility can help the customer understand challenges such as the likelihood of interruption or the potential duration of outages, and explore whether locally-developed resilience solutions (such as increasing the number of generation sources and diversifying their fuel types) are appropriate.

Severe weather is not going away

We do not believe that recent trends in weather events are going to recede or reverse. While utilities need to prepare themselves for a highly uncertain environment, weather resilience planning will better prepare them to handle other unexpected crises that threaten supply chains and employee deployment plans. These range from pandemics such as COVID-19 to cyberattacks, earthquakes, and geometric storms.

Flexibility and resilience will help utilities in other ways by providing additional tools to address ongoing challenges such as managing the growth of distributed generation and the adoption of electric vehicles (EVs). By increasing resilience, industry leaders can confront these challenges while protecting their ability to serve the communities in which they do business.

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