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Utilities and Climate Change Hysteria Redux

Sept. 18, 2014
The Grid Op expert panel strikes back! Last month I wrote a provocative piece, Climate Change Hysteria: Utilities Will Benefit, and sent it out to our Grid Optimization panel of experts. So enjoy these viewpoints from the United States and Europe, from academia and utilities. I certainly did. Chip in with your own thoughts in the comments section. --Paul Mauldin

The Big Question is What Influence Man Has

First as a correction, LIPA has not been privatized. Under contract with LIPA, PSEG functions as the service provider. The result is a hybrid structure that retains LIPA as a public utility with many of the same benefits of other government-owned utilities.

Conceded that our climate may be warming because, as the piece appropriately states, geologically the earth has been heating up and cooling down since the beginning of time. The big question is what influence man has on this.

A few things make me hesitate to jump on the global warming bandwagon blaming the greenhouse gases produced by mankind as the cause for what is happening. For one, the models that predict carbon-induced warming are not very reliable and cannot even explain what has happened over the last 15 years let alone what the temperature will be at the end of the century.

Very important, man's contribution to greenhouse gas inventories is a very small fraction of what is produced by natural sources, and well within the noise level of variations in these sources from time to time. On this basis alone I think it is appropriate to question the merit of spending trillions of dollars to affect an outcome over which we really have no control.

As an old utility guy, I do not see anything new in the weather events that today are causing significant outages. There has definitely been population growth in certain areas with an increase in investment that magnifies the extent of damage compared to years ago. In the final analysis, however, the weather events occurring today are the same as those we predicted in the 1970's in terms of frequency and intensity.

If there is any silver lining to the climate change panic, it is the fact that many utilities are spending significant money to harden systems and improve service restoration. This is a good thing and puts a smile on the faces of the old utility guard

Matthew C. Cordaro PhD
Trustee at Long Island Power Authority, Former Utility CEO, University Dean

Key Climate Change Facts

These are the key climate change facts as of September 2013 as published by the UN IPCC scientists themselves in their official 2,216-page scientific report _Climate Change 2013: The Physical Science Basis_. (Note: It is very important to strip away the political propaganda that is the cover letter and the 20-page Summary Report for Policy Makers that are neither consensus documents nor scientific documents, but rather the propaganda work of political representatives to the UN that carry the water of their constituent governments. The unmolested 2013 UN IPCC scientific report itself can be found here ( ).

1. There is no evidence of increased hurricanes or droughts or floods in the 20th or 21st centuries. The 2007 IPCC report was flat wrong on these conclusions. In fact the archaeological evidence of past flooding events indicates stormy weather was milder in the 20th century than in any of the preceding 5 centuries.

2. The 15-year hiatus in global mean surface temperature (GMST) warming since 1998 is real and points out the failure of the official climate models in grossly over-predicting temperature rise. Additionally, 3 of 5 studies found that ocean warming has also slowed during this time.

3. Factors other than CO2 such as solar variability, particulates, plant aerosols, and clouds must be more influential on climate than previously credited.

4. There is little evidence and no consensus among these scientists of any abrupt or catastrophic climate change occurring in the 21st century, and there is no evidence of critical tipping points or the irreversibility of climate change effects such as glacial ice loss.

5. The prediction for the most likely amount of sea level rise is just over 2 meters by the year 2500, and this pace is far lower than the average pace of rise for the past 18,000 years since the last ice age. Sea levels on the US west coast have actually been falling.

Overall, the 2013 IPCC Fifth Assessment Report published in September of 2013 is a dramatic recanting from the alarmism of the 2007 Fourth Assessment Report. It is noteworthy that the recent White House “National Climate Assessment” virtually ignores the 2013 IPCC report and instead relies on the 2007 version to support its claims of already-occurring damage due to human activities. Ignoring the best science to instead pump out contradictory facts that suit a self-serving ideological and political narrative is the very definition of “propaganda,” and is certainly no basis for sound energy or climate policy-making.

The most important takeaway from all of the above is that the actual scientific climate consensus of 2013 is far less alarmist than it was in 2007 when Al Gore scared the world with Powerpoint pictures of an earth covered by hurricanes and the continental USA on fire from end to end. The full scientific report further reveals that plant fertility and food crop yields are increasing, the Earth has 6% more green plant coverage now than in 1982, winter mortality is decreasing far faster than summer mortality is increasing, general mortality rates continue to fall in most countries, and the burden of human disease is predicted to decrease 30% by 2030. Furthermore, the integrated assessment models (IAM) that tally up both the costs and benefits of climate change agree that the 0.8 degree C warming that has occurred since 1880 has been of net benefit to the Earth and human civilization, and the consensus of 14 studies is that the benefits will outweigh the costs for another 2 degrees C of warming (

Hardening the grid in general is certainly of benefit to reliability, and a much better way to spend money than on CO2 reductions -- especially efforts with marginal lifecycle reductions when properly accounted and with insignificant impact on global CO2 emissions.

Todd "Ike" Kiefer
Contracts Administrator
East Mississippi Electric Power Assoc.

Climate Change Experiment at ConEd

I worked on a climate change experiment while I was at ConEd; at the same time the NYISO was analyzing the impact if they raised their design temperature and if they planned that this design temperature will occur more frequent, i.e. every two summers instead of three.

We translated climate change as an increase in load, which is very critical in the summer and resulted in a large capital expenditure and in the winter resulted in reduced time where we can take feeders and equipment out of service for maintenance.

We looked at % loading as = X/Y, where X is the load and Y is the ratings. For this study we kept the ratings unchanged, which is not true, since almost all your equipment at various stages will be de-rated.

We are doing a lot of post Sandy reinforcement, where we raise and rebuild critical stations in the flood zone, install more SCADA and reinforce critical facilities, such as hospitals and refineries.  Having said that, this summer was very cool, which usually results in less expenditure and research pertaining to climate change.

Ahmed Mousa
Principal Engineer
Electric Delivery Planning section

Defending the 'Hysterical' Perspective

I’m not going to argue with you on the hurricane statistics, or your conclusions. But you’ve given me occasion to defend the hysterical perspective on climate (which, given the etymology, is perhaps a woman’s job).

Specifically, I’ll take issue with your statement that half a percent of absolute temperature variation is an incredible level of thermal stability, in the face of natural insolation variations. Yes and no. Yes, it’s a remarkable level of stability when you think of the earth as a physical system with a varying external energy input, and it speaks to the importance of negative feedback effects that tend to counteract these variations. But look out for two fallacies:

1. A small percentage of physical variation equals small ecological impacts. No!

Think about thermoregulation in your body. Using absolute temperature (Kelvin) as a basis, a 0.5% variation from 37 deg C would amount to a change of about 1.6 deg C. How do you feel when you have a 38.6 degree temperature, or 101.5 degrees F? Pretty damn awful!! Now, of course, the question: for purposes of interpreting thermal stability of the planet, to what extent does the biological metaphor apply? In my opinion, considering the complexity of physical, chemical and biological processes on earth that we care a lot about, and that depend very sensitively on temperature, it is a fair and meaningful comparison. And in that sense, a 0.5% variation is HUGE! It may occur from time to time, and it may be survivable, but it sure ain't business as usual.

2. Stability with respect to varying input means the system stays robust if you tweak the feedback mechanisms. No!

If anthropogenic climate change were about us humans dialing up the amount of incident sunshine, your point would absolutely apply: the earth is relatively capable of maintaining thermoregulation as you vary the radiation input. But we’re not varying the input signal; we’re tweaking the gain function. From ocean currents and methane hydrates to soil bacteria and vegetation covers, we’re playing somewhat randomly and ignorantly with levers in the feedback processes. And the less certain we are of our available climate models, the more cautious we should be, in my opinion, about making changes that may or may not result in very large gains. In fact, we have rather sufficient reason, in my view, to jump up and down and scream and yell that we must stop burning coal, until or unless our science proves it to be safe.

So, you might call that hysteria, but I call it being conservative.  :-)

Dr. Alexandra “Sascha” von Meier
Co-Director for Electric Grid Research at the California Institute for Energy and Environment and Adjunct Associate Professor in the Department of Electrical Engineering and Computer Science at UC Berkeley

The European Perspective

Perhaps the word "hysteria" accurately reflects the feeling in the USA. There are concerns in Europe with respect to climate change impacts. However, I'm going to leave it to the experts (& extracts from the PWR database) to give their view on what is happening. In the possible event that readers are unhappy with the following, please address your "unhappiness" to those mentioned in the various articles, rather than me, the messenger.  I'd also point out that a number of the comments come from insurance companies - who I would assume, have a reasonable of the financial impact of weather events and their frequency (of the financial impact).

I have only posted a snapshot, of one year - I could go back to 2007, but repetition tends to get a bit boring. Although what is said does not directly relate to power networks, nonetheless the implications the articles carry suggests there will be an impact. I'd also draw readers attention to the final article about which regions will be impacted most - which may account for the "hysteria" in the USA and the "concern" in Europe.

Jan 2014 Germany: Summer floods and hailstorms will cost the German insurance industry Euro7bn for 2013. The largest bill for damages the industry has faced in more than a decade. German insurance trade body GDV expects weather-related catastrophes to intensify in the coming decades, with flood frequency doubling and storm-related damages increasing by half by 2100. (PWR Comment: ref: UK floods early 2014) Hailstorms cost the German insurance industry 3.1 billion euros in 2013. The June floods cost 1.8 billion euros. On an inflation-adjusted basis, the 2013 damages are the highest in Germany since 2002.

Nov 2013: World Economic losses from extreme weather events have risen from an annual global average of about $50 billion in the 1980s to close to $200 billion over the last decade, according to a World Bank report which cites the weather-related damage figure from Munich Re insurance group. Financial losses are concentrated in fast-growing, middle-income countries because such countries' high-value assets are becoming more exposed. The average impact of disasters in such nations equaled 1 percent of gross domestic product between 2001 and 2006 - 20 times higher than the average for high-income countries

July 2013: Companies Nearly 90% of S&P Global 100 Index companies identify extreme weather and climate change as current or future business risks, across all industry sectors. But they lack the data and tools needed to effectively assess and manage these risks, according to a report from the Center for Climate and Energy Solutions (C2ES).

July 2013: USA A Worldwatch Institute report that came out in May 2013 says the US was seriously affected by weather extremes last year, accounting for 69% of overall losses and 92% of insured losses due to natural catastrophes worldwide.  Hurricane Sandy, the summer-long drought in the Midwest and severe storms with tornadoes accounted for $100 billion of those global overall losses, the report says. The insurance industry covered $58 billion of the losses. These losses were the second highest overall and insured losses since 1980 in the US.

July 2013: Various Insurance broker Marsh in a new report said that infrastructure investors are still failing to adequately consider the impact of climate change when making long term investments, leaving energy, transport, and communications developments exposed to mounting physical risks. The report argues the risks of failing to incorporate climate risks are huge: the estimated costs of the UK floods in 2007 was around £3bn. (PWR Comment: the costs due to the 2014 UK floods are likely to be greater). In 25 years' time the Confederation of Business Industry predicts flood damage could cost the UK economy as much as £10bn each and every year.

June 2013: Global Worldwatch Institute report. In 2012, there were 905 natural catastrophes worldwide, 93 percent of which were weather-related disasters. Those disasters caused $170 billion in overall losses and $70 billion in insured losses. Asia endured the most natural catastrophes with 37% of the total, followed by the US with 26%, Europe with 15%, Africa with 11% and Australia/Oceania with 6%. While the breakdown is in line with the long-term average from 1980 to 2011, trends show considerable regional differences.  The largest increases over the last 30 years occurred in North America, including Central America and the Caribbean, followed by Asia, and Australia, while the smallest increases happened in Europe and South America. The US insurance industry expects climate change-related storms and weather occurrences to worsen, but studies and anecdotal evidence from insiders show it's not doing much to combat global warming or prepare for it. Peter Höppe, heads of Geo Risks Research at the reinsurance giant Munich Re, cited studies forecasting a rise in future summer droughts, severe cyclones and increasing risk of storm surge.

Happy stuff eh?

PS: on the Euro DNO front, concern tends to be with respect to floods, reflecting what is becoming a more regular occurrence in Europe (looks like roughly every 7 years in the UK). The UK's Met office have observed what they call "sky rivers" which are weather patterns with large amount of water which "let go suddenly". These weather features are attributed to a warmer atmosphere. As mentioned above, if you are unhappy with this "view" feel free to contact the Met office and enter into "meaningful and robust discussions" with them :-)

Mike Parr
Systems Engineer UK DNO: Merseyside & North Wales Electricity Board O&M and new build. Senior Authorised Engineer to 33KV

Where is the Utility Industry?

I’ve got to agree with Sascha. I’m not a scientist, but I am a former Alaskan, and glaciers that I walked on 35 years ago have all but disappeared, and the ice I stood on in Prudhoe Bay during June three decades ago just can’t be found now. So yeah, the earth is heating up, and most of the credible scientists in the world do believe the cause is the burning of fossil fuels. As I see it we have two choices: 1) put our heads in the sand and deal with further climate disruption; or 2) invest in new or retrofitted power plants to replace those burning coal.

So, what exactly would that cost? According to the U.S. Chamber of Commerce, no friend of climate hysterics, the tab to reduce GHG emissions 40% from 2005 levels would be $50 billion a year, from 2014 to 2030. That equals about 0.2% of real GDP during the same period. Cheap insurance!

And who would be the most immediate beneficiaries if the nation decided to buy that insurance? Utilities, their equipment and software suppliers, those who design and build power plants, and everyone who works for them. So, the big unanswered question is not whether climate change is anthropogenic, but why isn’t the utility industry arguing on Sascha’s side and lobbying to develop and build new and cleaner power sources … and a smart grid to support it all?  Enlightened self-interest, and all that.

Lee Harrison
Former editor at McGraw-Hill’s Electrical Week newsletter, editor for Business Week, and researcher with EPRI

The Utility Perspective

While I don’t know if utilities in general believe climate change is real and human caused, I think many utilities think society is going to do something about it, and the utilities would like to settle the uncertainty around pending climate change regulations and government actions. At the same time they have some concerns about what those regulations and actions might mean to them. Here are a few issues I think that arise to various degrees in different utilities thinking:

1. Will the climate change regulations or government actions be “fair,” e.g., a tide that raises, or lowers, all boats. Even if a utility were allowed to invest, and recover and earn on that investment, either in competitive or regulated markets, it probably translates to higher rates. (There might be some solutions that would lower rates, but I don’t hear much optimism from the industry about that prospect.) Higher rates can drive industry and commerce to relocate to areas where other utility rates are now seen as lower because they didn’t have to make the same degree of investment to comply with climate change regulation. (Of course one could argue that the high GHG emitting utilities have been “getting a free ride” up until now, but in general commerce ethics don’t usually work that way. As long as the company obeyed the rules and laws, then what it did was fair and ethical.)

2. Even if climate change regulations encourage or induce new investment, regulated utilities have seldom found it a slam dunk in recent memory to get the investment allowed in rate base, and at a return they would like or need. There are almost always those in society who will resist the allowance of the investment for various reasons, and not all economic ones either. (I think the situation for the utility in a competitive market was covered in #1 above.)

3.  Even if the utility gets new investment into operation, there is the threat of backlash in competitive markets or by utility regulators that could strand the investment, perhaps due to unforeseen economic or reliability problems with, or because of, the new investment. In some utility thinking this scenario is plausible, or perhaps even likely, because of, e.g., relying on variable generation resources, or new technology like carbon capture and sequestration. New can be scary.

Since I have not worked inside a utility in decades, I could be wrong about what they are thinking, so take what I say above with a grain of salt, and verify with others, but I do communicate with utilities frequently and the above is what I sense.

Dr. Merwin Brown
Electric Grid Research Program Co-Director for the California Institute for Energy and Environment (CIEE)

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