Avoiding gridlock: The impact of climate on electric grids

Grids are the arteries and veins of electricity circulation. Comprising of power stations, substations, transformers, transmission and distribution lines, the grid connects electricity supply to demand. It is a complex and intricate network, exposed to many natural and man-made risks.

One such risk is climate change. To better understand weather related hazards - such as extreme temperatures, floods, droughts, storms and sea level rise - we looked at data from U.S. power outages between 2012 and 2023.  Swiss Re Institute analysis suggests that more than 1 in 3 of these power outages was associated with severe weather-related incidents. Moreover, the average number of weather-related power outages have been increasing every four-year block over the time period

Grid risk exposure is also growing. The IEA forecasts 25-30% growth in electricity demand by 2030.  To reach net zero, most of the growth in supply must come from renewables. IEA believes that renewable power share must increase from 28% (2021) to 49% in 2030 even in the conservative Announced Policy Scenario (APS).

However, the grid remains a bottleneck. An estimated 3,000 GW of renewables await grid connections globally. Grid development is being impacted by several factors, including delays due to political and planning issues, lack of investment, and supply shortages of grid components such as transformers. Also prominent in the mix is the intersection dynamics between climate change and increasing natural catastrophes (nat cats).

Examples of the effects of nat cats on the grid are plenty. Hurricane Ian left 2.6 million Florida residents without power in 2022; Hurricane Ida in 2021 cut power to 1 million in Louisianna, for more than 5 days in some cases. At least 5 million people lost power from Texas to North Dakota in the aftermath of the Winterstorm Uri in 2021.  In the same year, winter storms plunged Texas into frigid temperatures and widespread power outages.  The insulation of power cables may be subject to thermal damage under extremely high temperatures. For instance, the 2021 Pacific Northwest heat dome melted power cables as temperatures soared over 40 degrees Celsius. Just this year (2024), Storm Ingunn caused overhead transmission lines failure in Norway; and flash floods in Sydney left substations submerged and power disrupted.  Alongside event damage, the chronic effects of climate change, such as rising sea levels, are becoming increasingly observable. 

Global temperatures likely to soar by the end of the 21st century

Global average surface temperatures have already risen by 1.1 degree Celsius since 1850.  As a result, climate models project heatwaves are likely to become more frequent and intense. Additionally, climate change may weaken the polar vortex, a large area of low pressure and cold air surrounding the Earth's pole, and further the polar jet stream, a belt of high wind speeds surrounding the poles. Variabilities in the jet stream and polar vortex impact weather patterns and may result in cold snaps, which can lead to cold Arctic air moving southwards, or affect heat waves, droughts, and heavy precipitation events.  These weather patterns can result in cascading impacts on various components of the electric grid, as discussed below.

Thermoelectric generators work by creating a temperature difference (between hot steam and cold ambient air or water) into electrical voltage. Rising ambient temperatures due to climate change may reduce generation capacity and hence plant efficiency.  High temperatures are also problematic for solar power output  as well as energy storage - affecting battery cooling systems and possibly causing thermal runaway and fires. 

Rising temperatures can cause faster chemical degradation of insulating materials along with transformer failure.  The hotspot temperature of a transformer depends on both top oil temperature as well as ambient temperature. Studies show that beyond a hotspot temperature of 98 degrees Celsius, the rate of ageing for a transformer doubles with every 6 degrees Celsius rise. 

Global warming projections of 2-4 degrees temperature increase could mean transformer lifetime (typically 40 years) decreasing by 20-40% by the end of the century.  This could be particularly damaging for countries with older grids. In the United States, more than 70% of large power transformers are already older than 25 years. When high temperatures coincide with drought conditions, the stress on various electric grid components are even more intense.

Extreme temperatures may further cause overheating and insulation failure in substation switchgears. Freezing temperatures, on the other hand, can result in leakage of SF6 gas  or oil inside switchgears due to the pressure from the weight of snow and ice. Capacity and degradation impacts on substation equipment is the highest for the high emissions scenario of RCP 8.5 (> 4°C). 

There is a high likelihood of increase in precipitation intensity by 2050 compared to 2015

Higher atmospheric moisture content driven by increasing temperatures may cause heavy precipitation, resulting in floods and landslides. Moreover, heavy precipitation can cause flooding in low lying areas, damaging ground level substations, transformers, switchgears, and control equipment. Water inundation can damage substation equipment and cause faster ageing of electric poles. Coastal grid infrastructures will be further impacted by rising sea levels and increased storm levels accompanying climate change. Ultimately, power generation plants and substations may have to be relocated from coastal areas. In other parts of the world, severe heatwaves could reduce thermal conductivity. This may necessitate the derating of underground cables. 

Tropical cyclone intensities and maximum wind speeds are likely to increase

Climate change is likely to increase peak wind intensity and duration of sustained winds.  Strong gusts of winds can cause tower and conductor damage, as well as damage from falling trees. Hurricane Ida damaged more than 30,000 poles and spans of wire and close to 6,000 transformers.  High wind penetration could also result in transformer instability and voltage fluctuations due to reverse power flow of transformers. Sea level rise due to increasing frequency and severity of hurricanes and surge storms can result in an increased exposure of power substations to inundation.

The regions most impacted by some of these severe climatic event such as extreme heat, heavy precipitation and wind intensity have been highlighted

Adaptation and mitigation strategies

To better adapt to climate change, planners can consider:

Resilience through better operations and design

Retrofitting and redesigning will increase resilience to climate change. For example, new substations could have permanent flood protection structures built around them. Substations can be built on higher ground within flood prone areas. Standards such as design flood elevation (DFE) can be utilised for equipment elevation requirements. Degraded equipment should be replaced with stronger and more weather-proof structures. Ageing transformers can be replaced with higher capacity units along with increased capacity of the cooling systems. Heat resistant coating on electric poles can reduce probability of catching fire.  There are innovative solutions in play; German engineering firm Siemens has demonstrated how compressed air-insulated substation components will be able to withstand temperature extremes.  Similarly, Hitachi Energy advocates for the design of underground substations in urban centers for both compactness and safety from nat cat events. 

Resilience through robust data and analytics

Infrastructure datasets should clearly indicate the degree of exposure , sensitivity , and vulnerability  of electric grid components. This can include supervisory control and data acquisition (SCADA) temperature monitoring for substations. Operators can further superimpose different datasets to identify potential climate vulnerabilities, rather than basing future projections on historical assumptions. For example, datasets capturing social vulnerabilities can be superimposed on substation flood exposure to guide investment decisions.  Operators can also use the risks spend efficiency (RSE) metric based on risk reduction benefits measured against estimated cost. If RSE is greater than 1, the investment should pay off.

Resilience through smart innovation

Grids can be made 'intelligent' by incorporating sensors that can detect ambient weather conditions and take decisions autonomously. Battery powered microgrids can isolate arms of the grid experiencing severe weather to prevent more widespread disruption.  Innovative adaptation strategies could also include nature-based solutions such as the "living with water" project by Duke Energy in North Carolina. 38A living shoreline and two acres of established tidal wetland act as temporary flood walls to the substation.

Conclusion

Climate change impacts on weather related hazards - increasing temperature changes, heavy precipitation, sea level rise, inland and coastal flooding and more intense storms - could impact all the components of electric grids at a time when electricity demand is moving sharply upwards. Risk transfer and mitigation, such as the use of insurance products, provide partial solutions. Insurers can be long term protection allies for energy companies by providing them with risk management expertise or tailored insurance solutions to protect against business interruption due to weather events. In the longer run, the resilience of electric grids against climate hazards can only be strengthened through adaptation strategies involving data, design, innovation and investment. This will require participation from all stakeholders- energy and utility companies, re/insurance, and government.