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The Electric Utility Operators of Tomorrow Need To Be Proactive in The Face of Climate Change

The utility industry is at serious risk from climate change, which is causing more frequent and acute weather events. As a result, we are seeing how the grid infrastructure is becoming increasingly vulnerable to damage.

In February 2021, for instance, a winter storm caused over 4.5 million households to lose power. Hurricane Sandy, in October 2012, was the largest Atlantic hurricane on record in terms of diameter, causing $70 billion in damage and power outages across 21 states. These are just two examples of power outages, but given the reliance on continuous electricity, protecting power infrastructure from environmental damage is critical.

While governments are calling for mutual efforts and planning strategies to hold global warming under 2 degrees Celsius, experts warn that we may see a 1.5 degree spike in the next decade. However, electric utility operators have solutions available to manage climate change issues successfully.

Changing the status-quo

A study by Deloitte shows that the utility industry is having a challenging time keeping up with technological advancements, and it is often considered traditional and lacking in innovation. It is necessary for the industry to change the status quo and adopt a different approach to advance current practices. Rather than following traditional reactive procedures, prioritizing a proactive management strategy is definitely beneficial.

As per McKinsey's research, every dollar invested in building resilient infrastructure saves six dollars in future repair costs. Therefore, adopting a future-thinking strategy can help operators cut costs and reduce disruption due to extreme weather conditions. The majority of electric utility operators are working on building a safer network that can face the consequences of climate change.

One way operators can ensure their grids are ready for unplanned disasters is to organize all grid asset data across the business in one accurate view. Generating a precise digital twin that can predict threats and incorporate suitable safeguards is an effective method of doing so.

By examining the causes of the grid failure during the Texan winter storm, organizations operating in cold weather-prone regions can analyze the patterns of vulnerabilities and implement protective measures to prevent similar incidents. Understanding and gaming possible threat scenarios will help operators respond to and avoid incidents, creating greater network resilience.

Powering backup generators is also an effective way for operators to cope with "black swan events" that are hard to predict, enabling them to continue supplying households with electricity while addressing unexpected issues.

In the context of climate change, being proactive is crucial. By developing a more robust grid, operators can establish themselves as dependable suppliers, thereby reducing customer turnover and gaining substantial competitive advantages, which in turn increases the return on investment for businesses.

Making the use of data for pre-planning

The success of grids is more than just protecting them from future natural disasters; agility can't be overlooked. With the frequency of black swan events unlikely to slow down any time soon, better practices are necessary when it comes to responsiveness to disasters, as well as factual and accurate analyses of disasters.

A precise and live overview of the power grid could result in more calculated response strategies. Staff could effectively assess the data from across the entire business, including weather response and critical response targets.

Chubu Electric Power Grid in Japan is an excellent illustration of this strategy. Due to the region's susceptibility to natural disasters such as typhoons and earthquakes, Chubu developed a Disaster Recovery Information Sharing System (DRISS) that tracks disasters as they occur and determines the most effective plan of action. By creating a shared database comprising all operational data, Chubu not only enables field teams to be equipped with the necessary equipment and resources to respond to disasters effectively, but also to respond more promptly, alerting the closest teams and determining the most efficient route to the signal.

Developing an effective disaster response plan is crucial to reduce grid outages, improve reliability, and achieve business goals such as acquiring new customers, loyalty, and revenue targets.

To effectively address expected and unexpected interruptions, managers should create a shared dashboard of physical grid assets. Being proactive in such scenarios is critical, as failing to respond promptly can result in significant social and economic repercussions. Prioritizing proper planning of disaster response is the first step for businesses that want to obtain a market advantage.

Funding opportunities for grids updates

Electric utility providers can gain a first-mover advantage and build a resilient, future-proof network by promptly establishing an anticipatory grid control plan. The US government has committed $1 trillion to infrastructure with the goal of mitigating the effects of climate change. This demonstrates that operators who seize the moment can take advantage of funding opportunities. The Office of Electricity Delivery and Energy Reliability has already supervised 330 Recovery Act initiatives to create a smart grid and update the electrical power distribution network. Operators who reject traditional industry practices will be best positioned to reap rewards from this financing, using it to acquire an in-depth understanding of their system, future-proof their infrastructure, and develop effective disaster recovery schemes.

The current goal of generating 100% carbon-free electricity by 2035 explains the significant investment seen in the sector. Achieving this goal will require new technologies and enhancements throughout the entire industry. Electric utility operators who accept this reality and use public and private funds to develop a robust electric grid will be at the forefront of leading us towards a greener and more sustainable future.

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