Lighting the Way to Climate Resilience: Challenges and Opportunities for the Energy Sector

April 28, 2022 Dawen Nozdryn-Plotnicki

Charged Atmosphere

The Stockholm Resilience Centre, an international research centre focused on resilience and sustainability science, defines resilience as the “capacity of a system, be it an individual, a forest, a city or an economy, to deal with change and continue to develop. It’s about how humans and nature can use shocks and disturbances like a financial crisis or climate change to spur renewal and innovative thinking.” Or, more succinctly put, “the capacity to deal with change and continue to develop.”

In recent years, “change” has been on full and fearsome display, with extreme climate events around the world, a global pandemic, and geopolitical uncertainties making headlines on a regular basis. And the costs—human, environmental, financial, and societal—have been significant.

In this atmosphere, electrical utilities and the power sector at large are challenged to safeguard and evolve the resilience of their systems, developing the ability to anticipate, absorb, and recover from the consequences of hazardous events. As a result, operators are executing multi-pronged strategies—pursuing decarbonization and a zero-carbon grid, ramping up renewable sources, protecting assets from climate-related events, and defending against cybersecurity threats—while continuing to deliver safe, reliable, and affordable energy to customers.

Challenges & Opportunities

No continent has been immune to climate-related disaster in recent years, with widespread flooding, wildfires, extreme storms, record temperatures, and rising sea levels reported around the world. In 2021, the US experienced 20 separate billion-dollar climate disasters, and while that number wasn’t the highest (2020 holds the record with 22 events), it stands out because of the unprecedented diversity of these disasters. Heatwaves, wildfires, hurricanes, floods, and tornadoes impacted areas that are home to more than 40% of the population across the US, according to a Washington Post analysis of federal disaster declarations.

Power systems conceived and built for 20th century demands are under increasing pressure to transform. In a recent report, the International Energy Agency acknowledges that these increasing anomalies in climate patterns already pose a significant challenge to electricity systems, with extreme weather-related events contributing to 90% of large-scale outages (those affecting 50,000+ customers) over the last 20 years.

Governments, regulators, and investors are moving rapidly to adopt more progressive climate policy, while customers, shareholders, and employees advocate for change. Under this extraordinary level of scrutiny, industry is under pressure to upgrade and protect existing infrastructure, develop and adopt innovative technology, and demonstrate that they are making the right investments at the right time.

In the Black & Veatch 2021-2022 Electric Report, 500 power sector stakeholders provided insights on the challenges and opportunities for utilities and power developers across the US, and how the pursuit of sustainability, reliability, and resiliency is driving transformation. The report clearly indicates that renewable energy sources are on the rise, citing a record high of renewable energy in first half of 2021. The US Department of Energy predicts that solar energy could account for 40% of the country’s electricity by 2035. This type of technological advancement, coupled with trillions of dollars of public and private sector investment aimed at decarbonization efforts in the US and globally, provide utilities and stakeholders throughout the energy production ecosystem with difficult decisions:

What combination of investments will best achieve financial, environmental, and societal goals? How, in this shifting landscape, to strike the right balance between innovation and sustainment? How best to optimize capital plans to deliver on corporate strategy and move the needle on climate resilience?

Informed Decisions

Navigating the path forward is no easy feat. To upkeep and transform tens of thousands to millions of assets, power providers must make investment choices that meet both the needs of today and the demands of tomorrow—all while the sector undergoes a seismic shift in how power is generated and delivered. At this critical juncture, careful long-term planning fueled by accurate risk analysis and modeling is key to utilities’ success.

If you can’t measure it, you can’t manage it; so, the majority of respondents to our survey are looking to risk analysis and modelling to help prioritize resilience projects... helping identify the optimum balance between cost and risk.

And just as the current environmental challenges threaten critical physical infrastructure, the tools and strategies that have been historically used to assess risk and manage assets across the power delivery ecosystem are also being pushed beyond their limits. To solve the problems of tomorrow, organizations are looking to more sophisticated, integrated systems to chart the safest, most reliable, and innovative path forward.

The 2022 Megatrends in Power report sponsored by Black & Veatch and Clarion Energy examines four trends they predict will dominate the next decade of the energy ecosystem evolution, from decarbonization and electrification to energy transformation and climate adaptation. Of the 216 power sector respondents, more than 70% are looking to risk analysis and modeling tools both to guide decision making and justify investment choices to regulators and stakeholders.

Planning for the Short, Medium & Long-term

While energy providers share net-zero ambitions and aggressive targets in the clean energy transformation, they also face unique challenges based on geography, customer needs and demands, specific weather challenges, and their own operational targets. To meet these diverse demands, power providers need a robust decision support solution to help them develop plans that will reduce vulnerability, enable innovation, ensure reliability, and meet cost and resource constraints.

For over a decade, Copperleaf® has been helping clients proactively manage risk exposure, improve planning efficiency, allocate funding and resources with confidence, and execute corporate strategy. Copperleaf’s powerful, decision analytics solutions rely on a robust value framework to ensure consistent decision making across an organization—making clear to employees, customers, executives, regulators, shareholders, and other stakeholders how day-to-day decisions support strategic objectives. Copperleaf’s solutions truly support multi-dimensional decision making, enabling organizations to quantify the impact of investments on the environment and community, and create optimal plans that drive their strategic goals—while meeting all constraints and targets.

In the next two articles in this series, we’ll explore how our solutions can help accomplish this complex feat—from the Copperleaf Value Framework to asset management and predictive analytics, to investment portfolio optimization, and tracking and reporting capabilities.

In the meantime, check out this video to learn how some of our customers are leveraging Copperleaf solutions to achieve and exceed their long-term planning objectives.

 

 

 

About the Author

Dawen Nozdryn-Plotnicki

Dawen is Copperleaf's Managing Director, Americas. She has expertise in building high-performing teams and creating products that put the power of data science into the hands of non-data geeks. Together with her management consulting and computer science background, her focus has always been on bridging technology with business needs to deliver tangible results to clients.

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