IMPACTS OF CLIMATE AND EXTREME WEATHER ON

ENERGY INFRASTRUCTURE

Eric WilliamsEnergy / Environmental EconomistInternational Atomic Energy Agency

OVERVIEW Climate change (CC) & extreme weather event (EWE) impacts on energy system Economic impacts of CC & EWE in the energy sector

CC & EWE Climate change (CC) = changes in mean and variability over decades: Temperature Precipitation Wind patterns Insolation Sea level rise

Extreme weather events (EWE) = event near the upper or lower end of the range of observed values (frequency, intensity, timing) of: High/low temperature & precipitation High winds/storms Hail Lightning, etc.

CC & EWE IMPACTS ON ENERGY SYSTEM

Extraction/Resource Transport Conversio

n

Transmission &

Distribution

EXTRACTION/RESOURCE Coal and Uranium: flooding open-pit mines dust from coal stockpiles

Oil & gas: melting permafrost -> destabilizing equipment

sea level rise: inundating coastal and offshore sites

See level rise + winds: damage to onshore wells and offshore platforms

Hydro: higher evaporation losses changes in water availability

Wind: changes in wind resource

Solar: changes in insolation

TRANSPORT FROM SOURCE TO CONVERSION Ocean-going ships: Less sea-ice = more opportunities for passage Sea-level rise may affect ports and limit options for large vessels

Inland ships: Difficult passage for extreme low and extreme high water levels

Rail & roads: Freeze-thaw cycle leads to damage High temp: tracks deform; roads soften Low temp: RR switches freeze; roads crack

Pipelines: Low temp: can weaken/damage pipelines High temp: increased corrosion and greater energy requirements for

compression

CONVERSION: THERMAL CC: temps increase thermal efficiency decreases by 0.1 to 0.2% per 1 C° increase cooling efficiency decreases: capacity loss of 1 – 2% per 1 C°

increase

CC + EWE: Extreme temp: larger efficiency loss and cooling challenge Drought: even less and warmer cooling water Temp & drought: acute cooling problem Winds: can damage cooling towers

CONVERSION: NUCLEAR CC: same as thermal Temps go up, thermal and cooling efficiency goes down

CC + EWE: Nuclear is a special case because of safety concerns related to EWEs

Although Fukushima was not climate- or weather-related, it highlighted the vulnerability of nuclear plants to events that were not considered in design and construction

CONVERSION: NUCLEAR CC + EWE: Nuclear plants are built to withstand 50- to 100-year extreme weather events, but as climate changes, past events may not predict the severity of future events

Nuclear plants are very complicated systems; many kinds of EWEs, when combined with an unknown design or construction flaw, can trigger safety systems and force a shutdown Most nuclear plants rely on active safety systems powered by diesel generators; worst case scenario: an EWE forces a reactor shutdown while simultaneously, disrupting back up generators and grid interconnects

CONVERSION: NUCLEAR Lightning: can short-circuit instrumentation, back-up gen connection, grid connection High winds: wind-generated missiles can damage buildings, back-up gen, knock out grid connection Extreme cold: ice clogging water cooling intake Extreme heat: if water for cooling is too hot, can force shutdown Flooding: coastal plants vulnerable to storm surge; inland plants vulnerable to river flooding; safety systems can be damaged

CONVERSION: NUCLEAR Storm surges and sea-level rise in 2050:Key:

Green: no flooding Yellow: potential flooding Orange: considerable

flooding Red: Site inundation Grey: no data

Source: Kopytko 2007

St.

Lucie

Crystal

River

Turkey

Point

Sea-

Brook

Pil-

grim

Mill-

stone

Calvert

Cliffs

Sea Level Rise

Nor’easter

Category I Low

Category I High

Category II

Category III

Category IV Low

Category IV High

Category V

CONVERSION: NUCLEAR IAEA’s International Reporting System (IRS) 88% of CC/EWE events affect 3

major systems Water cooling: 28% Electrical control systems: 27% Transmission grid: 32% Remainder of events were general (e.g.

flooding)

From 1980 – 1999, events are balanced between lightning (33%), winds (33%), and freezing (30%)

In the 2000s, heat related events began to appear

CONVERSION: OIL & GAS REFINERIES

CC: sea level rise inundating coastal refineries CC + EWE: Precipitation: flooding refineries Winds: physical damage Lightning: structural damage; fires

CONVERSION: HYDRO CC: Lower precipitation = lower long-term capacity and output

CONVERSION: HYDRO CC + EWE: Flooding: structural damage to dam wall or turbines from water force and debris

Flooding + winds: waves causing dam overflow

CONVERSION: WIND CC: Changes in the spatio-temporal wind resource distribution; mean wind power densities over Europe and NA likely within ±50% of current values

Less frequent icing with increasing tempLower precipitation: more dust depositionSea level rise: inundating coastal and offshore sites

CONVERSION: WIND CC + EWE: Winds: structural damage Low temps + precipitation: ice formation on blades reducing efficiency; structural damage

Lightning: structural damage

CONVERSION: SOLAR CC: Increasing temp: lower PV and CSP efficiency

Changes in cloudiness and average insolation

CC + EWE: Increased precipitation, high winds, hail and high temperatures can each damage PV and CSP

Drought + winds: more sand and dust deposited on collectors, reducing efficiency of PV and CSP

TRANSMISSION & DISTRIBUTION Rail, road, inland waterways,

pipelines: same issues as transport from source to conversion Electric grid: CC: decreasing transmission efficiency of 0.4% per 1 C° increase

CC + EWE: High temp: lines and transformers overheat, capacity

declines & outages Low temp: ice -> damage & outages Lightning: damage & outages Winds: damage & outages Flooding: damage & outages

ECONOMIC IMPACTS Costs of not adapting Adaptation options Results of economic impact studies

COSTS OF NOT ADAPTING Direct costs: Physical damage to infrastructure Reduced output and outages

e.g. every 24 hours a 1 GW unit is shut down costs the owner $1.2 million (assuming $50/MWh)

Indirect costs: Outages that lead to wider blackouts can impose substantial indirect costs Value of lost load in developed countries ranges from 200 to 960

million euros for a 24 hour blackout (based on lost output for a 1 GW plant) (Nooij et al. 2007, Tol 2007)

Cumulative macroeconomic costs from physical damage, need for additional capacity, outages, etc.

ADAPTATION OPTIONS Investments in adaptation can avoid or mitigate some costs Options too numerous to catalogue here General approaches fall within 3 categoriesPhysical protection

e.g. building sea walls and other earthworks to protect coastal energy infrastructure from sea-level rise and storm surges

Alternative technologies e.g. dry cooling for thermal power plants

Alternative operational strategies e.g. sophisticated computer modeling to better manage hydropower resources under changing rainfall patterns

CC: DECENT COVERAGE IN STUDIES

○ = not modelled● = modelled Wind Solar Hydro Thermal Nuclear Grid Coal

Oil & Gas

Higher mean temperatures* ○ ○ ○ ● ● ● ○

Changes in rainfall patterns

● ● ●

Changes in wind patterns ●

Changes in average insolation

●

CGE STUDIES: PRIMARILY GRADUAL CLIMATE CHANGE GDP impacts in most studies on the order of -1% in 2050+ but up to -3% With some assumptions about adaptation investments, studies find that GDP impacts can be close to zeroNot based on specific adaptation measures, so these results are questionable

Warmer regions tend to have a greater impact than cooler regions

PARTIAL EQUILIBRIUM STUDIES: CC Results not in terms of GDP, but mostly consistent with CGE results when examining longer-term gradual climate change ~1% increase in electricity demand in warmer countries

~1% decrease in demand in cooler countries

MODELING EXTREME WEATHER EVENTS Extreme weather events occur with a low probability (perhaps increasing with CC) and are difficult to model One approach is to make a general assumption about aggregate impacts of extreme weather Done in one study (Jochem and Schade et al. 2009)

Another approach is to develop probabilities of events with varying intensity and corresponding damages and include them stochastically within a detailed technology-based energy model To date, this approach has not been taken

EWE: VERY LIMITED COVERAGE

○ = not modelled● = modelled Wind Solar Hydro Thermal Nuclear Grid Coal

Oil & Gas

Lightning ○ ○ ○ ○ ○ ○High winds ○ ○ ○ ○ ○ ○Hailstorms ○

Sand storms and dust ○ ○ ○

Extreme cold ○ ○ ○ ○ ○

Extreme heat* ○ ○ ● ● ● ● ○ ○Floods ○ ○ ○ ○ ○ ○

Drought ● ● ● ○

Sea-level rise ○ ○ ○ ○

PARTIAL EQUILIBRIUM MODELS: EWE More significant impacts with extreme weatherElectricity prices in Nordic countries can double over a 2 year period during a hypothetical water shortage scenario (Bye et al. 2006)

A drought scenario in the US southwest can lead to average monthly electricity prices that are 8% (November) to 24% (July) higher (DOE/NETL 2009)

Boyd and Ibarraran 2009 evaluate drought scenarios in Mexico and find that in 2026 generation output declines -2.1% but with adaptation can increase by 0.24%

LIMITED STUDIES FOR DEVELOPING COUNTRIES Only a couple of studies of the impacts of climate change and extreme weather in developing countries Lucena et al. 2010 model reduced hydropower from altered rainfall and rising temps that affect thermal efficiency and energy demand CCEWE lead to needing an addition 153 to 162 TWh of electricity per year

Capital investment needed to cover generation amounts to $48 to $51 billion … equivalent to 10 years of capital expenditures in Brazil’s long-term energy plan

An additional ~$7 billion per year also needed for operating expenses

Boyd and Ibarraran 2009 evaluate drought scenarios in Mexico and find that in 2026 generation output declines -2.1% but with adaptation can increase by 0.24%

OVERALL CONCLUSIONS CC: mostly affects the resource base of renewables CC: the impacts on thermal and rest of supply chain are not severe CC + EWE: the impacts can be severe throughout energy supply chain Although nuclear is generally resilient, the safety concerns posed by EWEs must be taken seriously

The costs of CC + EWE have not been adequately evaluated, particularly EWEs The limited studies on EWEs suggest that impacts can be significant

Few studies have been done on the CC + EWE impacts on the energy sector in the most vulnerable regions in the world

LOOKING AHEAD IAEA has begun a coordinated research project with institutions in: Argentina Cuba Egypt China Ghana Pakistan Slovenia Sudan

Goal of the research is to identify vulnerabilities of energy infrastructure in each country as well as cost-effective adaptation options

THANK YOU!Eric Williamseric.lee.williams@gmail.com

EXTRA SLIDES

Study

Model Type Climate Impacts Modeled Energy/Economic Impacts

Regions

Sectors Studied

Bosello et al. 2009 IAM

Rising temperatures/ changing demand for energy; impacts from 4 other sectors/events (Global, 2001 - 2050)

Change in GDP in 2050 due to rising temperatures and changing energy demand: 0% to 0.75% (+1.2°C); -0.1% to 1.2% (+3.1°C) 14 4

Jorgenson et al. 2004 CGE

Rising temperatures/ changing demand for energy; climate impacts from 3 other sectors (USA, 2000 - 2100)

Optimistic adaptation: 4% to 6.7% higher energy productivity per year (2000 – 2100); Output from electricity: -6% in 2050; GDP is +0.7% (aggregate all sectors, avg annual 2000 – 2100)Pessimistic adaptation: 0.5% to 2.2% lower energy productivity per year; Output from electricity: +2% in 2050; GDP is -0.6% (aggregate impact all sectors) 1 35

Bosello et al. 2007 CGE

Rising temperatures/ changing demand for energy (Global, 2050)

Change in GDP in 2050 (perfect competition): -0.297% to 0.027%; Change in GDP in 2050 (imperfect competition): -0.303% to 0.027% 8 1

Aaheim et al. 2009 CGE

Change in precipitation -> share of hydro power; rising temperatures/ changing demand for energy ; impacts from 4 other sectors (Western Europe, 2071 – 2100)

Impact from all sectors in 2100: GDP in cooler regions: -1% to -0.25%GDP in warmer regions: -3% to -0.5%Adaptation can mitigate 80% to 85% of economic impact 8 11

Boyd and Ibarraran 2009 CGE

Drought scenario affecting hydro plus 3 other sectors (Mexico, 2005 - 2026)

Generation output in 2026: -2.1%Refining output: -10.1%Coal output: -7.8%NG output: -2%Crude oil output: +1.7%GDP: -3%

With adaptation: Generation output in 2026: 0.24%%Refining output: 1.36%%Coal output: 1.09%%NG output: 0.34%%Crude oil output: 0.22%GDP: 0.33%  1 2 

Jochem and Schade et al. 2009

PE/CGE

Rising temperatures/ changing demand for energy; Change in technical potential of renewables; Change in rainfall -> change in hydro; High temperatures -> water temperatures exceeding regulatory limits (Europe); High temperatures -> greater electric grid losses and lower thermal efficiency; generic extreme events -> reduced capital stock in CGE model (EU27+2, 2005 – 2050)

GDP (Europe): -50 billion € p.a. in 2035GDP (Europe): -240 billion € p.a. in 2050GDP (EU regions): -0.1% to -0.4% in 2035GDP (EU regions): -0.6% to -1.3% in 2050Jobs (Europe): -380K in 2035Jobs (Europe): -1 million in 2050  25 1 

Eboli et al. 2010 CGE

Rising temperatures/ changing demand for energy; climate impacts in 4 other sectors modeled (Global, 2002 - 2100)

By 2100, change in GDP due to climate impacts on energy demand vary by country between ~ -0.15% and 0.7%. USA and Japan were negative and all other countries positive. Overall economic impact from all sectors is neutral to positive for developed countries and negative for developing. 8 17

Bosello et al 2012 CGE

Increase of temperature by 1.92 degrees C by 2050 compared to pre-industrial levels; increase in energy demand due to need for cooling (Global, 2050)

Global GDP losses amount to about 0.25% compared to no climate change  Regional GDP impacts vary from approximately -0.2% (Middle East) to 0.3% (India and South Asia). Increase in energy demand via demand for cooling worsens trade balance in Mediterranean Europe because of dependence on energy imports.. 14 7

Gonseth and Vielle 2012 CGE

Rising temperatures -> changing demand for energy -> decrease in energy consumption for heating (-14.6% for all sectors), consumption for cooling increases (0.4TWh for housing sector, 0.6 TWh for service sector); extreme heat -> forced decrease in operation or shut down of nuclear, reduced access to cooling water; increased temperature -> reduction in thermal power plant’s efficiency; change in runoff for hydro due to changing rainfall patterns (Switzerland, 2000 – 2050) 

Result of decreased heating and increased cooling:  Energy consumption: Petroleum products -3.7%Natural gas -2.6%Electricity 1.5% GDP: 0.2% Reduction in nuclear output in 2050 due to extreme heat: 4.4% Decrease in electricity production from TPP due to higher temperatures: 432 GWh; partially compensated by increase in renewables: 320GWh; final impact: price of electricity up 0.3% and negligible welfare loss of 9 million USD hydro generation declines 816 GWh -> increased natural gas and renewables -> increase in electricity price of 0.1%; negligible welfare losses 5 million USD 6 (1)

28 (5

related to

energy)

Lucena et al. 2010 PE

Changing precipitation -> Change in hydro production; rising temp -> lower NG thermal efficiency; rising temperature -> change in demand for energy

New generating capacity needed to produce additional 153 – 162 TWh.Capital investment of $48 to $51 billion, which is equivalent to 10 years of capital expenditures in Brazil’s long-term energy plan.$6.9 to $7.2 billion in additional operating expenses in years with worst-case hydro production 1 11

Golombek et al. 2011 PE

Rising temperatures/ changing demand for energy; Rising temp/ reduced thermal efficiency; change in water inflow (Western Europe, 2030)

Net impact on the price of electricity is a 1% increase. Generation decreases by 4% 13 4

Bye et al. 2006 PE

Water shortages (Nordic countries, hypothetical 2 year period)

Water shortage scenarios can lead to a 100% increase in electricity prices at peak demand over a 2 year period. Higher prices lead to marginal reductions in demand (~ 1% - 2.25%). 4 1

Koch et al. 2012 PE

High temperatures -> water temperatures exceeding regulatory limits (Berlin, 2010 - 2050)

Thermal plant outages amounting to 60 million EURO for plants in Berlin through 2050 1 1

Gabrielsen et al. 2005

Econometric

Rising temperatures/ changing demand for energy; change in water inflow; change in wind speeds (Nordic countries, 2000 - 2040)

Net change in electricity supply in 2040: 1.8%. Change in electricity demand: 1.4%. Change in electricity price: -1.0% 4 1

DOE/NETL 2009 PE

Drought scenario (Western Electric Coordinating Council, USA, 2010 – 2020)

In 2020, 3.7% reduction in coal generation; 43.4% increase in NG gen; 29.3% reduction in hydro gen. Production cost increase of $3.5 billion. Average monthly electricity prices up 8.1% (Nov) to 24.1% (Jul). 1 1

UNDP 2011 PE

Damage Case 1 (DC1): Hotter in Both Winter and Summer – Decreased demand for heating and increased demand for cooling;Damage Case 2 (DC2): Colder in Both Winter and Summer – Increased demand for heating and decreased demand for cooling,;Damage Case 3 (DC3): Colder in the Winter and Hotter in the Summer – Increased demand for heating and increased demand for cooling.(Macedonia, 2009 – 2030)   

 Change in electricity demand in residential and commercial sectors:DC1: 3.5%DC2: 0,3%DC3: 8% Change in electricity system cost: DC1: 0,8%DC2: 0.06%DC3: 1.74%  9 5