Study: Climate Change Could Boost Costs, Reduce Reliability of Future Power Systems if Planners Fail to Account for Climate-Induced Impacts

Electricity grid planners design systems to supply electricity reliably and affordably to users. Climate change threatens both objectives because it may compound supply- and demand-side climate-induced impacts. In a new study, researchers developed a modeling framework to analyze potential tradeoffs in planning and operating costs in the power grid due to climate change in the Southeast United States in 2050.

The study found that planning decisions that do not account for climate-induced impacts could result in a significant increase in the costs of energy and a considerable reduction in the reliability of power systems. The findings highlight the importance of considering the effects of climate change in the process of energy planning.

The study was conducted by researchers at Carnegie Mellon University (CMU), the University of Michigan, the University of Wyoming, and the University of Washington. It is published in Environmental Science & Technology.

“Power-system planners must consider many uncertainties to ensure continued availability of reliable and affordable energy,” explains Edson Severnini, associate professor of economics and public policy at CMU’s Heinz College, who coauthored the study. “In the coming decades, amid rising average global temperatures and changes in weather and climate, uncertain climate-induced risks to the power sector may be important to consider.”

Electricity grid planners typically operate according to long timelines, weighing investment costs against operational costs. On the supply side, changes in streamflow could affect the generation of hydropower, and decreased availability of water, along with increased water and air temperatures, could reduce the capacity and efficiency of thermal units. On the demand side, warming temperatures will likely result in changes in electricity consumption used for heating and cooling, which could result in higher total consumption and peak electricity demand. Climate change could also affect wind and solar resources, transmission assets, and other technologies.

In this study, researchers developed a modeling framework that combines physically based models with cost-minimizing optimization models in the power system. Specifically, the authors examined a hypothetical power grid in the Southeast United States in 2050. Researchers simulated 20 climate inputs to gauge the impact of climate-induced events on hourly electricity demand, daily river flows and water temperatures, hydropower potential, and capacity deratings (how much supply is adjusted to account for demand) for thermoelectric power plants.

The study found that planning decisions that do not account for climate-induced impacts could result in a substantial increase in the cost of energy, raising costs almost 150 percent higher than what would occur with decisions that do account for these impacts. The study also found that there are asymmetric costs and benefits for planners in incorporating climate change impacts, largely because planning for climate change that does not happen is relatively less costly.

The authors of the study note some limitations, including that they assumed that future electricity demand would differ from present demand only in terms of climate conditions, not in terms of socioeconomic and technological changes. They also did not consider system vulnerabilities to worsened extreme weather events, such as hurricanes, floods, and wildfires.

“Our study can help system planners and policymakers decide whether to plan for climate change and devise adaptation strategies that anticipate risks,” notes Francisco Ralston Fonseca, an engineer in the Energy Systems and Climate Analysis group at the Electric Power Research Institute, who led the study. “Making decisions today that account for climate-induced effects would be substantially less costly than ignoring these risks.”

The research was funded by the National Science Foundation.

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Summarized from an article in Environmental Science & Technology, Climate-Induced Tradeoffs in Planning and Operating Costs of a Regional Electricity System by Fonseca, FR (Carnegie Mellon University), Craig, M (University of Michigan), Jaramillo, P (Carnegie Mellon University), Bergés, M (Carnegie Mellon University), Severnini, E (Carnegie Mellon University), Loew, A (Carnegie Mellon University), Zhai, H (University of Wyoming), Cheng, Y (University of Washington), Nijssen, B (University of Washington), Voisin, N (University of Washington), and Yearsley, J (University of Washington).Copyright 2021 American Chemical Society. All rights reserved.

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