All about energy resiliency: How different countries are adapting to extreme weather
September 19, 2022
Extreme weather impacts all of us. How are people around the world adapting and working towards resiliency?
When we talk about weather, we often think of the most recent storm or heatwave that just rolled through. But it¡¯s important to shift our focus to changes in weather patterns. In other words, climate change. The energy and resources industry relies on infrastructure that is affected by a changing climate. This includes powerlines that fail due to high winds, hydroelectric facilities with reservoirs that are drying up, oil and gas facilities where compressors stop working due to icing, or mining sites in areas of extreme heat.
We talked to Climate Solutions Leaders around the world to see how different countries are adapting to extreme weather.
How is extreme weather affecting the energy & resources market?
Europe
Over these past few years, we¡¯ve increasingly seen extreme weather events causing a great deal of stress or damage to our electricity systems. This has made it difficult to ensure continuous security of supply. Last year, when unprecedented floods hit several European countries simultaneously, hundreds of thousands of households were left without power. It took weeks¡ªeven months¡ªto restore power in some cities. More than 200 lives were lost. This is what¡¯s most alarming about extreme weather¡ªit kills. It¡¯s fatal to people, livelihoods, environments, and businesses.
We¡¯re already experiencing how heat waves and storms can create deep imbalances between energy supply and demand. This leads to higher energy costs and affects the price of food, basic commodities, and the cost of living.
Another concern is how it impacts our renewable energy sources. Unfortunately, renewables are vulnerable to weather. If there¡¯s a drought, hydropower resources may be affected. Heat waves are tied to decreased wind speeds, resulting in diminished output from wind energy facilities. The same goes for solar panels and windmills when there¡¯s a sudden storm. Unpredictable weather makes it harder to produce and manage renewable energy. When that happens, we¡¯re forced to use coal and gas. It creates a vicious cycle¡ªwe¡¯re pushed back to the same habits that are causing the problem in the first place
Extreme weather is affecting countries around the world. Last year, when unprecedented floods hit several European countries simultaneously, hundreds of thousands of households were left without power.
Australia and New Zealand
Extreme weather is common in Australia and New Zealand. Recently, floods, bushfire, heat waves, and droughts have highlighted changes in our weather patterns. The mining industry is no stranger to working in harsh environments. But climate change has made these weather events more frequent and erratic. Extreme weather can impact production volumes and lead to losses of equipment and facilities.
As energy markets move towards more renewable energy sources, reliability has also come into question. In June, the Australian Energy Market Operator suspended the spot market for days to ensure a reliable support of energy to customers. New Zealand also faced similar energy shortages due to high winter demands and lower generation than expected.
What are the most urgent steps that need to be taken?
United States
The energy and resources industry supports critical infrastructure that we rely on for basic materials and services. Therefore, reliability is paramount. We need to focus on the best ways to harden existing infrastructure to address the frequency and severity of future weather events. Because there is no one-size-fits-all-approach, determining the best path forward starts with a conversation about conducting a climate change risk assessment. That conversation may go in a different direction for a mining company than for a power company or an oil and gas company.
Europe
Building resilience. Over the years, we¡¯ve learned to redesign our public spaces and infrastructure with climate resilience in mind. But we need to do more to make our energy systems more efficient and more resilient. One way is to increase the interconnection of electricity systems between countries and regions to allow for greater power sharing. This is already happening on a regional level in some parts of the world. But we can take it a step further to an international level. The bigger the market, the larger our shared supply, and the better we can manage demand.
We also need to see more counteraction against climate change. Human beings are incredibly adaptable. But if we get too comfortable adapting, we might start neglecting our responsibility to reduce our carbon footprint. Let¡¯s treat the symptoms but address the cause at the same time. Energy efficiency is paramount for all of us. We all have to find new ways of reducing our consumption and doing more with less. Business leaders can make it their mission to help their companies, clients, and communities integrate this way of working and living.
Australia and New Zealand
Our energy markets are positioned differently, with New Zealand already geared significantly more towards renewable sources. There is significant action towards the energy transition in Australia, with many wind, solar, and hydrogen projects in the pipeline.
As the recent power shortages have shown though, both countries need to have a strong focus on reliability of the network. They also need to review the energy market to ensure a model works with the broader mix of energy sources.
New Zealand utilizes a significant amount of renewable energy.
What are the biggest challenges hindering action?
United States
Challenges in the US include accessing funding sources to pay for modifications, getting community and stakeholder support, and getting upgrades permitted. A good example is Dominion Energy. They are one of our clients and have been undergrounding the most storm-threatened portions of their distribution system for the past seven years. And because these facilities are located on private property, owner approval is often necessary before upgrades can proceed.
We¡¯re seeing similar trends across the energy and resource industry. Oil and gas companies are making long-term investments to harden coastal refineries. And mining companies are looking at water supplies while also thinking about how to decarbonize their operations.
Europe
Aligning policies to boost private sector engagement. Most projects necessary to address this global challenge are not the type of projects that investors normally find attractive or profitable. But we desperately need their support. Policies should be redesigned to make those investments more attractive and to create processes that will support multi-stakeholder partnerships.?
There¡¯s also the need for rethinking systems. We need to develop new technologies, new value chains, and new business models. We must work together to build adaptable systems. This requires aligning mentalities and getting public and private entities to think longer term. These things don¡¯t happen overnight.?
Australia and New Zealand
With expansive networks, connectivity into the national grid is a key challenge for renewable projects. Also, sources such as solar and wind rely on weather conditions. This can pose challenges in meeting supply requirements.
A common struggle with renewable energy around the world is meeting demand. Renewable solutions like solar and wind depend on specific weather conditions.
What are different countries doing to address the impacts of extreme weather??
United States
In the US, energy and resources companies are investing billions of dollars to harden their infrastructure. In the power business, there is an understanding that extreme weather events often result in major power outages, potential loss of life, and lost economic activity. We saw all these effects from Super Storm Sandy and Hurricane Katrina. The impacts of these storms are often felt for years¡ªsometimes decades. For example, Puerto Rico is still rebuilding its energy infrastructure after the Category 5 Hurricane Maria devastated the island in 2017.
Disruptions to the gulf stream have also resulted in polar vortexes where extreme cold can settle into the southern US. Or extreme and unseasonable heatwaves can extend into the north. These events affect gas and electricity supplies, as in the blackout/power crisis in Texas in 2021. In some cases, utility companies are becoming their own weather companies. They¡¯re installing advanced meteorological equipment and employing consultants to help them select which infrastructure to harden. This monitoring can also help them decide when to shut systems down to avoid damage.
For publicly traded companies, climate change risk means new annual reporting requirements. In the US, the Securities and Exchange Commission is creating climate disclosure rules¡ªand companies will need to comply with these rules. As a result, these regulations will likely increase the urgency for company owners to show investors they¡¯ve made progress on net zero goals.
When we think about energy and resources and extreme weather, it¡¯s easy to focus more on the ¡°energy¡± component. Though mining underpins all of our energy generation and transferring. This photo shows cross sections of high voltage power lines. They all contain metal, which needs to be mined.
Europe
Since the 1990s, the European Union has been implementing environmental protection and sustainable development policies. Recently, we¡¯ve seen even more aggressive climate-related policies and action through the European Green Deal. This deal aims to reduce greenhouse gas emissions in Europe and achieve climate neutrality by 2050.
A large part of our work in the region involves initiatives on environmental conservation, sustainability, sustainable development goals, energy efficiency, and climate resilience. One example is the LIFE program that provides the EU funding for environment and climate action in Europe. In the Netherlands, they redesigned river systems to make them more adaptable to rising water levels. This was vital because one-third of their country is below sea level. In Italy, they¡¯re also working on several environmental monitoring and design projects, making public places more climate proof.
We must remember that climate and environmental projects involve ambitious goals that require intense cooperation to succeed. We won¡¯t make progress unless people are willing to talk to each other, find common ground, and work together.