There’s no shortage of “resilience” talk in the energy industry, but it hasn’t always been that way.
Over the last 30 years, the transition away from centralized energy infrastructure, global climate events like the devastating hurricanes of 2017, extreme volatility in the cost of fossil fuels, and a growing demand for renewable energy have shaped an unfamiliar theoretical term into not only a buzzword but a cornerstone of infrastructure planning.
Resilience 101: Where we’ve been
Thirty years ago, the concept of resilience held a very different and less pressing connotation than it does today. Actual energy generation looked different: Power was generated at centralized power plants by heavy machinery, protected from weather elements inside large buildings.
Following the New York blackout of 1965, utilities and regulators realized the growing complexity of the nation’s electric system required a more stringent set of standards. In response, the North American Electric Reliability Council was formed to develop standards that required energy infrastructure to be built to withstand extreme weather conditions and included additional redundancy and controls to ensure energy reliability and responsiveness. The concept of resilience was baked into utility regulations and therefore was seldom discussed.
The definition of resiliency changed with the oil embargo of the 1970s, when oil supplies were limited and prices spiked, causing the realization within the industry that our electricity supply was dependent on fuel sources and costs we couldn’t control. In search of alternatives, utilities turned to domestic coal, nuclear power and natural gas. Within a decade, the electricity supply’s dependence on imported oil was sharply reduced, making the electricity supply more resilient to fluctuating costs.
Alongside increased dependence on nuclear power, an accident at the Three Mile Island Nuclear Generating Station in 1979 raised new concerns about the resilience of the nuclear fleet. Subsequently, the Nuclear Regulatory Commission adopted new rules and requirements that would make the design, construction and operation of nuclear plants more responsive to unplanned events. These changes did impose increased costs on nuclear plan operations, which have posed challenges to the economics of the nuclear industry ever since.
During the ‘80s and ‘90s, many U.S. states restructured or deregulated their utility models and allowed non-utility energy providers, known as independent power producers (IPPs), to sell electricity to both utilities and consumers in an effort to combat creeping retail energy prices. IPPs were built in decentralized locations responding directly to economic signals including access to fuel, load and industrial demand.
Within a few years, the industry began to get comfortable with the reality that, like centralized power plants, IPPs could produce reliable power. This ushered in an onslaught of new distributed power plants, built closer to consumers and selling power directly to utilities, which forced utilities to scramble to reinforce transmission lines and protect the grid at distributed locations. Resilience became a bigger topic of conversation within the industry as managers worked to maintain infrastructure under the weight of new production.
In the late ‘90s and early 2000s, power providers began navigating alternative resources such as solar and wind, in addition to nuclear, as a way to reduce environmental emissions and exposure to rising and increasingly volatile oil, natural gas and coal prices. Once again, concerns about energy infrastructure resilience were raised as utilities questioned the reliability and efficiency of the new, intermittent technology and the utilities’ ability to manage the grid. As the renewable industry developed, these concerns receded, and the concept of resilient energy infrastructure was again redefined.
Over the last decade, with the increasing effects of the climate crisis being felt across the world, concerns about resiliency have taken on a new and dire urgency. This time, the problem is proving more challenging to address quickly and effectively.
In the past, the response to an identified weakness — whether it be dependence on foreign oil, reliability of nuclear facilities, or exposure to high-priced fuels — had been identified within a few years and addressed quickly within the following decade. Climate change is proving to be a different challenge: Because the dimensions and scope of climate change continue to expand, the industry has been forced to continually redefine the solution.
With increasingly extreme weather conditions — including extended periods of extreme temperatures, prolonged bouts of rain and drought, and more frequent episodes of intense storms — industry conversations are turning toward resilience as the new goal for energy planning. In 2017, Hurricanes Irma, Harvey and Maria magnified the urgent effects of climate change and the conversation solidified.
Resilience 102: Where we’re going
But despite urgency in conversation, actual progress toward implementation of resilient energy infrastructure has been slow due to competing priorities for cost-effectiveness and short-term solutions to critical and time-sensitive matters.
The good news is we already recognize how to bolster infrastructure resiliency. From replacing wooden power poles with composite beams, to adding distributed renewable power to the energy supply, to building more battery storage and microgrids, many industry leaders agree on the details. On a broader level, industries and governments can envision resilient infrastructure — from higher sidewalk curbs, to higher seawalls, to non-coastal real estate development.
The dialogue around resilience has come a long way over the last 30 years, but the industry has reached a point where conversation is no longer enough. We face a critical inflection point as governments across the country, and around the globe, grapple with urgent and costly decisions about rebuilding energy infrastructure to mitigate or prepare for the damaging effects of climate change. Policy leaders, developers, utility managers and other decision-makers are choosing between cutting costs and building more resilient infrastructure — and at what cost?
In order for stakeholders to make the right choice and take action toward building more resilient infrastructure, stakeholders should include resilience requirements in proposal specifications. Policy leaders should consider baking resilience measures into new clean energy targets. And the industry at large should agree on new guidelines for resilience, whether created anew or simply woven into electricity codes.
With increasingly severe effects of climate change, such as Hurricane Maria, which put Puerto Rico in the dark for nearly 11 months in 2017, and Hurricane Dorian, which recently devastated the Bahamian islands of Abaco and Grand Bahama, there’s no question that there is a resounding cry for resilient energy infrastructure. We all have the responsibility to act now and turn resilience talk into action.
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Bruce Levy is president and CEO of BMR Energy, a Virgin Investments-backed clean energy infrastructure developer in the Caribbean and Latin America.