US Public Utilities Lose Approximately US$4.1 Billion Annually Thanks to Damages to Electric Power Transmission System by Extreme Weather

published: 2022-01-24 9:30 | editor: | category: News

Extreme climate disasters such as droughts, wildfires, heavy rains, floods, and snowstorms damage electric power transmission systems. BloombergNEF (BNEF) reports indicate that damages to electrical infrastructures have resulted in US$4.1 billion of losses to public utility providers in the US every year.

BNEF data indicate that about a fifth of power transmission lines worldwide are affected by rising sea levels, hurricanes, wildfires, and storms. In the US alone, 700,000 km of electrical grids are easily susceptible to damages by climate disasters.

In light of natural climate disasters, ratings agencies have downgraded at least nine energy companies’ ratings within the past three years. For instance, PG&E Corp declared bankruptcy under the weight of billions of dollars’ worth of claims payments for damages caused by wildfires in California. Investigators in the state indicate that PG&E Corp’s power transmission lines caused the second severest wildfire in the history of California.

Economic damages dealt by climate change have become increasingly drastic. According to data from BNEF, for the past two decades, climate disasters have resulted in economic losses totaling more than US$2 trillion worldwide, with energy departments bearing the brunt of the impact. For the past five years, hurricanes have also caused damages of more than US$20 billion to power grids in the US. Efforts at adaptive reconstruction cost millions of dollars per mile.

In 2021, Heavy rain and flooding brought about by hurricane Ida launched an onslaught on the eastern US and resulted in at least 95 dead and US$65 billion worth of losses, in addition to the destruction of 207 power transmission lines in Louisiana, which suffered losses of US$2 billion. BNEF technology analyst Xitong Gao indicates that in the past decade, hurricanes have caused billions of dollars of damages to power grids in the US, which needs to construct a grid system that is more distributed, such as micro grids or “behind-the-meter resources”, which enable increased grid flexibility.

 (Image: Flickr/Akuppa John Wigham CC BY 2.0)

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