Electricity Grid Resilience: Climate Change Is Expected to Have Far-reaching Effects and DOE and FERC Should Take Actions
Climate change is expected to affect every aspect of the electricity grid—from generation, transmission, and distribution, to demand for electricity. For example, more frequent droughts and changing rainfall patterns may diminish hydroelectricity in some areas, and increasing wildfires may damage transmission lines.
The Department of Energy and the Federal Energy Regulatory Commission could do more to enhance grid resilience to climate change. We recommended that DOE develop a strategy and coordinate efforts within the department to enhance resilience, and that FERC assess grid climate risks and plan how to promote resilience.
Hurricane Maria Damaged Power Lines in Puerto Rico in November 2017
What GAO Found
Climate change is expected to have far-reaching effects on the electricity grid that could cost billions and could affect every aspect of the grid from generation, transmission, and distribution to demand for electricity, according to several reports GAO reviewed. The type and extent of these effects on the grid will vary by geographic location and other factors. For example, reports GAO reviewed stated that more frequent droughts and changing rainfall patterns may adversely affect hydroelectricity generation in Alaska and the Northwest and Southwest regions of the United States. Further, transmission capacity may be reduced or distribution lines damaged during increasing wildfire activity in some regions due to warmer temperatures and drier conditions. Moreover, climate change effects on the grid could cost utilities and customers billions, including the costs of power outages and infrastructure damage.
Examples of Climate Change Effects on the Electricity Grid
Since 2014, the Department of Energy (DOE) and the Federal Energy Regulatory Commission (FERC) have taken actions to enhance the resilience of the grid. For example, in 2015, DOE established a partnership with 18 utilities to plan for climate change. In 2018, FERC collected information from grid operators on grid resilience and their risks to hazards such as extreme weather. Nevertheless, opportunities exist for DOE and FERC to take additional actions to enhance grid resilience to climate change. For example, DOE identified climate change as a risk to energy infrastructure, including the grid, but it does not have an overall strategy to guide its efforts. GAO's Disaster Resilience Framework states that federal efforts can focus on risk reduction by creating resilience goals and linking those goals to an overarching strategy. Developing and implementing a department-wide strategy that defines goals and measures progress could help prioritize DOE's climate resilience efforts to ensure that resources are targeted effectively. Regarding FERC, it has not taken steps to identify or assess climate change risks to the grid and, therefore, is not well positioned to determine the actions needed to enhance resilience. Risk management involves identifying and assessing risks to understand the likelihood of impacts and their associated consequences. By doing so, FERC could then plan and implement appropriate actions to respond to the risks and achieve its objective of promoting resilience.
Why GAO Did This Study
According to the U.S. Global Change Research Program, changes in the earth's climate are under way and expected to increase, posing risks to the electricity grid that may affect the nation's economic and national security. Annual costs of weather-related power outages total billions of dollars and may increase with climate change, although resilience investments could help address potential effects, according to the research program. Private companies own most of the electricity grid, but the federal government plays a significant role in promoting grid resilience—the ability to adapt to changing conditions; withstand potentially disruptive events; and, if disrupted, to rapidly recover. DOE, the lead agency for grid resilience efforts, conducts research and provides information and technical assistance to industry. FERC reviews mandatory grid reliability standards.
GAO was asked to examine U.S. energy infrastructure resilience. This report describes: (1) potential climate change effects on the electricity grid; and (2) actions DOE and FERC have taken since 2014 to enhance electricity grid resilience to climate change effects, and additional actions these agencies could take. GAO reviewed reports and interviewed agency officials and 55 relevant stakeholders.
Recommendations
GAO is making two recommendations: (1) DOE should develop a department-wide strategy to enhance grid resilience to climate change, and (2) FERC should identify and assess climate change risks to the grid and plan a response. DOE and FERC neither agreed nor disagreed with GAO's recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Energy |
Priority Rec.
The Secretary of Energy should develop and implement a department-wide strategy to coordinate its efforts that defines goals and measures progress to enhance the resilience of the electricity grid to the risks of climate change. (Recommendation 1) |
DOE agreed with our recommendation. In its June 2021 management decision letter to Congressional committees, DOE stated that it developed a grid resilience strategy under its Grid Modernization Initiative (GMI)--a collaborative partnership of five DOE offices: Fossil Energy; Nuclear Energy; Electricity; Energy Efficiency and Renewable Energy; and Cybersecurity, Energy Security, and Emergency Response. According to DOE, the GMI strategy, developed in December 2020, includes an all-hazards approach to characterize and implement system resilience but it does not prioritize climate change over other threats. Nevertheless, DOE noted that the current strategy will be the framework for the Secretarially-approved departmentwide strategy contemplated in our report. DOE expects to update the strategy by October 2022. To fully address our recommendation, DOE's strategy should define goals and measure progress to enhance the resilience of the electricity grid to the risks of climate change.
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| Federal Energy Regulatory Commission | The Chairman of FERC should direct staff to take steps to identify and assess climate related risks to the electricity grid, and plan a response, including identifying actions to address the risks and enhance the resilience of the grid to climate change. (Recommendation 2) |
FERC agreed with our recommendation and has taken several steps to identify and assess climate-related risks. For example, in June 2021, FERC held a technical conference on climate change that addressed how utilities might assess climate-risks, ways to increase resilience to climate change, improving transmission and generation outage management, and potential changes to mandatory reliability standards. In March 2022, FERC completed its review of stakeholder comments following the conference and issued two Notices of Proposed Rulemaking in June 2022. The first notice proposed directing transmission providers to submit a one-time report describing their current or planned policies and processes for conducting extreme weather vulnerability assessments, and developing solutions for mitigating identified extreme weather risks. According to the notice, FERC needs this information to carry out its responsibilities under the Federal Power Act. The second notice proposed to direct that the North American Electric Reliability Corporation (NERC) submit to the Commission modifications to a transmission reliability standard. These modifications should address reliability concerns related to transmission system planning for extreme heat and cold weather events. In addition, the Commission also invited comments on whether FERC should also direct NERC to address other risks-such as drought-in the standard. According to FERC, stakeholders filed comments under both notices in August 2022. As of November 2022, Commission action was still pending. We believe FERC has partially addressed our recommendation. To fully address our recommendation, FERC should identify actions to address the climate-related risks identified.
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