De-Risking the Clean Energy Transition Through Electricity Resilience
Scholars from the University of Pennsylvania are on the ground at COP27 in Sharm El-Sheikh, Egypt. Follow their updates from the climate conference and tune into a special podcast series from Energy Policy Now.
Nearly 800 million people around the world live without access to electricity. But even those with access to power—particularly in developing countries—face the risk of longer, more frequent blackouts due to climate change, which makes natural disasters including extreme heat, flooding, and storms both more frequent and more severe.
In a UNFCCC implementation lab at COP27, experts recognized that providing universal access to clean, distributed, and reliable energy will require improving the resilience of electric grids—meaning that grid infrastructure and operations must be able to withstand these severe weather events. These experts, representing both the Global North and Global South, offered insight on how to bolster resilience.
Jinsun Lim, climate resilience lead at the International Energy Agency stressed that resilience has been much less discussed than mitigation in the energy sector. She highlighted that over 50 percent of the world population lives in countries with high levels of climate hazards. The first step, she urged, should be mainstreaming climate resilience in national energy plans. As of 2021, many countries still had no national plans for boosting the climate resilience of their energy systems.
Isabel Beltrán, director for Latin America and the Caribbean at Global Energy Alliance for People and Planet, also emphasized the importance of conducting rigorous risk assessments. She highlighted that her organization has designed several of its projects, including those operating in Puerto Rico and Uganda, with resilience in mind. Beltrán noted that building resilient assets is critical not only to maintain energy access but also because keeping the lights on allows people to rebuild their social and economic lives in the immediate aftermath of natural disasters.
Other experts touched upon their own work supporting the construction of resilient energy infrastructure. Dr. Mallé Fofana, director for Africa and head of programs at the Global Green Growth Institute, called for investors who finance grid infrastructure projects to prioritize system-wide resilience.
Marco Serena, group head of sustainable development impact at the Private Infrastructure Development Group, explained that, from his perspective, a thorough evaluation of risk exposure must consider both the adaptation and the resilience value of projects. He also urged that projects should be designed with climate change in mind to improve both their reliability and their longevity.
As one example of this climate-aware planning, Marcus Watson, investment director at KawiSafi Ventures, underscored the importance of investing in distributed renewables, in part because of the ability of renewables to provide energy services to farms and households directly, even when large portions of a centralized electric grid may have been damaged.
From the private sector, Peter Douglas, sustainability investing manager at McKinsey & Company, offered a suite of possible pathways to support the development of resilient energy infrastructure. Douglas first highlighted four factors testing the resilience of energy systems: (1) the increased intensity of climate hazards; (2) the rapid growth in energy systems, especially in areas vulnerable to flooding and extreme heat; (3) a shift in the vulnerability profiles of grids created by the clean energy transition; and (4) increases in system-wide energy demand.
Turning to solutions, Douglas proposed seven market and regulatory levers that can be pulled to ratchet-down the climate risks facing grid infrastructure. The first two—developing off-grid generation and diversifying sources of renewable power—can enhance grid reliability by boosting the level and variety of generation resources that grid operators can call upon to deliver power.
Other levers—such as building increased transmission and distribution lines, developing energy storage solutions, using smart grid technology to improve the dispatchability and flexibility of on-grid resources—can be used to improve the efficiency of the grid operations. Lastly, Douglas emphasized that hardening grid assets to withstand extreme conditions and making better use of data and planning tools to anticipate when harsher conditions will arise can create and improve energy resilience.
But putting some of these solutions in place won’t be easy. Each of the COP27 resilience experts recognized, in some way, the growing need to close investment gaps in emerging markets, as these markets still lack critical energy infrastructure yet face limited private sector finances.
Dr. Mahmoud Mohielden, the UN climate change high-level champion for Egypt, summarized the urgency of financing resilient infrastructure best: for both his country and the world, he noted that “the science might be there, but it doesn’t come free of charge.”
Closing that funding gap is a key challenge of the race to resilience. The experts’ suggestions—including conducting rigorous risk assessments to de-risk climate investments and diversifying investments across a portfolio of differentiated clean energy resources—could be crucial next steps in that race.