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July 12, 2013 11:34 AM The Electricity Grid’s Big Climate Change Problem

By Matthew Kahn

In the NY Times, John Broder has written a good piece where he notes that climate stress could lead to both supply and demand shocks for electricity that threaten the reliability of the grid. For a full copy of the DOE report click here. We need consistent access to electricity so how do we adapt? I predict that the following trends will emerge because we know that we face a future challenge if we don’t make investments now.

  1. We will see more distributed generation to reduce the risk of catastrophic electric utility failure. In-basin solar generation is one policy being discussed in Los Angeles. Read my colleague J.R DeShazo’s work.
  2. Electric utilities will work harder to get more commercial electricity consumers to sign up for demand response incentives such that the utility can reduce such consumers’ electricity consumption on high net demand days.
  3. The wide diffusion of Smart Meters being installed in people’s homes and businesses will allow people to have real time access to the price of electricity. Households and firms will opt in to face dynamic pricing and will be incentivized to do so. When the price per kwh jumps, such households won’t run their dishwasher at peak price hours. This is the small ball of adaptation.
  4. Improvements in battery technology will allow us to store electricity that we can use during a crisis to live our daily live.
  5. Those cities that do not offer reliable power to households and firms will lose the footloose who will move to cities offering higher quality of life and service reliability. ”Voting with your feet” is a powerful force for motivating a monopolist electric utility as the mayor yells at its leaders to step up. Cities and states are always trying to attract new businesses. Reliable power will be a key determinant (just like local wages) of whether businesses view a location as “business friendly”.
  6. Electric utilities will invest more in backup power generation. The utilities know what Broder knows. As risk goes up, they will introduce contingency plans that help to mitigate risk. Perhaps more transmission capacity will be built so that cities have more alternatives from where they can import power.

This is the flavor of my Climatopolis logic. I’m now selling the paperback version! Items #1 to #6 represent small ball changes to our society. None of them alone “saves us” but together they lead to a more robust system that allows us to continue to thrive.

[Cross-posted at The Reality-based Community]

Matthew Kahn is a professor at the University of California, Los Angeles's Institute of the Environment. He specializes in the environmental consequences of urban growth and related quality-of-life issues.