Electricity Grid Resilience: Climate Change Is Expected to Have Far-reaching Effects and DOE and FERC Should Take Actions
Fast Facts
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
Highlights
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 August 2022, DOE officials briefed Congress on recent updates to the Grid Modernization Initiative (GMI) strategy. The strategy includes an all-hazards approach to characterize and implement system resilience. According to DOE, the GMI strategy will serve as the foundation for the departmentwide climate change strategy that GAO recommended. In July 2024, DOE announced it finalized its GMI strategy. The strategy states that the grid needs to be exceptionally adept at adapting to extreme weather events made more frequent by climate change while also mitigating its direct causes. It includes six pillars to guide its work: (1) devices and integrated systems; (2) operations; (3) planning; (4) markets, policies, and regulations; (5) resilient and secure systems; and (6) flexible generation and load. According to DOE, using these pillars as a foundation, the GMI will execute programs that include fundamental scientific research and development, technology demonstrations in real-world conditions, and technical assistance to support key stakeholders. Under the scope of its planning pillar, the GMI includes power system modeling, interdependencies with other critical infrastructures, and climate impact assessment. Specifically, it states that climate adaptation and mitigation is an important research area for future power planning. The July 2024 GMI strategy also mentions climate change mitigation and adaptation goals, such as reducing emissions and adapting to changes that are already happening. It states that achieving these goals requires updating grid technologies and policies at all levels, from generation, transmission, and distribution through end use. However, the strategy does not describe plans for implementation and measuring progress. To fully address our recommendation, DOE should address how it plans to implement the strategy 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) |
The Federal Energy Regulatory Commission (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. Since the June 2021 technical conference, FERC took several additional steps to identify and address climate change risks to the grid. For example, in June 2023, FERC issued two orders to address challenges in planning for extreme heat and cold weather events: Order No.896 and No.897. Order No. 896--Transmission System Planning Performance Requirements for Extreme Weather--directed the North American Electric Reliability Corporation (NERC) to develop a new or modified reliability standard no later than December 23, 2024, to address reliability concerns pertaining to transmission system planning for extreme heat and cold weather events that impact the reliable operation of the bulk-power system. In it, FERC noted consensus among panelists at the June 2021 technical conference that planners cannot simply project historical weather patterns forward to effectively forecast the future, since climate change has made the use of historical weather observations no longer representative of future conditions. Further, in response to this order, on December 17, 2024, NERC filed a new transmission planning standard with the Commission, Reliability Standard TPL-008-1--Transmission System Planning Performance Requirements for Extreme Temperature Events. The proposed standard would require transmission planners and planning coordinators to conduct extreme temperature assessments at least once every five years. Order No. 897--One-Time Informational Reports on Extreme Weather Vulnerability Assessments, Climate Change, Extreme Weather, and Electric System Reliability--directed transmission providers to file a one-time informational report on whether and how they conduct extreme weather vulnerability assessments, as well as how they use the results of those assessments to develop risk mitigation measures. Using the findings from Order No.897, on May 13, 2024, the Commission issued Order No.1920--Building for the Future Through Electric Regional Transmission Planning and Cost Allocation. Order No.1920 required transmission providers to conduct regional transmission planning on a sufficiently long-term, forward-looking, and comprehensive basis to identify long-term transmission needs. It established two requirements centered on evaluating extreme weather events in long-term transmission planning processes, according to FERC officials. For example, Order No.1920 directed transmission planners to use three long-term scenarios to identify transmission needs and required transmission planners to consider a minimum of seven specific benefits in evaluating proposed transmission projects, including mitigation of extreme weather events and unexpected system conditions. In November 2024, FERC issued Order No. 1920-A, which states that extreme weather events have occurred more frequently in recent years, represent periods during which regional transmission facilities have particularly high value, and create stressed system conditions that transmission providers can readily compare with non-stressed scenarios to determine the value of specific transmission facilities under these types of conditions. Through these efforts, we believe that FERC has addressed our recommendation.
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