Risk sharing to avoid power outages in times of extreme weather

Heat waves across the West this summer are raising the risk of recurring blackouts and record-breaking electricity demand across the region. If utilities across the region expanded their existing power distribution plans, they could reduce the risk of outages by as much as 40%, new research from the Climate and Energy Policy Program at the Stanford Woods Institute for the Environment shows.

The study shows how such a shift could also help to create a positive public and policy environment for renewable energy development. It comes amid debate over initiatives such as the West-Wide Governance Pathways Initiative, a Western regulator-led effort to create a federal grid operations and planning organization.

“Extreme weather events ignore state and utility boundaries, and neither does the solution needed to mitigate the impacts,” said study co-author Mareldi Ahumada-Paras, a postdoctoral fellow in energy science and engineering at the Stanford Doerr School of Sustainability. “Greater regional cooperation can improve reliability under widespread stress conditions.”

The new abnormal

Across the West, electric utilities are grappling with three new realities. Demand and resource availability are becoming increasingly difficult to predict due to factors such as more frequent and widespread extreme weather events and the increasing prevalence of rooftop solar.

The rapid growth of renewable energy, such as wind and solar, and energy storage options, requires new operational and planning strategies to meet demand. In addition to these trends, a patchwork of state and federal clean energy targets creates varying incentives that impact utility operations and planning differently.

“New grid management approaches can seize the opportunities presented by our rapidly changing electricity system and address the increasing stresses of extreme heat, drought and other climate-related events,” said study co-author Michael Mastrandrea, research director of the Climate and Energy Policy Program.

The study focuses on the electricity grid that stretches from the West Coast to the Great Plains and from western Canada to Baja California. In recent years, extreme heat waves and severe droughts have placed severe stress on the grid and reduced the availability of hydropower.

The researchers used power system optimization models to simulate grid operations under stress conditions similar to those during the 2022 California heat wave, which brought record-breaking energy demand.

Their simulations showed that expanding the cooperation area could reduce the risk of power outages by up to 40 percent, reduce the amount of undelivered energy – when electricity demand exceeds supply – by more than half and increase reliability.

Politics and public opinion

The researchers call these estimates “illustrative and indicative” because incomplete information makes it difficult to accurately simulate how those responsible for ensuring power grid reliability in specific service areas will respond to stress conditions.

Nevertheless, the results underline that increased cooperation between utilities can improve response to local shortages and surpluses, provide greater flexibility in dealing with unexpected disruptions and balancing supply and demand, and ensure reliable electricity supply during extreme weather events.

Increased collaboration among utilities could also maximize the value of the region’s growing renewable energy portfolio, the researchers say. Renewable energy generation, such as wind and solar, can fluctuate because the wind doesn’t always blow and the sun only shines for a certain number of hours per day.

Expanding cooperation across a larger geographic area can ensure that renewable energy is used (or stored for later) when it is available. Critics of these sources are also likely to blame them for major power outages, the researchers say. This feeds a narrative that could worsen public opinion and lead to policies that slow the adoption or expansion of clean energy.

“Our work shows that greater collaboration for utilities and their customers is not just about dollars and cents,” said study co-author Michael Wara, director of the Climate and Energy Policy Program at the Stanford Woods Institute for the Environment.

“It’s about keeping the lights on as we face the challenges of the energy transition and the increasing impacts of climate change.”