Wednesday, August 21, 2013

Paying for climate change adaptations and grid resiliency

Christine Hertzog in the Energy Collective: Climate change adaptation plans to harden our electrical infrastructure will be unavoidable and expensive.  The grid needs to be upgraded anyway, as pointed out in the American Society of Civil Engineers (ASCE) Report Card discussed in last week’s article.  It is a momentous opportunity to re-architect our electrical grid to last another 100 years....

But the numbers are huge.  The ASCE report estimates that we’re underinvesting in the distribution grid by $57 billion.  That’s a number based on simply updating existing grid infrastructure.  That doesn’t take into account the hardening of the grid – which includes asset relocation, resiliency strategies such as distributed energy resources (DER), and upgrading infrastructure to withstand extreme weather events caused by climate change.

Utilities can develop short- to long-range plans to upgrade infrastructure, but they don’t have unlimited budgets, and sometimes regulatory policy limits their range of actions.  All of the grid investments discussed in this series will take serious money.  Right now, the only answer is that it comes out of the pockets of ratepayers or taxpayers at the local level.  But adapting the grid for climate change reasons isn’t always caused locally.  It’s a nationally shared responsibility because of our use of fossil fuels.

So how do we fund the multi-billion investments needed to adapt our electrical infrastructure to climate change?  Here is my suggestion:

Create a federal Grid Resiliency State Revolving Fund program to fund projects. The US government now funds drinking water infrastructure projects for publicly- and privately-held water agencies through the Drinking Water State Revolving Fund program, governed by acceptance criteria and guidelines regarding project qualifications.  A similar model could work for grid resiliency projects responding to the negative impacts of climate change.  State involvement helps ensure that funds are targeted to the infrastructure projects that reduce the most grid vulnerabilities caused by climate change...


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