Most see growing financial risks from increasing extreme weather
NEW YORK; May 14, 2020 – More than nine in 10 executives (95%) believe that climate change due to greenhouse gas emissions has been a contributing factor to increased extreme weather events that their electricity networks have experienced over the past 10 years, according to new research from Accenture (NYSE: ACN). In addition, 90% believe an expected rise in severe weather poses an increased financial risk to their grid businesses.
The study — the sixth edition of Accenture’s Digitally Enabled Grid research — is based on a survey of more than 200 electric utility executives in 28 countries on five continents. Other key findings include:
- Almost three-quarters (73%) of survey respondents said that extreme weather events represent a significant challenge to network operations and safety.
- 92% said they expect severe weather to increase in the next 10 years.
- 88% said maintaining network resilience to extreme weather will result in significant increases in network prices for customers.
- At the same time, only one-quarter (24%) believe that their businesses are very well prepared to deal with the impact of extreme weather, with one in 12 (8%) reporting being poorly prepared.
Building Network Resilience
More than nine in 10 respondents (95%) believe that building greater adaptability into the network — such as network reconfiguration, embedded storage, redundancy and voltage management — over the next 10 years will be critical to increasing overall resilience. Further, 93% see system flexibility as the most cost-effective approach to deliver long-term resilience.
In fact, nearly the same number of executives (93%) said that they are testing innovative solutions for grid resilience, including advanced protection systems, vehicle-to-grid technology, automated self-healing grids and drone inspections of damage factors.
However, enabling greater network flexibility remains a challenge. While 95% of executives believe that active management of distributed generation — including solar photovoltaics, wind power and energy storage — will be key to supporting network resilience in the long term, 84% said a lack of information on the location, size, specification and operational state of smaller distributed energy resource installations is affecting resilience in the near term.
In addition, the study found that a lack of industry-wide guidelines and standards is hampering action to increase utilities’ resilience to the effects of severe weather on the grid. Utility executives said their top-ranked weather concerns for network resilience include very high winds (23%), flooding (17%) and winter ice and snowstorms (15%).
Amol Sabnis, a managing director who leads Accenture’s transmission and distribution business, said, “In the long-term, utilities can promote greater resilience by linking the benefits of major investments to grid-modernization strategies to convince policymakers, customers and other stakeholders of these benefits.” But COVID-19 is increasing the urgency to address resilience, he added, noting, “It is raising new questions such as, in the event of massive catastrophe how do we support the repair crews, feeding and sheltering them while meeting COVID-19 safety needs? What are the best technologies to protect employees’ health on the job, such as temperature scanning, social distancing and air monitoring?”
“The answers will require the industry fully teaming up, but with people and technology, we will get there,” Sabnis added.
Accenture’s annual Digitally Enabled Grid research evaluates the implications and opportunities of an increasingly digital grid. For the most-recent research, Accenture surveyed 206 C-suite and senior vice-president-level executives at electric utilities in 28 countries: Argentina, Australia, Belgium, Brazil, Canada, China (including Hong Kong), Denmark, France, Germany, India, Indonesia, Ireland, Italy, Japan, Malaysia, the Netherlands, Norway, the Philippines, Poland, Portugal, Singapore, Spain, Sweden, Switzerland, Thailand, the United Kingdom and the United States. The survey was conducted online from November 2019 through January 2020.
Accenture is a leading global professional services company, providing a broad range of services in strategy and consulting, interactive, technology and operations, with digital capabilities across all of these services. We combine unmatched experience and specialized capabilities across more than 40 industries — powered by the world’s largest network of Advanced Technology and Intelligent Operations centers. With 509,000 people serving clients in more than 120 countries, Accenture brings continuous innovation to help clients improve their performance and create lasting value across their enterprises. Visit us at www.accenture.com.
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