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Increasing power utility resilience through climate change scenario analysis

Climate
Climate and Resilience Hub|Climate Risk and Resilience

By Álvaro Linares Fuster and Bob Khosa | February 17, 2022

Turbocharging adapation: how a utility company is deploying climate analytics for strategic and operational decision-making

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More about Nova Scotia Power

Nova Scotia Power (an Emera company) is a leading North American Utility company, that generates more than 2,400MW of electricity from a variety of sources, including hydro, coal, petroleum coke, fuel oil, biomass, natural gas, and wind. Their more than $5 billion worth of generation, transmission and distribution assets produce over 10,000 gigawatt hours of electricity each year. NSP is committed to operating in a manner which is respectful and protective of the environment: "Through embracing innovation and making significant changes in the way we generate and deliver electricity, we are a national leader in carbon reduction, ensuring our electricity is sustainable – both economically and environmentally – for future generations."

The electricity sector’s generation, transmission and distribution infrastructure assets are highly exposed to increasing physical climate risks and are subject to disruption. Recognizing the potential impact that a warming climate has to its operations, Nova Scotia Power (NSP), a leading North American power utility, worked with a consortium of climate specialists including Manifest Climate, Mantle Developments and WTW to strengthen its climate adaptation based on a range of possible climate futures. 

Manifest Climate and its sister company, Mantle Developments, educated key teams on climate risk and incorporated climate considerations into NSP’s asset management processes. WTW, through its Climate and Resilience Hub (CRH), utilized its Climate QuantifiedTM analytics services to derive industry-specific data on relevant climate considerations. Working together with NSP, this team of climate specialists delivered a package of data, tools, knowledge and capacity building to raise the climate capabilities of NSP’s risk teams. 

Through this project, NSP achieved objectives of:

  1. Facilitating the identification, evaluation, and prioritization of climate-related risks for NSP’s assets through integration of those risks into asset management processes and the organization’s enterprise risk management system;
  2. Enhancing NSP’s fundamental capacity to adapt to climate change by leveraging the best available climate science and data to inform decision-making processes; and
  3. Increasing organizational resilience by reducing vulnerabilities to the physical impacts of climate change through development of adaptation actions and measures.

There were three main challenges in incorporating climate scenario data into a utility’s operations. First, a major driver for NSP was their recognition that more needed to be done to understand climate change and its potential impact on their business. Climate change and scenario analysis are not yet part of traditional training for energy sector professionals. Manifest Climate addressed this challenge through targeted training. Second, while utility infrastructure is directly exposed to both event-driven acute and longer-term chronic climate change impacts, it is surprisingly difficult to openly source utility-specific climate data at the local level. NSP required credible data founded on rigorous and best-in-class science specific to their operations. WTW provided the specialized understanding and tools to source, collate, and interpret the data for NSP’s needs. Third, climate scenario data is not usually provided in a user-friendly format; often found with varying characteristics and at resolutions not relevant to the decision-making process of a utility. The WTW team translated the asset-specific climate data into a consumable form for NSP and Manifest Climate and Mantle Developments developed a tool to help NSP prioritize the most relevant subsets of the data by asset type. These steps are described in more detail below.

To begin, Manifest Climate provided climate change and climate scenario education as well as gathered climate-related organizational information to build NSP’s climate capacity. A live education session provided a common foundation of climate language for the NSP team and introduced climate scenario modelling and the type of data the NSP team would be accessing. This first step helped the NSP team with their thinking of how to integrate climate knowledge into their risk processes and what resources are needed to analyze the multi-model, multi-scenario climate projections data. 

WTW then provided the specialized understanding and tools to collect and interpret the necessary data to meet NSP’s specifications. WTW has extensive experience working with complex climate datasets and is familiar with the best sources of climate-related data for key climate variables (e.g., precipitation, temperature, sea level rise, flooding, wildfires, extreme wind, etc.). This ensured that the climate data NSP obtained was best-in-class: the most recent, and the most relevant to their operations and geographic setting. WTW developed tailored datasets that included more than 30 climate hazard indices over medium emissions (RCP4.5) and high emissions (RCP8.5) scenarios and three time horizons in a GIS-compatible format to facilitate use by NSP’s in-house GIS experts. 

Finally, combining the needs of NSP and the wealth of climate data provided, Manifest Climate, Mantle Development and WTW developed the “ELAD Matrix” tool and example use cases with the climate data. The ELAD Matrix tool combined existing on-the-ground weather impact and climate knowledge to prioritize climate hazards for each utility infrastructure asset. With the key climate hazards in mind, WTW put the climate data into context for NSP and showed how to navigate the extensive dataset. This resulted in empowering NSP to identify key climate variables and their relevant thresholds for critical assets. 

For example, the resiliency of hydro generating stations became informed by climate projections related to precipitation. The ELAD matrix identified that “major precipitation events” are a key variable while “changes in intensity of precipitation” was lower priority. Additionally, for particular hydro-assets, “wildfire” would also be relevant based on the local characteristics of the watershed. WTW then demonstrated how the GIS datasets can be navigated to gather insights for specific climate variables. With this information, NSP’s team could then operationalize the data. 

About the team

  • Nova Scotia Power
    • Nova Scotia Power Inc. is a vertically integrated electric utility in Nova Scotia, Canada. It is privately owned by Emera and regulated by the provincial government via the Nova Scotia Utility and Review Board (NSUARB). Fuel mix uses hydro, tidal, wind, coal, oil, biomass and natural gas to generate electricity for over 520,000 residential, commercial and industrial customers across Nova Scotia. Our facilities can generate more than 2,400 megawatts of electricity that is delivered across 32,000 km of transmission and distribution lines. Our more than $5 billion worth of generation, transmission and distribution assets produce over 10,000 gigawatt hours of electricity each year.
  • WTW
    • The Climate and Resilience Hub (CRH) is the focal point for WTW’s climate expertise and capabilities, pooling knowledge from across the firm’s people, risk and capital businesses and from their collaborations to deliver climate and resilience solutions in response to a range of regulatory, investor, consumer, employee and operating pressures.
    • Climate QuantifiedTM is WTW’s climate end-to-end service that combines expert advisory analytics and tools for analyzing and reporting on climate-related risks and opportunities. Climate Quantified™ delivers analytics, advice and transactions to enable corporate, finance and public sector institutions to embrace the climate decades ahead.
    • This project was delivered by Acclimatise Group Ltd, acquired by WTW in November 2020 and now integrated within WTW’s Climate and Resilience Hub.
  • Manifest Climate
    • Manifest Climate Inc.'s SaaS+ platform (Software as a Service plus services) is powered by world-class in-house climate expertise that helps businesses learn, govern, disclose and act with climate confidence. Through first-of-its-kind software, combined with benchmarks and datasets on the Task Force on Climate-related Financial Disclosures (TCFD), Manifest Climate's SaaS+ platform identifies gaps in organizational climate maturity, provides on-demand educational resources, and tracks sectoral developments and legal and policy changes as they occur.
    • Manifest Climate's mission is to help empower organizations to rapidly identify and effectively manage climate-related risks to secure and expand financial success.
    • Behind Manifest Climate is a team of leading technology entrepreneurs, developers, climate change specialists, data scientists, actuaries, financial professionals, lawyers and engineers.
  • Mantle Developments
    • Mantle Developments provides technical consulting services to help create climate-smart building and infrastructure, including net-zero emission projects. They help project teams think beyond energy efficiency to also manage the carbon impact of a project’s entire life cycle, from construction material manufacture to ultimate end-of-life and reuse. This work often extends to improving the climate resilience of real assets, including both buildings and infrastructure.
    • Their team of engineers and development experts bridge the gap between climate innovation and real-world design, construction, and operation of the built environment.
Authors

Associate Director - Analytics

Director Research


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