HARC Launches Cross-cutting Analytics on Climate Risk and Resilience in the Texas Power Sector



By Gavin Dillingham, PhD, Vice President, Research and Maya Velis, MSc, LLM, Research Associate, Water-Energy-Climate Nexus

Recent infrastructure failures in Texas have spotlighted climate risks as millions of Texans were left in the cold and dark or without water. Texas has experienced more billion-dollar weather disasters over the past two decades than any other state. Hurricane Harvey alone led to damages totaling $125 billion. Extreme weather is among the megatrends affecting the Texas power sector, alongside a growing energy demand and a push for clean energy.

Climate change presents new risks and levers for resilience

Engineers have managed risk for generations, designing infrastructure to withstand a range of weather conditions. Decades of meteorological data had shown that relevant conditions (e.g., water levels, wind speeds, and air temperature) may vary, but remain within reasonably well-defined boundaries. As extreme weather becomes the new normal, this assumption has been turned on its head.

Extreme weather increasingly impacts electricity generation and delivery, which could have far-reaching implications across the Texas power sector. For instance, power generators may discover that their output is increasingly constrained by rising temperatures and falling water tables. As Texans frantically try to stay cool or warm, surges in energy demand could push the electrical grid to fail.

According to the International Panel on Climate Change, the window of opportunity to avoid the worst impacts is closing fast. Rapid change makes it difficult for infrastructure and natural ecosystems to adjust. The good news is that boosting climate resilience provides unprecedented opportunities to transform business as usual. Increased resilience would bring many benefits to the Texas power sector.

Urgent need for data-driven insights on climate risk in the power sector

Resilience starts with scenario development to get a handle on possible future impacts of extreme weather and climate policy. Stakeholders need better data and tools to identify, assess, and prepare for climate risk and to unlock integrated solutions for resilience. To address this need, HARC has established Pythias Analytics, a new company that is working with electric utility and energy companies to assist in identifying and mitigating risks.

Pythias Analytics is in the process of developing a climate analytics platform that aims to support and strengthen stakeholder capabilities to monitor infrastructure exposure to extreme weather. Pythias Analytics will allow companies to conduct system, portfolio, and asset-level risk assessments.

Cross-cutting analytics on climate risk and resilience in the Texas power sector

Under the umbrella of Pythias Analytics, HARC is launching a series of publications on climate risk and resilience in the Texas power sector. These publications will provide the foundation for targeted engagements with thought leaders to chart the path to climate resilience, and will address three questions:

  • How is climate change impacting the power sector now and in the future?
  • Do power sector stakeholders view climate change as a risk or an opportunity (or both), and what types of actions do stakeholders take in response?
  • How do the financial implications of climate change affect the “bottom line” in asset operations?

The first publication in this series is available now. The position paper, Powering the future: Texas power sector pivoting to climate resilience, analyzes the various ways climate change is impacting power generation and provision. The paper explores what it takes to climate-proof assets and infrastructure, highlighting the importance of leveraging critical investment decisions towards resilience opportunities.

Additional analytical pieces on climate risk will be launched soon. Stakeholders interested in gaining a better understanding of private sector attitudes and management approaches should review the upcoming report on the survey that HARC, in partnership with ClimeCo and Lehigh University, conducted among power sector professionals in 2021. Stakeholders who want to understand the financial impact of climate risks on asset evaluations should look out for our technical brief on thermo-electric power plant performance with rising temperatures.

Find out more about the path to climate resilience here.