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The Topic: Resilience RESILIENCE THE TOPIC 10 | 12TH - 18TH FEBRUARY 2016 | UTILITY WEEK I n medicine there is an old proverb: prevention is better than cure. The same is true for climate change resilience. It is much better to prevent the emissions that lead to dangerous global warming from arising. The power sector – the single largest emit- ter of carbon dioxide – has a significant role to play in achieving this mitigation. And with technologies available to produce low-carbon electricity, the sector can and must lead in the transition to a low-carbon economy. Many power companies recognise and embrace this challenge. Of the 118 companies committed to set an emissions reduction target aligned with climate sci- ence, the power sector is one of the best represented. Companies including Enel, National Grid and SSE are among those signed up to setting a science-based target. It is understandable why these companies are looking to a low-carbon future. Changing precipitation patterns, extreme weather and rising air temperatures are already impacting current and future energy sup- ply. Mitigation action is therefore considered the go-to climate resilience strategy for utilities. However, due to the amount of greenhouse gas emissions already in our atmosphere, it cannot be the only pathway to climate resilience. The issue of water scarcity, a problem exacerbated by climate change, helps illustrate why. Worsening water security may constrain the growth of water- intensive electric utilities both directly and indirectly via the supply chain. Last year the drought in Brazil led to a drop in hydro electric generation, which led to an increase in fossil-fuel power generation. Water scarcity also threatens fossil and nuclear gen- eration, given their cooling needs. Exelon experienced reduced production due to a lack of surface water for cooling at one of its nuclear power plants along the Mississippi River, costing the company approximately $1 million. Utilities need to consider that different generation technologies will face different vulnerabilities, which reinforces the case for diversity of power supply, distributed generation and adequate back-up facili- ties. Growing water risks thus present an opportunity to bring online renewable energy sources that are less reliant on water, thereby helping bring down emis- sions at the same time Companies should seek to understand the full spec- trum of resilience responses, or risk undermining the solutions to the problem they are trying to address. Pedro Faria is technical director at international non-governmental organisation CDP Viewpoint: Mitigation is still the best resilience measure, but it cannot be the only one R esilience has become a pressing issue for the UK's regulated utilities, with new measures recently introduced by Ofwat and Ofgem to focus the attention of water and energy companies on the chal- lenge of becoming more resilient in the face of an increasingly complex and intercon- nected set of risks in the world around them. However, while thinking about and strat- egising for long-term resilience is a relatively new requirement for utilities, it is something the World Economic Forum (WEF) has been considering on a global scale for over a decade. WEF's annual Global Risks Report is the product of extensive research and surveying of political, economic and business lead- ers across sectors and it makes a fascinat- ing read for anyone interested in what the authors call "the resilience imperative" – the "urgent necessity to find new avenues and more opportunities to mitigate, adapt and build resilience against global risks and threats". Each year the WEF global risks team maps a picture of the biggest risks facing nations, Global risks Every year the WEF compiles a list of the most serious global threats – in its latest survey climate change, water shortages and energy crises topped the list for many countries. 1 Large-scale involun- tary migration 2 Extreme weather events 3 Climate change 4 Interstate conflict with regional conse- quence 5 Major natural catas- trophes TOP FIVE GLOBAL RISKS Top ten risks in terms of likelihood Large-scale involuntary migration Extreme weather events Failure of climate change mitigation and adaptation Interestate conflict Natural catastrophes Failure of national governance Unemployment or underemployment Data fraud or theft Water crises Illicit trade Top ten risks in terms of impact Failure of climate change action Weapons of mass destruction Water crises Large-scale involuntary migration Energy price shock Biodiversity loss and ecosystem collapse Fiscal crises Spread of infectious diseases Asset bubble Profound social instability Categories Economic Environmental Geopolitical Societal Technological Likelihood GLOBAL RISKS LANDSCAPE 2016 Source: WEF Impact 3.6 4.0 4.6 6.0 6.6 1.0 7.0 7.0 Plotted area 6.0 4.6 4.0 Water crises Illicit trade Data fraud or theft Large-scale involun- tary migration Extreme weather events Failure of climate change mitigation and adaptation Interestate conflict Natural catastrophes Failure of national governance Man-made environmental catastrophes State collapse of crisis Failure of critical infrastructure Failure of urban planning Unmanagebale inflation Adverse consequences of technological advances Critical information infra- structure breakdown Unemployment or underemployment Terrorist attack Failure of financial mechanism or institution Energy price shock Biodiversity loss and ecosystem collapse Fiscal crises Spread of infectious diseases Asset bubble Food crises Profound social instability Cyber attacks Weapons of mass destruction 4.87 average 4.76 average