US economy suffered 11 billion-dollar weather events and 679 power outages in 2012: White House demands smarter grid resilience

Clare Saxon Ghauri
13 August 2013

NEW YORK: Greater cross-sector investment is needed to make America’s electric grid more resilient in the face of increasingly extreme and expensive weather events and related power outages, a new White House report warns.

The report, Economic Benefits of Increasing Electric Grid Resilience to Weather Outages, by the White House Council of Economic Advisers and the U.S. Department of Energy, exposes how electric grid resilience is becoming an urgent issue in the US as climate change continues to cause more frequent and intense weather in the country and the aging grid struggles to cope, causing economy-damaging power outages.

Its conclusion supports President Obama’s Climate Action Plan, which demands a grid upgrade to make energy more reliable, save users money and increase clean energy use.

Expensive storms

Focusing on American power outages caused by severe weather between 2003 and 2012, key findings include:

  • Weather-related outages cost the US economy an inflation-adjusted yearly average of US$18 billion to US$33 billion, according to estimates
  • In 2012 alone, the US suffered 11 billion-dollar weather disasters – which is the second-most for any year on record, after 2011
  • Around 679 power outages, each affecting over 50,000 customers, happened because of weather events. The grid’s susceptibility was also blamed on its old age
  • Seven of the ten costliest storms in US history happened between 2004 and 2012.

The report concludes by calling for more cross-sector investment in the electric grid, identifying strategies to modernize the grid and better prevent power outages, such as working with utilities to improve infrastructure against wind and flood damage.

Patricia Hoffman, Assistant Secretary for the Office of Electricity Delivery and Energy Reliability at the Energy Department, said in a statement: “The US electric grid is a vital component of the nation’s infrastructure and delivers, transmits, and distributes electric power to millions of Americans in homes, schools, offices, and factories across the United States. Investment in a 21st century modernized electric grid has been an important focus of President Obama’s administration and this report underscores the importance of continued cross-sector investment to make the grid more resilient to the causes of power outages, including severe weather.”

Economic case

Beyond improving resilience, the report also outlines how investments in smart grid can lead to greater energy efficiencies and related carbon emission reductions, as well as the stability for businesses that is necessary to grow the US economy.

Amy Davidsen, US Executive Director, The Climate Group, said: "Severe weather caused by climate change makes our aging grid more vulnerable to power outages. As this report indicates, weather-related outages are costly, and smart investments to make the grid more resilient - including building more distributed clean power - often make good economic sense."

Read Economic Benefits of Increasing Electric Grid Resilience to Weather Outages

Related news:

President Obama outlines second-term plan to address climate change

US President Obama: "A low carbon, clean energy economy can be an engine of growth for decades to come"

Read our report - America's Clean Revolution: Why the US should play to win on the clean economy

By Clare Saxon

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