The heat is on, and climate change will put significant strain on the US power grid – unless we do something about it.
In the absence of any concrete new policy proposals coming out of the not-so-green White House, we figured we would write about something we know even more about – research! Patrick Baylis, Catie Hausman and I have a new paper out today in the Proceedings of the National Academies of Sciences (PNAS), which is of utmost relevance to this blog. It combines Max’s three favorite topics: climate change, electricity and lots of data.
Humans do not like heat. There is ample evidence that when it’s hot outside, more people die, we are unhappier, air quality decreases, we become more aggressive and violent, less productive and our cognitive ability decreases. In order to offset these effects, we seek cool environments. Lakes, shade and, over the past century, the air conditioned indoor space. Movie theatres these days are so cold, you can just bring a bucket of sugary cream and you’ll have ice cream by the time the trailers are done. Supermarket, shopping malls, server farms, packing plants, and most homes are air conditioned.
In most of the U.S., electricity usage spikes in the summer when it’s really hot outside. Alan Barreca and coauthors have shown that the rollout of air conditioning has led to massive decreases in heat related mortality over the past century. While we use some electricity to run our heating systems in the winter, in most of the country, air conditioning uses more electricity. And so it’s no surprise that rising temperatures from climate change are expected to lead to increased electricity demand.
The question that arises is just how much. Lucas has a nice paper on residences in Mexico and finds that we expect massive increases there. In the US, the literature has been relatively sparse. There are few papers on the commercial and industrial sectors.
And importantly, producing electricity at peak times is much more expensive than at non-peak times. If we need to expand generating capacity enough to allow for one more large window unit air conditioner to run at the system peak demand, the upfront cost of that additional power plant (or share thereof) in California is roughly $900. That number nearly knocked my air conditioned socks off.
In the PNAS paper released today we impose end of century climate on today’s economy and grid. We highlight that climate change would cause electricity demand to increase disproportionately at times when the grid is already stressed. A lot of the previous research has focused on the impact of climate change on the *typical* day in a year, finding moderate increases in demand over the next 100 years. We show that it’s also important to factor in the impact on the highest-usage days — when we show that electricity demand will increase even more.
Under business-as-usual (= somewhat frightening) RCP8.5 scenario from the climate change literature, we estimate that *average* demand will increase 7.9%. But the increase is substantially larger — 17.6% — on the highest demand (meaning sweltering hot) days of the year (specifically, we look at the 95th percentile of usage). That makes sense, since a bigger percentage of demand is coming from air conditioning on those high-usage days.
The reason this matters is that cost-effective electricity storage is not yet widely available. So we build the grid to meet the highest usage “peak” hour of the year. Over the next 100 years, that grid capacity will need to increase substantially to accommodate climate-change driven demand growth.
What this means is that adaptation to climate change will be costlier than existing models estimating these costs globally estimate. There are a number of adaptation routes — building hundreds more peaker power plants; developing more storage; developing more efficient cooling technologies, or getting customers to change their behavior. But the existing cost calculations for adaptation don’t factor in the need to do these things.
Another implication is that actions to *prevent* climate change are more valuable than what existing models say. If you can lessen climate change, you can avoid some of these adaptation costs. So let’s get to solving this climate change problem, which is neither perpetuated by the Chinese (their plans to solve climate change are more ambitious than what I fear we will do) nor a hoax. It’s real. Let’s get to it.
This blog post was coauthored with Catherine Hausman (Michigan) and Patrick Baylis (Stanford/UBC Vancouver).
Maximilian Auffhammer is the George Pardee Professor of International Sustainable Development at the University of California Berkeley. His fields of expertise are environmental and energy economics, with a specific focus on the impacts and regulation of climate change and air pollution.