Applications of Measuring and Valuing Resilience in Energy Systems

Abstract

The electricity sector is vulnerable to numerous hazards that are being exacerbated by climate change, which can cause an increase in the hazards' frequency and intensity. Consumers, system regulators, system operators, and communities are now preparing to mitigate the increased risks posed by climate change. New York State's energy infrastructure resilience can be increased with targeted investments including but not limited to installing emergency backup systems, integrating microgrid solutions, weatherizing buildings, increasing energy efficiency, adding redundancy, investing in restoration and recovery, and hardening critical components. Such investments can reduce the likelihood, impact, and consequences of disruptive events but can also increase capital and operating costs.A barrier to prioritizing investments in resilience is that there is no widely established method for quantifying and assigning the benefits of resilience investments across various stakeholders. Decision-makers need better information detailing the value of resilience improvements. Developing methods to quantify, value, and price resilience helps meet resilience needs in an effective manner that also supports broader societal welfare. This report lays out considerations for quantifying and valuing resilience, discusses the current state of resilience valuation tools, and provides case studies of resilience projects that demonstrate how resilience attributes could be measured while highlighting broader, project-specific challenges to increasing resilience. Further, we present insights into methods and challenges to measuring, valuing, and enacting resilience investments. One way to quantify resilience involves using a probabilistic risk assessment, which is the process of identifying hazards, estimating their frequency of occurrence, identifying vulnerabilities, and estimating the severity of impacts. There are five steps to determining the expected costs of disruptive events, and in turn, determining the value of resilience, which are similar to NREL's energy resilience assessment methodology (Anderson et al. 2019). NREL's methodology fits within the probabilistic risk assessment framework.