National Grid: The Climate Change Risk Tool

Company Name: National Grid

Project Name: Climate Change Risk Tool

Industry: Energy

Project Location: United States and United Kingdom

Project Partners: Framework partners, including Arup. Specific technical skillset resources have been provided through our partnerships with Pontoon, IBM, Wipro, and Tata Consultancy Services.

Ensuring that business and society are equipped to cope with the present and future impact of global warming is vital. National Grid’s Climate Change Risk Tool (CCRT) helps the company understand assets exposed to different climate hazards throughout different time periods.

The Climate Change Risk Tool (CCRT) exemplifies the principle of being “Science Based and Proactive” by leveraging data-driven climate risk assessments across multiple timeframes and scenarios, enabling National Grid to make informed, long-term decisions to mitigate asset vulnerabilities. The tool also upholds the principle of being “Transparent and Accountable” by providing clear, accessible insights into climate-related risks, empowering stakeholders to understand and support resilience investments that protect service reliability amidst changing climate conditions.

The CCRT provides a user-friendly experience with comprehensive data and risk analysis to view long term impacts of climate change on company assets. This provides benefits to the National Grid business units:

• Meeting Regulatory Requirements: National Grid operates in jurisdictions with both mandatory and voluntary regulatory orders that drive the company to develop reports on how it is forecasting and responding to climate change. The CCRT provides a method to understand and communicate the risk at a portfolio level.
• Long-Term Asset Management: Instead of making decisions based on currently available information and short-term forecasts, the CCRT can provide long-term considerations that engineers can use to make decisions that could extend the life of assets.
• Understanding Evolution of Risk: Climate hazards may get worse or better over upcoming decades. The tool provides data on where to focus decisions based on which weather events are most likely to increase in severity and adversely impact utility assets to ensure that customer reliability is not compromised by changes in weather patterns.

Project Team: Group Engineering and IT

National Grid is undertaking a systematic, multi-decade engineering assessment to identify where the company is vulnerable to climate hazards and developing plans to ensure customers experience minimal impacts from the increased severity of the hazards. This comprehensive approach includes assessment of the risk, developing mitigation plans, and continual monitoring of the effectiveness of mitigation plans, all of which hinge on the provision of up-to-date and clear data predictions.

The analytical framework adopted in the CCRT is based on the conceptual risk framework set out by the Intergovernmental Panel on Climate Change (IPCC), which defines risk as a function of three components:

1. Hazard: A climate event which can cause damage to assets and infrastructure. Hazards are estimated based on climate data for current and future period across two emissions scenarios.
2. Vulnerability: Asset sensitivity to physical harm from climate hazards. Estimated based on asset typology and general characteristics.
3. Exposure: Asset location relative to hazard location.

Other factors that are included in the CCRT Model include:

1. Types of climate hazard: coastal flooding, freeze thaw, heatwaves, high temperatures, high winds, lightning, low temperatures, river flooding.
2. Time period: For the baseline (current) climate, the analysis uses the same time periods used in national climate assessments, 1981-2010 for 1981-2010 for the United Kingdom and 1976-2005 for the United States. For the future, the analysis uses time periods for which climate projections are available in both UK and US datasets. These are: 2030s, 2040s, 2050s and 2070s.
3. Scenarios: The two representative concentration pathways which have been used to best align with a 2°C and 4°C increase in global temperature are RCP4.5 and RCP8.5. RCPs (Representative Concentration Pathways) are greenhouse gas concentration trajectories adopted by the IPCC.
4. Data: The primary data input into the US version of the CCRT is the Coupled Model Intercomparison Project Phase 5 (CMIP5) data. CMIP5 data incorporates many international models and provides forward-looking climate projections that are meant to be a standardized set of assumptions and projections. UK data primarily comes from the Met Office. Both regions also include data from academia and other sources.

By combining these components into a single dashboard, the CCRT enables National Grid’s teams to make better asset management decisions. Key stakeholders include Transmission and Distribution Asset Managers, Line and Substation Operations teams, Emergency Planning, Reliability, and Forecasting. The outputs of the dashboard can impact decision-making on issues ranging from long term asset decisions, such as considering additional measures to protect against lightning, heat waves, and flooding, to work methods, such as understanding areas that may be more impacted by temperature fluctuations. For example, the CCRT was utilized for the 2023 New York Climate Change Vulnerability Study and Resilience Plan. Based on CMIP5 data, the CCRT provided future flood risk ratings based on rainfall projections, which were used to supplement FEMA flood map information. National Grid used this combination of data to identify substations at increased risk of flooding, and 18 substations that require flood mitigation plans.

The ultimate measurement of success for the CCRT is that as climate change hazards become more frequent and severe in the coming decades, National Grid’s customers experience no change in the reliability they have come to expect. The desired outcome is using the outputs of the tool to justify the appropriate resilience investments to ensure customers’ energy needs are not affected by more severe climate hazards. Already, the CCRT has informed the company’s Group Vulnerability Assessment, and is now being used in the Massachusetts Climate Vulnerability Assessment and the United Kingdom’s Adaptation Reporting Power (ARP4) filing. The Massachusetts Climate Vulnerability Assessment comes out of Massachusetts’ Electric Sector Modernization Plans (ESMP), and is an external-facing report that describes the analysis of the impacts of key climate hazards and expected distribution asset vulnerabilities with key findings and next steps. The ARP4 is a UK government initiative that mandates public bodies and infrastructure providers to report on how they manage climate risk.

In the future, the tool will be enhanced to include more granular data for business units to make more specific asset decisions, expanded assets covered by the tool, and continuous evaluation of whether additional climate hazards should be added.