欧洲CRO论坛 PowerBlackoutRisks.ppt

,Power Blackout Risks,Risk Management Options,Emerging Risk Initiative Position Paper,November 2011,3,4,5,5,5,6,8,8,9,12,12,15,18,18,20,22,Content1.Summary2.Power blackouts challenge society and economy3.Blackout risks on the increase3.1.HOW POWER MARKET TRENDS INFLUENCE BLACKOUT RISKS,3.1.1.3.1.2.3.1.3.,Liberalisation and privatisationRenewable energiesHuge investments in power supply infrastructure required,5,3.2.HISTORICAL POWER BLACKOUT EVENTS AND FUTURE SCENARIOS,3.2.1.3.2.2.,Historical blackoutsWhat are the causes of blackouts?,3.2.3.,Average blackout duration per country,11,4.Potential blackout scenario4.1.CONSEQUENCES4.2.COST ANALYSIS OF HISTORIC BLACKOUT SCENARIOS5.Considerations for risk management5.1.TRENDS AFFECTING THE BUSINESS INTERRUPTION(BI)RISK LANDSCAPEAND POWER DEPENDENCY,5.1.1.5.1.2.,General impact of blackout in light of changed production processesSpecific impact based on car manufacturers,1819,5.2.BUSINESS CONTINUITY PLANNING TO MITIGATE POWER BLACKOUT RISKS5.3.RISK TRANSFER SOLUTIONS,5.3.1.5.3.2.5.3.3.5.3.4.,Principles of insurabilityCurrent risk transfer solutionsFuture risk transfer productsResidual risk acceptance,22232424,6.Conclusion7.AnnexAuthors:Michael Bruch,Volker Mnch,Markus Aichinger(Allianz)Michael Kuhn,Martin Weymann(Swiss Re)Gerhard Schmid(Munich Re)Editor:Markus Aichinger(Allianz)Grateful acknowledgment to all CRO Forum Emerging Risk Initiative member companiesfor their comments and revisions.Title picture:Credit:C.Mayhew&R.Simmon(NASA/GSFC),NOAA/NGDC,DMSP Digital ArchiveLayout:volk:art51,Munich|Printing:Mhlbauer Druck,Munich2,2526,1,3,1.Summary,Blackouts during the last ten years in Europe and Northern America have demonstrated an increasing likelihoodof supra-regional blackouts with accompanying large economic losses.The earthquake,tsunami damage andpower shortages that idled thousands of Japans factories in 2011 highlighted its role as a key and sometimesthe only source of auto parts,graphics chips and other high-end components.Many manufacturers are currentlyusing up the inventories that they had in stock before the earthquake.A similar situation could occur as a resultof a larger power outage and this risk may further increase in the future.One reason are insufficient incentives toinvest in reliable power supply infrastructures.But new and smarter grids including storage capacities(e.g.pumped-storage hydropower plants)are required to handle the future growth of volatile renewable energies,which arelocated far away from the centres of demand.Furthermore the vulnerability of the power supply industry,theindustrial and commercial companies and the public and private sector is high due to the interconnectednessand dependency of all areas on Information and Communication Technology(ICT),navigational systems andother electronic devices.,Whereas short term power blackouts are experienced frequently on a local or regional level around the world(e.g.caused by natural catastrophe events like earthquakes,storms,floods or heat waves),societies are not familiarwith large scale,long-lasting,disruptive power blackouts.Traditional scenarios only assume blackouts for a few daysand losses seem to be moderate,but if we are considering longer lasting blackouts,which are most likely from spaceweather or coordinated cyber or terrorist attacks,the impacts on society and economy might be significant.So far insurance companies were not affected significantly beyond taking care of their own business continuitymanagement in order to mitigate losses following a blackout.Risk transfer via insurance has usually requiredphysical damage to either the insureds assets or the assets of specific service providers to trigger a businessinterruption claim.But only 20%to 25%of business interruptions,such as supply chain disruptions are related toa physical loss1.Therefore insured persons and organisations should be aware that they may face huge uninsuredlosses.This might trigger an increasing demand for new risk transfer solutions related to power blackout risks inthe future.,The insurance industry can offer well contained event covers which fulfil the principles of insurance:randomness,assessability,mutuality and economic viability whereas utilities and governments have to increase their efforts tomake our power infrastructure resilient against such events.,http:/,CRObriefing on Power Blackout Risks,2.Power blackouts challenge society and economy,Electricity is the backbone of each industrialised society and economy.Modern countries are not usedto having even short power blackouts.The increased dependency on continuous power supply related toelectronics,industrial production,and daily life makes todays society much more vulnerable concerning powersupply interruptions.A brownout(reduced voltage)of some minutes or a similar blackout(complete failure ofelectricity supply)may cause some inconvenience at home such as having the lights turn off.But a blackoutof a few hours or even several days would have a significant impact on our daily life and the entire economy.Critical infrastructure such as communication and transport would be hampered,the heating and water supplywould stop and production processes and trading would cease.Emergency services like fire,police or ambulancecould not be called due the breakdown of the telecommunication systems.Hospitals would only be able to workas long as the emergency power supply is supplied with fuel.Financial trading,cash machines and supermarketswould in turn have to close down,which would ultimately cause a catastrophic scenario.If the blackout were tospread across the border lines,which is more likely today due to the interconnection of power grids betweendifferent countries,the impacts would escalate as a function of the duration of the interruption.,The following position paper highlights the risks and future trends linked to power blackouts.It further explores riskmanagement options including operational risk management measures,the importance of a high quality businesscontinuity management plan and risk transfer options.Furthermore it emphasizes the insurance industrys optionsto expand coverage based on physical damage and to consider new non-physical damage insurance solutions.This might be insurance cover or alternative risk transfer solutions,which respond and cover emerging risks suchas power outages,but also political risks,pandemics and/or supply chain disruptions.,picture alliance/dpa,4,World,U.S.A.,Canada,U.S.A.,Philippines,Indonesia,U.S.A.,World,World,World,World,China,China,Brazil,Japan,Germany,Germany,Brazil,Spain,Spain,2,3,4,5,3.Blackout risks on the increase3.1.How power market trends influence blackout risksThe worldwide power supply industry experienced two major changes in the last ten to twenty years:Liberalisation and privatisation Expansion of renewable energy production capacities3.1.1.LIBERALISATION AND PRIVATISATION2Nowadays,most industrialised countries have 10 to 20 years experience with privatisation and liberalisation ofelectricity systems.The liberalisation of the market resulted in the separation of power generation and transmissionand distribution(T&D)business.This process has created an additional interface which can adversely impactcommunication and coordination activities between operators on both sides.The past blackout events reveal(seeboxes in 3.2.1 and annex)that underlying causes are also partly linked to the privatisation and liberalisation trendsdue to missing incentives to invest in reliable,and therefore well maintained,infrastructures.The discrepancy isfurther described in chapter 3.1.3.3.1.2.RENEWABLE ENERGIES3Efforts to mitigate climate change across the world are focusing on the expansion of renewable energy productione.g.onshore and offshore wind farms,solar and biomass power plants.Half of the estimated 194 gigawatts(GW)of newly added electric capacity worldwide in 2010 is represented by renewable energies which was an increase of8%compared to 2009.According to the World Wind Energy Association(WWEA),about 175,000 megawatts(MW)of energy are now being produced by wind power stations around the world.Leading producers are the United States,China and Spain.The European Union intends to increase the renewable energy share of total energy production to20%by 2020.Figure 14:The top three countries for Renewable Energy electricity production,Wind430,Hydroelectricity3,428,Geothermal62.5,Solar Photovoltaic18.2,Biomass210,TWh2010,94.7,50.7,43.0,721,396,366,16.5,10.3,7.0,6.9,6.2,2.9,55.6,33.8,27.1,Total electricityproductionTWhPercentage of,81.7,58.1,RE%,2.0,2.2,1.2,14.3,16.0,17.1,0.3,0.4,16.6,4.5,0.1,2.3,1.0,0.3,1.0,1.3,5.7,5.9,http:/www.psiru.org/reports/2009-12-E-Indon.dochttp:/on Power Blackout Risks,5,6,A downside of renewable energy particularly,wind and solar technologies,is the volatile supply of power.Not onlymay a scarcity of electricity result in a power blackout,but an oversupply can also lead to grid instabilities as theyalter the frequency within the network.For example wind energy in East Germany during strong wind conditionscan provide up to 12 GW,which is more than all German coal and gas fired power plants considered together.Thisis not critical as long as there is enough electricity demand,but may lead to grid instabilities in cases of insufficientdemand as there is not enough electricity storage capacity available.To get rid of excess electricity,transmissionsystem operators(TSOs)often have to pay an extra fee to the electricity market(EEX European Energy Exchange,Leipzig).Otherwise wind park operators have to be convinced to stop the wind turbines immediately in order toprevent grid instabilities and blackouts.Conversely wind turbines must be stopped due to safety reasons if thewind speed exceeds 30 m/sec.This scenario may cause,within one hour,power gaps equal to the performanceof two nuclear power plants.In such cases conventional reserve power plants are required to step in instantly.In addition,the location of e.g.windfarms(onshore and offshore)is often far away from the centres of demand.Electricity has to be transported from sparsely populated regions to large electricity consumers in metropolitanareas.Therefore,new energy infrastructure(new high voltage transmission lines,transformers and energystorage capacities such as pumped-storage hydropower plants or thermal storage facilities)are needed.Grids need to become much“smarter”to handle these enormous technical challenges.Therefore a large-scalesmart grid is needed that integrates and automatically and efficiently coordinates the activities of all players bothon the electricity supply and the demand side.3.1.3.HUGE INVESTMENTS IN POWER SUPPLY INFRASTRUCTURE REQUIRED5The following figure from the grid study published by dena(German Energy Agency6)shows how many criticalissues have to be taken into account to plan a future transmission grid that responds to both the increasedproportion of renewable energy production and future requirements of a modern and sustainable power supply:Figure 2:Challenges for a future transmission gridFlexible Line Management,High Temperature ConductorsInnovative Transmission Technologies100%Integration of Renewable Energy,Environmental Impact Public AcceptanceAvailability&Economic Efficiency,39%Renewable EnergySources until 2020,System Security in the Transmission Grid,Alternative Solutions and GridExtension Requirements,European Electricity MarketSystem ServicesVoltage Support&Short-Circuit PowerIslanding&System Restoration,Market-Driven Operation of Power PlantsIncreasing FlexibilityPower StorageDemand Side Management,Source:denaEIA,Annual Energy Outlook 2011,http:/www.eia.gov/neic/speeches/newell_12162010.pdfhttp:/www.dena.de/fileadmin/user_upload/Download/Dokumente/Studien_Umfragen/Summary_dena_Grid_Study_II_2.pdf(November 2010)6,7,The dena grid study concludes that for Germany alone an additional 3,600 kilometres of 380 kilovolt lines willbe required by 2020.For comparison,since 2005 just 80 km of new power grids were erected.For the European Union grids investments of EUR 23-28 bn are needed over the next five years.This could onlybe realised if investment and permitting processes are pushed and financing incentives for TSOs are supportedby the EU members,regulator bodies and industry.Worldwide an investment of USD 13.6 trillion will be required by 2030 in order to meet increasing demand(International Energy Agency,IEA).IEA concludes that 50%of this amount needs to be invested in transmissionand distribution and another 50%in generation of electricity.One of the most prominent projects that address these requirements is the Desertec project.The below charthighlights the necessity of long distance transmission capabilities in order to efficiently use and distributerenewable energies.DESERTEC-EUMENA,ConcentratingSolar PowerPhotovoltaicsWindCSP:Concentrated Solar PowerSquares indicate the area required to meet the respective power demandCRObriefing on Power Blackout Risks,HydroBiomassGeothermalSource:Desertec Foundation,3.2.Historical power blackout events and future scenarios3.2.1.HISTORICAL BLACKOUTSThe ten most severe blackouts concerning affected population and duration,New Zealand20.02.1998Technical failure,a chain reaction caused by a line failure 4 weeks MMM 70,000Brazil(70%of the territory)11.03.1999Natural event,a chain reaction was started when a lightning strikeoccurred at 22h at an electricity substation in Bauru,So PauloState causing most of the 440 kV circuits at the substation to trip.Urban chaos led by huge traffic jams and public subway andsuburban trains systems that were out.5h MMM 97,000,000U.S.A.(North-East)+Canada(Central)14.08.2003(detailed description see Annex)A combination of lack of maintenance,human error and equip-ment failures caused an outage that affected large portions ofthe Midwest and Northeast United States and Ontario,Canada.This area typically has a total electric load of 61,800 MW.Theblackout began a few minutes after 4:00 pm Eastern DaylightTime and power was not restored for 4 consecutive days insome parts of the United States.4 days MMM 50,000,000Economic losses:about USD 6 bnItaly(all Italy,except Sardinia)28.09.2003(detailed description see Annex)Technical failure,a domino effect that ultimately led to theseparation of the Italian system from the rest of the European grid.30,000 people were trapped on trains.Several hundred passengerswere stranded on underground transit systems.Many commercialand domestic users suffered disruption in their power supplies forup to 48 hours.The subway had to be evacuated.18h MMM 56,000,000 Deaths:4Indonesia(Java Island)18.08.2005Technical failure,power failed along the electrical system thatconnects Java,Bali,and Madura,causing outages in Java andBali.This led to a cascading failure that shut down two units ofthe Paiton plant in East Java and six units of the Suralaya plantin West Java.7h MMM 100,000,000Spain29.11.2004Human error/technical failure,ov