How cities must plan for resilient power


If the frequency of extreme weather events represents the tipping point for wider public acceptance of the reality of climate change, then Superstorm Sandy, which decimated much of the Northeast in 2012, is a leading marker of that acceptance, at least in the U.S. In New Jersey alone, more than 2 million households lost power during Sandy, many for extended periods of time; and a 2013 report by the National Oceanic and Atmospheric Administration concluded, “Climate-change related increases in sea level have nearly doubled today’s annual probability of a Sandy-level flood recurrence as compared to 1950.” 

As the effects of Sandy indicated, the infrastructure of most if not all states in the path of hurricanes is unprepared to deal with such events. The way in which electrical power is distributed — through centralized grids — makes the region far more vulnerable to massive power outages. Furthermore, as a recent report from the Vermont-based Clean Energy Group pointed out, “the old fallback of diesel generators ... failed miserably in Sandy.”

What is needed, the report continued, are “new alternatives (...) technologies that run all the time and don't fail when they are needed the most. New technologies like solar PV plus energy storage (solar + storage), microgrids, and fuel cells have become serious policy choices for the future.”

CEG's report, "Resilient Power: Financing Options for Clean, Resilient Power Solutions," focuses on increasingly successful strategies being deployed by states and municipalities to fund distributed energy solutions. Even before Sandy, Connecticut established the Clean Energy Finance and Investment Authority, a green bank which, according to the Brookings Institute, is "a quasi-public corporation into which are combined existing state clean energy and energy efficiency funds so as to permit private investment in the bank and enable the new entity to make loans and leverage its capital with private capital."

In the aftermath of Sandy, Connecticut established “a three-year, $45 million microgrids program,” CEG reported. “That program is now in its second round of funding, with 11 projects awarded grants, and a third round has yet to go out.”

Other states, in the Northeast and beyond, have established their own mechanisms for encouraging the development of distributed power systems. New Jersey, for example, announced earlier this year the formation of the nation's first Energy Resilience Bank (PDF). “Utilizing $200 million through New Jersey’s second Community Development Block Grant-Disaster Recovery allocation, the ERB will support the development of distributed energy resources at critical facilities throughout the state,” a press release stated.

“This represents good progress, but much more work needs to be done if we are to meet the many finance challenges we face,” CEG's report stated. “We must move beyond state grants and loans, and begin to make use of innovative financing models that are available to municipalities to fund infrastructure and critical facilities. It is at the municipal level where the rubber meets the road, in terms of disaster planning and technology deployment.”

With federal government subsidies for green energy deployment on the wane, it is essential that issuance of bonds in various forms be used to fund a distributed energy infrastructure; bond issues for infrastructure have “literally built America,” the report stated. “The challenge is therefore to apply these proven bond finance tools to clean energy to greatly scale up investment in clean energy infrastructure.” The Green Bond Program launched by New York City, the report observed, “is likely to become a model for the country.”

“New public resources combined with innovative, new financing models — as well as with established finance tools used in new ways — can be applied to resilient power for critical facilities and infrastructure,” CEG stated.

This article first appeared at Social Funds.