2013. Lloyd’s Solar Storm Risk to the North American Electric Grid. Atmospheric and Environmental Research.
Society depends on electricity for everything from communication, banking and business transactions to basic necessities like food and water.
Executive Summary
A Carrington-level, extreme geomagnetic storm is almost inevitable in the future. Historical auroral records suggest a return period of 50 years for Quebec level storms and 150 years for very extreme storms, such as the Carrington Event that occurred 154 years ago.
The risk of intense geomagnetic storms is growing as we near the peak of the current solar cycle in early 2015. Solar activity follows an 11-year cycle.
As the North American electric infrastructure ages and we become more and more dependent on electricity, the risk of a catastrophic outage increases with each peak of the solar cycle. Our society is becoming increasingly dependent on electricity. Because of the potential for long-term, widespread power outage, the hazard posed by geomagnetic storms is one of the most significant.
Weighted by population, the highest risk of storm induced power outages in the US is along the Atlantic corridor between Washington D.C. and New York City. This takes into account risk factors such as magnetic latitude, distance to the coast, ground conductivity and transmission grid properties. Other high risk regions are the Midwest states, such as Michigan and Wisconsin, and regions along the Gulf Coast.
The total U.S. population at risk of extended power outage from a Carrington-level storm is between 20 and 40 million, with durations of 16 days to 2 years. The duration of outages will depend largely on the availability of spare replacement transformers. If new transformers need to be ordered, the lead time is likely to be a minimum of five months. The total economic cost for such a scenario is estimated at half a trillion to $2.6 Trillion U.S. Dollars.
Storms weaker than Carrington-level could result in a small number of damaged transformers (around 10-20), but the potential damage to densely populated regions along the Atlantic coast is significant. The total number of damaged transformers is less relevant for prolonged power outage than their concentration. The failure of a small number of transformers serving a highly populated area is enough to create a situation of prolonged outage.
A severe space weather event that causes major disruption to the electricity network in the US could have major implications for the insurance industry.