Canadian Underwriter

Solar storms pose risks to Canada’s aging electric power grid

October 26, 2021   by Philip Porado

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The sun brings light, warmth … and solar flares that pose risks for aging power grids in Canada and worldwide, panellists told a recent Property and Casualty Insurance Compensation Corporation (PACICC) webinar on emerging risks.

While routine blackouts generally happen due to severe storms, human error and other factors, and are usually confined to smaller localities, solar storms have the potential to create larger and more widespread disruption, said Dr. Eric Durand, head, cyber center of competence, director, Swiss Re Institute, Swiss Re Management Ltd.

He added solar storm and sunspot activity follows an 11-year cycle and the next maximum is expected to peak around 2025. The good news is that the sunspot cycle only impacts the frequency of solar storms, not their intensity.

Under the right circumstances solar flares can produce geomagnetically induced current (GIC) that our AC power systems can’t handle. Among other things, Durand said, those disturbances can cause stray currents that burn tiny holes in the insulation around the transformer windings. That can cause the copper coils to fuse to neighbouring transformer coils.

“And then you can throw away the whole machine,” he said. “You cannot repair it. It’s gone.”

That’s a significant risk for Canada because most of the transformers in North America’s power grid were built in the 1970s with a designed lifetime of 40-to-50-years.

“It’s over-aged equipment that is implemented in the North American power grid, on the Canadian side as well as on the U.S. side,” he added.

Then there are the industrial impacts, noted Dr. Jan Eichner, senior consultant, corporate underwriting non-life at Munich Re.

He used the example of melting ovens that are designed to hold consistent high temperatures. Such units might survive for one or two days without electricity. “But then suddenly that molten metal will solidify and you can throw away the whole thing,” he said.

Likewise, optical fibre networks on which businesses depend aren’t directly vulnerable to GIC events but do need electricity to function. So if the grid goes down, so do they.

Both panellists noted Canada has done some things to harden its power grid and while the frequency of storms is higher in places closer to the magnetic polls, the more severe events happen further south. Given the interconnection of North America’s power grids, Canada doesn’t get off the hook.

The bigger issue, Durand said, is that if protections are placed on one area of a network of transformers, a problem would just be passed to the next weakest link in the node. He noted models suggest that could lead to a segment of the grid losing power for months or even up to a year. If that happens, losses could be measured in the trillions of dollars.

The risk also goes well beyond power grids. Eichner noted solar storms can disturb or damage satellites and disrupt things like ultra-precise timing signals from GPS systems on which banks depend heavily. “They have very precise clocks on reserve but that doesn’t go out without some disturbance,” he said.


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