{"id":1003,"date":"2018-11-08T11:05:00","date_gmt":"2018-11-08T11:05:00","guid":{"rendered":"https:\/\/gencell.preprodenv.com\/?post_type=ressources&p=1003"},"modified":"2024-02-29T09:58:36","modified_gmt":"2024-02-29T09:58:36","slug":"hurricane-florence-the-economic-costs","status":"publish","type":"ressources","link":"https:\/\/www.gencellenergy.com\/resources\/blog\/hurricane-florence-the-economic-costs\/","title":{"rendered":"Hurricane Florence: The Economic Costs"},"content":{"rendered":"\n
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\n Blog<\/a>\n

\n Hurricane Florence: The Economic Costs <\/h1>\n\n
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<\/div> Shelli Zargary<\/span>\n November 8, 2018<\/span>\n <\/div>\n <\/div>\n\n
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It goes without saying that loss of human life is the most devasting consequence of Hurricanes and natural disasters. \u00a0This is followed by the hardship and suffering caused by destruction of personal property, fear for public health and safety and the long, hard work of cleaning-up and rebuilding homes and communities. As of October 2, <\/span>51 people<\/a>\u00a0had died from Hurricane Florence and 1 million people had been forced to evacuate their homes.<\/span><\/p>\n

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In this blog however, we seek to explore another impact of Hurricanes and natural disasters \u2013 the economic costs \u2013 and\u00a0how utilities have the power to mitigate some of the damages<\/strong>.<\/p>\n

The numbers stack up<\/strong><\/p>\n

While damaging the economy and causing economic hardship, the\u00a0long-term economic impacts\u00a0<\/a>\u00a0of hurricanes and natural disasters are viewed differently depending on the eyes of the beholder. In 2017, Hurricane Harvey destroyed $125 billion worth of property in Houston and Moody\u2019s Analytics concluded that lost economic output was just $8.5 billion or 0.04% of the US economy\u2019s $19 trillion of economic output.
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Hurricane Harvey. (Source: NASA\/NOAA)<\/p>\n

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Analyzing economic data from hurricanes over the last two decades, Moody\u2019s found that this was not an isolated incident and concluded that hurricanes don\u2019t have a long-lasting impact on the larger economy. This can be seen in the graph below that breaks down the costs of storms into the property damage (dark blue) as well as the lost output\/economic output (light blue):
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Moody\u2019s findings concur with the 2018 Texas State Comptroller report that found that the effect of Hurricane Harvey on the Texas state economy was\u00a0much less than expected<\/a>.<\/p>\n

The report demonstrates that while\u00a0direct damages<\/em>\u00a0such as the destruction of public buildings, private property, vehicles and infrastructure represent the most obvious and visible effects of the hurricane, they are \u201csunk\u201d costs whose economic activity has already taken place. Economic output is actually affected by\u00a0indirect damages<\/em>\u00a0that interrupt business activity\u2014such as\u00a0electrical outages<\/a>, damage to factories, the inability of employees to reach work, inoperative ATM machines and more.<\/p>\n

The Texas Comptroller\u2019s report concluded that the rebuilding and repair after Hurricane Harvey spurred economic growth as more than\u00a0$31 billion dollars<\/a>\u00a0poured into the state economy from US Federal agencies, private insurance companies and non-profits, giving the economy a jump start until it could recover.<\/p>\n

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Disruption and Power Outages<\/strong><\/p>\n

As of September 17, nearly\u00a01 million customers<\/a>\u00a0suffered power blackouts in North Carolina and neighboring states. By Wednesday September 19,\u00a0200,000 Duke Energy customers<\/a>\u00a0in North Carolina were still without power.<\/p>\n

With record rainfalls, including\u00a033.89 inches<\/a>\u00a0in Swansboro, North Carolina, and a storm surge expected to reach up to 11 feet, Hurricane Florence forced 1 million people to evacuate their homes. Money spent on hotels or sleepless nights in school gymnasiums is only compounded by the fear of the destruction to personal property and the long, hard work of clean-up.<\/p>\n

Moreover, the suffering caused by natural disasters can often be compounded by environmental disasters. The heavy rains of Florence have\u00a0swamped coal ash dumps<\/a>\u00a0of coal-burning utilities and breached earthen dams that store\u00a0hog and animal refuse<\/a>, threatening water supplies and public safety.<\/p>\n

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Source:\u00a0https:\/\/www.duke-energy.com\/outages\/current-outages<\/a><\/p>\n

\u00a0<\/strong><\/p>\n

Mitigating the Hardships<\/strong><\/p>\n

Efficient hurricane relief work by local and state governments can play a critical role in mitigating public hardship. Unfortunately poor governance and mismanagement can also intensify suffering as witnessed in Puerto Rico after Hurricane Maria in 2017.<\/p>\n

Technology upgrade programs by utilities can play a critical role in mitigating the suffering caused by blackouts. During Hurricane Harvey, 350,000 people lost electricity, but earlier upgrades to transmission lines and grid systems ensured that damages to power-generating systems\u00a0were not extensive<\/a>. In addition, the Houston-based utility, Entergy, deployed\u00a0mobile electric substations<\/a>\u00a0to temporarily replace substations submerged by flood waters.<\/p>\n

During grid power failures, fuel cells, such as the\u00a0GenCell G5rx utility backup solution<\/a>, can supplement the 6-8 hours of electricity provided by batteries to critical systems like autoreclosers. Using hydrogen-based fuel cell power, the GenCell solution provides power until the grid recovers\u2014even if it takes days or weeks. The solution has already been\u00a0rolled out<\/a>\u00a0to California utility\u00a0SDG&E<\/a>.<\/p>\n

SDG&E also took a novel approach with a microgrid solution for Borrego Springs, a small desert town that suffers from flash floods. Rather than deploying a parallel transmission line, they created a\u00a0microgrid<\/a>\u00a0using generators, batteries and rooftop solar PVs at one-fourth the CAPEX.<\/p>\n

Another technique is to preposition equipment or prepare a large restoration workforce with volunteers or workers from other utilities. In 2017 after Hurricane Irma, Florida Power & Light (FPL) had a force of 24,000 personnel, including\u00a013,000 supplemental workers<\/a>\u00a0from contractors and other utilities from across the North America as part of a volunteer mutual assistance program.<\/p>\n

Investing nearly\u00a0$3 billion in infrastructure<\/a>\u00a0also helped FPL build a stronger, smarter and more storm-resilient energy grid that allowed them to restore power much faster. Improvements to their grid included:<\/p>\n