Monthly Archives: July 2016

Resilience: time for a new approach?

 

No one wants power cuts, water restrictions or sewer flooding.    Equally, a one-hundred per cent service guarantee is neither feasible nor affordable. Drawing on the latest New-Pin discussion paper on Long-run resilience in energy and water, Sharon Darcy explains why approaches to resilience that focus on risk management and adaptive planning are becoming increasingly important.

Until recently, most discussions about resilience in energy and water were largely focused on the reliability of infrastructure and the security of big bits of kit.  This mirrored the frequently traditional approach to ensuring resilience through supply side solutions where ‘hard’ engineering interventions were able to bring a degree of certainty to service delivery.

Led by the energy sector, ‘softer’ demand side approaches are now getting more traction, along with an increasing focus on consumer and commercially led solutions that can help to address the supply / demand balance in a sustainable way.  Some people argue that demand-side measures may turn out to be less dependable than those on the supply side. But, faced with uncertainty about the future, demand-side developments may also offer diversity and flexibility for both sectors.

As approaches to resilience have evolved, so too has the way in which the issue is ‘framed’ in discussions.  There is now broad agreement that as well as having a technical dimension, resilience also has social and environmental dimensions, for example, which recognise that energy and water are part of wider services and systems.

Climate and technological change, and the significant unknowns these bring, are driving new ways of thinking about resilience in energy and water.  Most visibly, this can be seen through the impact of extreme risks – such as intense rainfall leading to flooding, or thinking on cyber crime. Responses to each are highly dependent on effective approaches to public communication.

Less obvious, perhaps, is the fact that we are increasingly dependent on electricity for the digital connectivity that drives every aspect of our lives.   When the power goes down, computing and communications systems can be ‘disabled’ – having a knock on effect not only on energy and water resilience but also more broadly.  The floods in Lancaster in December 2015 provide stark evidence of these wider impacts.

The fact that the energy and water sectors are becoming both increasingly complex and more interdependent can accentuate this problem.  Many of the approaches designed to secure future long-run resilience, such as desalination or carbon capture and storage, may in practice bind the sectors more tightly together.  Changing consumer and citizen expectations, such as the desire for constant broadband connectivity, are also leading to pressures for improved contingency planning and more innovative ways to respond, and recover, when services fail.

The development of more local and regional resilience solutions pose new opportunities and risks.  Whilst decentralised approaches can be attractive, they raise questions about what happens to existing networks.  Similarly, new cross-sector approaches can help avoid single-point failures and may potentially lead to combined energy and water efficiency packages.  However, they also add to the complexity of decision-making; thinking about, let alone delivering, a ‘system of systems’ approach to resilience is a major challenge.  Market solutions to resilience are providing flexibility and innovation but can also lead to the increased fragmentation of services, requiring transparent rules for access-pricing and a need to ensure the end to end customer experience is, within reason, secured against future shocks.

Stakeholder engagement, both as consumers and citizens, is important in a world where the demand side plays a bigger role in securing resilience.  More attention is needed on how to capture stakeholder views on cross-sector issues effectively.  Re-examining existing standards which may be strongly engineering-based may also help with addressing future resilience.  In energy, for example, deterministic standards can be inflexible.  A more risk-based and tailored approach to standard setting may be more appropriate given uncertainties.

Resilience needs strong leadership to bring together the wide range of actors needed to deliver it. There is already much going on in the sectors with significant scenario planning being undertaken.  Doing more to share lessons and mainstream good practice should be relatively easy.

The harder task is likely to be to ensure leadership when resilience solutions raise distributional questions or when the most appropriate approach may require coordination between institutions and funding streams. The following resilience principles may be of help here:

  • Risk based – take account of the full range of risks, including systemic risks.
  • Agile – build in optionality and adapt to changing circumstances.
  • Engaged stakeholders – ensure that the public are engaged and that this shapes decisions.
  • Understanding of affordability – take account of fairness, including across generations.
  • Cross-sector view – ensure approach is holistic and joined up technically, commercially and from the citizen and consumer view-point.
  • Partnerships and collaboration – build connections and promote diversity.
  • Transparency – share assumptions, clarify responsibilities & explain decisions.

Managing risks in a proactive way and using an adaptive planning approach is likely to bring greater benefits than putting on a hard hat or pair of wellies mid-crisis and calling for immediate – and visible – action.