Assessing the impact of space weather on the electric power grid based on insurance claims for industrial electrical equipment

TL;DR

This study analyzes insurance claims to quantify how space weather, specifically geomagnetic activity, impacts the North American electric power grid, revealing a significant correlation between geomagnetic disturbances and equipment failures.

Contribution

It provides the first large-scale statistical evidence linking geomagnetic activity to electrical equipment damage and quantifies the economic impact of space weather on the power infrastructure.

Findings

Claims increase by 20% on the most geomagnetically active days.

Over half of claims are due to electrical surges related to space weather.

Approximately 500 claims per year are linked to space weather effects.

Abstract

Geomagnetically induced currents are known to induce disturbances in the electric power grid. Here, we perform a statistical analysis of 11,242 insurance claims from 2000 through 2010 for equipment losses and related business interruptions in North-American commercial organizations that are associated with damage to, or malfunction of, electrical and electronic equipment. We find that claims rates are elevated on days with elevated geomagnetic activity by approximately 20% for the top 5%, and by about 10% for the top third of most active days ranked by daily maximum variability of the geomagnetic field. When focusing on the claims explicitly attributed to electrical surges (amounting to more than half the total sample), we find that the dependence of claims rates on geomagnetic activity mirrors that of major disturbances in the U.S. high-voltage electric power grid. The claims statistics thus reveal that large-scale geomagnetic variability couples into the low-voltage power distribution network and that related power-quality variations can cause malfunctions and failures in electrical and electronic devices that, in turn, lead to an estimated 500 claims per average year within North America. We discuss the possible magnitude of the full economic impact associated with quality variations in electrical power associated with space weather.