Severe Weather and Adaptation Solutions
Heatwaves in the US, UK, and China have continued to bring record breaking temperatures this summer. In the US, more than 100 million people have been affected by recent heatwaves that have prompted declarations of heat emergencies or extreme heat advisory warnings. In many cases, local temperatures exceeded 100 degrees Fahrenheit, even climbing past 110 degrees F in certain instances. In the UK, the UK Met Office Weather Agency recorded a provisional temperature reading in eastern England of 40.3 degrees Celsius, or 104 degrees Fahrenheit, on July 19th.[1] This temperature, along with 29 other areas in the country, broke the previous UK record of 38.7 degrees C. Since heatwaves, droughts, floods, and other severe weather events are expected to become more frequent and intense in the future, society must invest in adaptation solutions such as heat pumps, smart grid management, and precision irrigation technology to increase resilience to these events.
Global adaptation efforts are currently insufficient to deal with the rising occurrences of extreme weather events. Take, for example, the US electric grid. As temperatures rise, consumers and businesses demand more grid electricity to power air conditioners. However, the aging electrical grid struggles to keep pace with demand during heatwaves, leading to widespread blackouts. In the US, grid operators are now offering prizes such as Peloton bikes and Costco gift cards for customers who cut power use, desperate to reduce power demand and avoid blackouts.[2] If people are not able to rely on electrical grids during heatwaves, the lack of access to air conditioning or other cooling technology will have adverse health consequences.
The Essex Global Environmental Opportunities Strategy (GEOS) invests in solutions to this problem: heat pumps and smart grid management. Electric heat pumps are an energy efficient alternative to incumbent heating and cooling technologies that can provide heating in cold months and cooling in warmer months. Unlike energy intensive air conditioners, heat pumps are a highly efficient cooling solution that can reduce the strain on the electric grid during heatwaves. Heat pumps are experiencing significant growth in Europe where heatwaves are becoming more frequent and less than 5% of European households have access to air conditioning. As an added benefit, heat pumps can also help Europe decarbonize heating systems and reduce dependency on Russian natural gas. In the US, heat pump growth has accelerated recently due to rising consumer awareness, policy support, and improving performance in cold weather. GEOS also invests in smart grid management technology to help utilities better manage energy supply and demand. Smart grid management solutions help utilities better prepare for severe weather events and the shift from centralized to distributed power distribution. Smart, networked devices enable digital monitoring of energy consumption, increased connectivity, and greater control of utility assets to improve grid reliability and efficiency. Energy storage systems, such as battery storage, support peak load managing by storing excess renewable energy production for times of high electricity demand. These solutions can help utilities avoid blackouts during heatwaves and create a more resilient and efficient electric grid.
Agriculture is another economic activity that needs to invest in adaptation solutions to prepare for severe weather events. To satisfy global food demand, farmers rely on consistent rainfall and access to water resources for irrigation. However, more frequent heatwaves and droughts are expected to reduce water availability in many farming areas. This creates an obstacle for farmers that must increase agricultural yields to support higher standards of living and a growing global population. GEOS invests in a solution: precision irrigation technology to help farmers reduce water use and increase agricultural yields. By facilitating more precise irrigation application, smart irrigation technology can help farmers increase the quality of water application while reducing total water use. This technology enables farmers to increase yields by ensuring crops receive the optimal amount of water, helping increase agricultural production while coping with less abundant water resources.
The current and future impacts of extreme weather events illustrate the importance of global adaptation efforts. Despite helping address a key issue facing society and having a robust growth outlook, climate adaptation is an underappreciated investment opportunity. GEOS recognizes the attractive growth outlook for adaptation and invests in solutions like heat pumps, smart grid management, precision irrigation, desalination, and water treatment to increase resilience to severe weather events. The investment opportunities are not limited to these solutions, however, and include other intriguing areas like drought resistant crops, synthetic biology, controlled environment agriculture, and early warning weather systems.
Disclosures:
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[1] Danica Kirka and Jill Lawless, UK Breaks Record for Highest Temperature as Europe Sizzles. The Associated Press. https://apnews.com/article/wildfires-france-fires-london-england-b9bc07c1685b76ddf377b65f19fb811b
[2] Shoko Oda and Naureen S Malik, Utilities for New York to Tokyo Offer Prizes to Cut Power Use. Bloomberg. https://www.bloomberg.com/news/articles/2022-07-21/energy-firms-offer-pelotons-and-gift-cards-to-encourage-power-savings?srnd=premium
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