CREATE Researchers Adam Rose and Dan Wei are authors of a report on the economic impacts of the City of Los Angeles transitioning to a 100% renewable electricity service provision capability by 2045. The “LA100 The Los Angeles 100% Renewable Energy Study” was recently released by the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL). Professors Rose and Wei co-authored a major chapter of the report with fellow researchers at NREL and Colorado State University. They focused on the aggregate and distributional impacts of this major policy initiative, which is intended to greatly reduce greenhouse gas emissions, ordinary air pollution, and water quantity and quality stresses. They found that some of the nine electricity transition scenarios would lead to job gains, while others with lead to job losses, but that none of the impacts would likely exceed 0.5% of the Los Angeles County economy employment base. They also found that income inequality would be made worse in cases where electricity prices were projected to increase and would be improved where those prices were projected to decrease.

In relation to ongoing research at CREATE, the study also had major implications for electricity reliability and resilience, which would be enhanced by all of the LA100 scenarios because they will increase the amount of “distributed generation.” For example, electricity produced by rooftop solar is not as vulnerable to widespread disruption by disasters or technological accidents that affect central power stations or transmission and distribution lines. Also, elimination of reliance on electricity generated by fossil fuel plants outside of California reduces the vulnerability of the electricity system, because it no longer depends on hundreds of miles of transmission lines crossing earthquake faults and other hazard zones. Not only is reliability improved, but the resilience of electric power systems in terms of their ability to bounce back rapidly after suffering damage is typically enhanced by renewable energy technologies replacing existing, typically large-scale, fossil-fuel power plants.

CREATE publications on electric power, water, and cyber service disruptions include:

Cutler, H., A. Rose, D. Wei, M. Shields, and D. Keyser. 2021. “Economic Impacts and Jobs,” in Final Report: LA100—The Los Angeles 100% Renewable Energy Study. National Renewable Energy Laboratory, Golden, CO. Link

Wing, I., D. Wei, A. Rose, and A. Wein. 2021. “Economic Consequences of the HayWired Earthquake Scenario – Digital and Utility Network Linkages and Resilience," in S. Detweiler and A. Wein (eds.), The HayWired Earthquake Scenario – Societal Consequences: U.S. Geological Survey Scientific Investigations Report 2017-5013-R-W. Link

Sue Wing, I. and A. Rose. 2020 “Economic Consequence Analysis of Electric Power Infrastructure Disruptions: An Analytical General Equilibrium Approach,” Energy Economics 89: 104756. Link 

Ba, Q. and K. Savla. 2020. “Computing Optimal Control of Cascading Failure in DC Networks,” IEEE Transactions on Automatic Control 65(6): 2402-17. Link

Kusumastuti, S., H. Rosoff, J. Blythe, and R. S. John. 2020. “An Empirical Behavioral Study of Deterrence: An Analog Cyber-Attack Simulation Game,” Risk Analysis 40(3): 476-93. Link

Rose, A. and Z. Chen. 2020. “Resilience to a Cyber-Attack on the Detroit Automobile Industry: A Computable General Equilibrium Approach,” in P. Nijkamp, E. Glaeser and K. Kourtit (eds.), Urban Empires, Heidelberg:  Springer. Link

Eyer, J. and A. Rose. 2019. “Mitigation and Resilience Tradeoffs for Electricity Outages,” Economics of Disasters and Climate Change 3(1): 61-77. Link

Rose, A., N. Miller, J. Eyer, and J. Banks.  2019. “Economic Mitigation of and Resilience to Cyber Threats,” in A. Kott and I. Linkov (eds.), Cyber Resilience of Systems and Networks. Heidelberg:  Springer.

Cui, J., H. Rosoff, and R. S. John. 2017. “Deterrence of Cyber Attackers in a Three-Player Behavioral Game,” in S. Rass, B. An, C. Kiekintveld, F. Fang, & S. Schauer (eds.), Decision and Game Theory for Security: GameSec 2017 (pp. 718-736), New York: Springer. Link

Ryutov, T., M. Orosz, J. Blythe, and D. von Winterfeldt. 2015. “A Game Theoretic Framework for Modeling Adversarial Cyber Security Game Among Attackers, Defenders, and Users,” Security and Trust Management (pp. 274-282), London: Springer International. Link

Rose, A., S. Liao, and A. Bonneau. 2011. “Regional Economic Impacts of a Verdugo Earthquake Disruption of Los Angeles Water Supplies:  A Computable General Equilibrium Analysis,” Earthquake Spectra 27(3): 881-906. Link 

Rose, A. and G. Oladosu. 2008. “Regional Economic Impacts of Natural and Man-Made Hazards Disrupting Utility Lifeline Services to Households,” in H. Richardson, P. Gordon and J. Moore (eds.), Economic Impacts of Hurricane Katrina, Cheltenham, UK:  Edward Elgar. Link

Rose, A., G. Oladosu, and S. Liao. 2007. “Business Interruption Impacts of a Terrorist Attack on the Water System of Los Angeles:  A Computable General Disequilibrium Analysis,” in H. Richardson, P. Gordon, and J. Moore (eds.), Economic Costs and Consequences of Terrorist Attacks, Cheltenham, UK:  Edward Elgar. Link

Rose, A., G. Oladosu, and S. Liao. 2007. “Business Interruption Impacts of a Terrorist Attack on the Electric Power System of Los Angeles: Customer Resilience to a Total Blackout,” Risk Analysis 27(3): 513-31. Link

Rose, A., K. Porter, K. Tierney, et al. 2007. “Benefit-Cost Analysis of FEMA Hazard Mitigation Grants,” Natural Hazards Review 8(4): 97-111. Link

Rose, A. and S. Liao. 2005. “Modeling Regional Economic Resilience to Disasters:  A Computable General Equilibrium Analysis of Water Service Disruptions,” Journal of Regional Science 45(1): 75-112. Link

USC researchers partner with the U.S. Energy Department and city of Los Angeles to help chart a course to a zero-emissions future for the city — one of the biggest studies of its kind by the federal government.

Photo credit: Lucas Temporelli

Powering Los Angeles entirely with renewable energy can be accomplished without significant disruption to the economy or lifestyles over the next 25 years, if not sooner, according to new research conducted by USC experts for the city and federal government.

The new “LA100 The Los Angeles 100% Renewable Energy Study” was released Wednesday by the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL).  The report concludes the city may reach its ambitious goal to convert entirely to renewable energy by 2045 through rapid deployment of wind and solar power, electrical storage and other technologies.

Moreover, the study says that by 2030, the electrical power generation sector can achieve dramatic reductions in greenhouse gases – from 76% to 99% less than 2020 levels – if L.A. begins in earnest now.

A USC partnership for a sustainable future

The study was prepared in a partnership between the city Department of Water and Power and NREL. USC professors at the Price School of Public Policy and the Viterbi School of Engineering, as well as experts at other universities, contributed to the report.

“We can get to 100% renewable energy by 2045. It will be hard, but it can be done,” said Kelly Sanders, associate professor of civil and environmental engineering at the Viterbi School. “We have the technical ability to do it, and it will involve a lot of changes that will affect everything from our water supply to buildings, transportation to energy production.”

The study addresses issues including: the best path to reach 100% renewable energy reliably and cost-effectively; greenhouse gas emissions (GHGs) reductions; health and economic impacts; and impacts for low-income and disadvantaged communities. Currently, the city gets about half its power from carbon-free energy.

The contributing USC professors include Sanders and George Ban-Weiss of the USC Viterbi School, and Adam Rose and Dan Wei of the Price School of Public Policy and Schwarzenegger Institute. Professors at Colorado State University also contributed.

Here is a summary of the USC researchers’ findings:

Economy and jobs. L.A.’s switch to renewable energy would likely have minimal impacts on the economy, USC researchers project. Job impacts would be minimal in percentage terms because the region’s economy is so massive. The USC economists’ model shows that, in the worst-case scenario, average annual job losses could total about 3,600 over the entire planning period. But a moderate scenario shows gains of about 4,700 jobs annually between 2026 and 2045. The differences depend on a mix of factors, including the compliance year for 100% renewable energy, whether the use of tradable renewable energy credits is allowed, whether biofuels are included in the technology mix, and other factors. In either instance, those impacts reflect changes of less than one-half of 1% to the L.A. economy.

The researchers project some 8,600 construction jobs annually to build production and transmission facilities for wind, solar and geothermal power. Another 2,000 maintenance jobs would accrue in 2026 to 2045.

“For various alternative technology scenarios examined in the study, there could be slight positive or negative impacts compared with the minimal compliance scenario, but the changes are small compared to the 3.9 million jobs and $200 billion in annual output in the L.A. economy overall and thus have an almost negligible impact,” Wei said.

Water supply. Ensuring a safe and reliable water supply in L.A. will cost DWP more energy in the future. The challenge lies in L.A.’s Green New Deal, which aims to source 70% of the city’s water locally and recycle all of the city’s wastewater by 2035, according to the study. However, since water can be treated and stored, the water sector could be a valuable asset for integrating high fractions of renewable energy into the grid if electricity consumed for treatment and pumping could be timed with periods when wind and solar are abundant.

Although less electricity would be needed to move water from the Colorado River or Owens Valley, reducing these water imports by creating more local water supplies would require more electricity sourced locally from DWP for developing new local water projects through advanced wastewater treatment, groundwater recharge, stormwater management, and water recycling projects. LA100 anticipates that by 2050, the total electricity consumed by the city for its water system could increase 3 to 5 times current levels to meet its sustainable water goals. Overall, the proportion of the projected load for water would grow slightly from about 1.3% to 3.2% over the study period.

Air quality and health. Zero-emissions technologies are good news for air quality and health. The researchers found that emissions of nitrogen oxides from the sectors investigated in the study could be reduced by 86% to 95%, depending on the pathway followed. Emissions of fine particulate matter, or PM2.5, could be reduced by 38% to 62%. The emissions reductions were driven by electrification of vehicles, buildings and the Port.

“The air pollution improvements would save lives and reduce pollution-induced illness. It would be noticeable, the sky would look cleaner,” said USC professor Ban-Weiss.

A far-reaching study of the urban future

The LA100 study looked at a host of issues that impact the transition: the electrical grid, transportation, buildings, water, jobs, economy, demographics, air quality and health, GHG emissions and environmental justice.  State law, SB100, requires renewable energy and zero-carbon resources supply 100% of electric retail sales to end-use customers by 2045.

NREL is the Energy Department’s primary laboratory for clean-energy sources. The LA100 study is the biggest and most complex report NREL has produced for a municipality, due in part to the size of Los Angeles and the fact the city’s utility, DWP, owns its own generation, transmission and distribution system. It is hoped that the study can aid other big cities in similar efforts, as outlined in the Biden administration’s plan for sustainable infrastructure and transitioning to clean energy.

CREATE Director and Price School Research Professor, Adam Rose, and CREATE Research Fellow and Price School Research Associate Professor, Dan Wei, are co-authors of the recently released report, Economic Consequences of the HayWired Scenario—Digital and Utility Network Linkages and Resilience, published by the U.S. Geological Survey. The study was led by Ian Sue Wing of Boston University and contributed to by Anne Wein of USGS.  This is the fourth USGS disaster scenario that incorporates economic consequence analysis in which USC researchers have played a major role. These include the Great Southern California ShakeOut earthquake scenario on the San Andreas Fault (link), the ARkStorm “atmospheric river” severe winter storm scenario (link), the California tsunami scenario (link), and the current study of a major earthquake on the East Bay Hayward Fault and its relationship to electric power and communication systems.

This study undertakes a comprehensive evaluation of the economic impacts of the HayWired earthquake scenario on the greater San Francisco Bay region’s economy, using a detailed multiregional static computable general equilibrium model, for six months following the event.  Economic impacts are estimated in terms of Gross Regional Product (GRP, or business interruption losses) caused by both capital stock losses and water and electric utility and telecommunications service disruptions after the hypothetical 7.0-magnitude earthquake  The simulations evaluate how the economy is affected, including how it adjusts to damages and disruptions transmitted through price changes, which spur the reallocation of resource use, primarily through substitutions of inputs and geographical redistributions. The capability to implement such substitutions is an important measure of the inherent resilience of the macroeconomy. The study also evaluates the potential effectiveness of various additional inherent and adaptive microeconomic resilience tactics that can greatly reduce business interruption losses from the disaster.  

A special focus of the HayWired scenario analysis was the study of the core of the digital economy, made up of the telecommunications, data hosting and processing, internet publishing and broadcasting, and other related service sectors. This report represents one of the first efforts to comprehensively investigate the economic impacts of disruptions to telecommunications following a major earthquake scenario. The study identifies a few unique features in terms of the impacts, restoration, and resilience potential of telecommunication service disruption. Compared to other common utilities, such as water and power service disruptions, a surge in the demand for telecommunications is observed immediately after the earthquake because of the need to communicate with family, friends, and first responders, which results in a major overload to the networks. The restoration of telecommunication services is very dependent on electric power, so the service restoration of data/voice in general will lag behind power restoration. However, telecommunications has a more flexible infrastructure than other critical lifelines, such as water pipes in the ground, in terms of resilience. This study identifies a few especially effective supplier-side resilience tactics, such as portable backup generators for cell sites and mobile cell sites on wheels or light trucks (COWs or COLTs), to help temporarily restore some capacity of data/voice services.  At the same time, the importance of the recovery of telecommunications is illustrated by assumptions about telework in sectors that reduce economic impacts (which is also evidenced during the current COVID-19 pandemic).  The analysis indicates that telework reduces estimated GRP losses emanating from property damage by a few billion dollars (6% of baseline GRP). 

The study indicates that every resilience tactic, or business continuity practice, implemented by businesses, sector alliances, and governments—including utility and digital economy sectors—preserves economic activity for their organizations, as well as that of others, through sectoral and geographic economic linkages after this potentially devastating scenario earthquake strikes.

Some bottom line results include:

• Total GRP losses without resilience are estimated to be $44.2 billion (or 4.2% of California’s GRP). 

• Total losses could be reduced to $25.3 billion (a reduction of 43%) if various resilience tactics are implemented.

• Business Interruption (BI) losses from property damage represent the dominant cause of economic effects. 

• Losses are concentrated in five San Francisco Bay region counties that are most directly affected by earthquake, accounting for 80% of the total GDP losses.

• Sectors most impacted statewide include real estate, manufacturing, healthcare, and professional, scientific, & technical services.

• Restoration of communications (primarily data/voice) services very much depends on the availability of electric power. 

• The speed and extent of the restoration of data/voice services affect the implementation of some important resilience tactics, such as telework.

• Resilience tactics having the greatest loss reduction potential effect include: 

o BI losses from property damages and power service disruption – production recapture 

o BI losses from water service disruption – production isolation

o BI losses from data/voice service disruption – production isolation combined with the use of portable equipment by telecommunication carriers

The authors point out that the methodology and insights from this report are generalizable to many other types of natural disasters, technological accidents, and terrorist attacks, including the major disruption of the electric power and water systems due to the recent ice storms in Texas.

The full report can be accessed here.

Sue Wing, I., D. Wei, A. Rose, and A Wein. 2020. “Economic Consequences of the HayWired Scenario—Digital and Utility Network Linkages and Resilience," in S. Detweiler and A. Wein (eds.), The HayWired Earthquake Scenario—Societal Consequences,  U.S. Geological Survey Scientific Investigations Report 2017–5013–R–W, Reston, VA.  

Updated April 6, 2021