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An editorial to the Special Issue on “Severe climate Risks”

The history of this Special Issue (https://www.sciencedirect.com/special-issue/10JD7LNJNQ0) indirectly dates back to the early 1990s, when the signature of the United Nations Framework Convention on Climate Change kicked-off an international political process based on one overarching and foundational principle: to avoid “dangerous anthropogenic interference with the climate system” at the global level. More than three decades later, such a principle remains central, though complementary aims made their way through the climate negotiation process, such as the importance of ensuring equity and justice, to give just one example here. Scientific knowledge also considerably progressed and we know more about the range of risks that climate change imposes and will continue to impose to the biosphere and humankind, worldwide and at all territorial levels. It is also clear that societal responses to these risks —“climate adaptation” as we know it— are increasingly happening, but definitely not at the pace of climate risk trends (Berrang-Ford et al., 2021, Erisken et al., 2021, Olazabal and Ruiz De Gopegui, 2021, Magnan et al., 2023a, Reckien et al., 2023, UNEP, 2023). As a result, concerns have emerged over the recent years in both the scientific and policy arenas around the idea that societies may not be able to address all climate risks, and that limits to adaptation and induced residual risks need to be considered more seriously. Such concerns further highlight the continuing importance of the imperative to minimise dangerous anthropogenic interference with the climate system, at any scale. But what does “dangerous interference” mean? How can we decide that we are entering the “dangerous” space, compared to a broader range of climate risks that would qualify as problematic but not necessarily “dangerous”? Who should make such a decision? Which conditions drive risk severity over time, including in the future? And what would be the environmental, economic, social and cultural implications of prioritising some climate risks over others? The Intergovernmental Panel on Climate Change (IPCC) was a pioneer in addressing such questions through the development of the “Key Risks” framing that describes those climate risks having the potential to become dangerous or “severe” over the course of this century (Schellnhuber et al., 2006, Schneider et al., 2007, Oppenheimer et al., 2014, O’Neill et al., 2022). The Fifth and Sixth assessment cycles (AR5 and AR6) went a step further by identifying about 120 Key Risks across regions and sectors, and clustering them into 8 “Representative Key Risks” covering a range of geographical systems (low-lying coasts, and to terrestrial and ocean ecosystems), sectors (critical infrastructure, living standards, human health, food security, and water security) and human dimensions (peace and mobility) (Oppenheimer et al., 2014, O’Neill et al., 2022). This Special Issue was born of the efforts of a range of authors, during the development of the IPCC AR6 main Assessment Report between 2019 and 2022, to characterise Key Risks and Representative Key Risks, and advance knowledge on what shapes “severe climate risks” conceptually as well as in the real-world. The series of papers forming this Special Issue is not intended to cover the topic exhaustively, but rather to give readers an overview through the following narrative: defining “severe climate risks” is highly challenging (Magnan et al., 2023b), but knowledge is expanding on the driving climate hazards (Tebaldi et al., 2023) and their implications on geographical systems, sectors and human dimensions, using here food security (Mirzabaev et al., 2023), human mobility (Gilmore et al., 2024) and peace (Buhaug et al., 2023) as illustrative examples. The overall intention is to support especially decision-makers, whatever the scale or sector considered, in asking severity-driven questions to identify sector- and context-specific “priority” risks from climate change.

54 ENVIRONMENTAL SCIENCES

Demand response event simulator and risk-aware bidding tool for industrial customers

Incentive Based Demand Response (IBDR) program participation delivers financial benefits to the consumers and resiliency benefits to the electricity grid. Effectively participating in these programs as an industrial consumer requires bidding strategies that balance financial risk with operational constraints. Existing bidding tools tend not to fully incorporate stochastic IBDR event modeling, program specific baseline and payment/penalty calculations, or demand reduction process control schemes that account for the cascading impacts of shutdown in complex facilities. Here, this work presents an IBDR event simulator and risk-aware bidding framework tool integrating three key components: a flexible, parameterized demand response event generator that rigorously accounts for program structures and stochasticity, a demand response operational simulation model that generates explicit control strategies for load reduction, and a Monte Carlo simulator to evaluate financial risk for varied capacity bids. A case study at a wastewater treatment plant participating in PG&E's Capacity Bidding Program demonstrates the framework's utility. In the peak capacity price month of August, optimal bidding by the wastewater treatment plant nets a mean IBDR benefit of $101,000 (67% of the August electricity bill) with 0.4% probability of a financial loss. This framework enables industrial operators to make informed bidding decisions, negotiate better program terms with demand response load aggregators, and analyze energy flexibility investments at their facilities. Ultimately, this work reduces participation barriers in IBDR programs and supports the broader goal of enhancing grid reliability and renewable energy integration.

29 ENERGY PLANNING, POLICY, AND ECONOMY

Renewable Energy and Efficiency Technologies in Scenarios of U.S. Decarbonization in Two Types of Models: Comparison of GCAM Modeling and Sector-Specific Modeling

Energy system projections from analytic models inform actions ranging from short-term and local decisions, such as technology and infrastructure deployment, to global and long-term negotiations and targets. Computational limits require the designers of these models to trade off between coverage and resolution. Some models, such as the Global Change Analysis Model (GCAM), represent all energy sources and uses but at a relatively coarse level of resolution. GCAM balances global supply and demand of all energy carriers by endogenously projecting prices for energy sources and costs of greenhouse gas mitigation while capturing interlinkages between the energy system, water, agriculture and land use, the economy, and the climate. This global model was used to frame the Long-Term Strategy released by the White House in 2021 and has been used to inform national and global economy-wide decarbonization discussions and strategy development for decades. Other models instead focus on a portion of the energy sector with greater detail and resolution. The Regional Energy Deployment System (ReEDS) electricity-sector model, for example, projects capacity expansion with an emphasis on integration of variable renewable energy into the grid of the future. The Transportation Energy and Mobility Pathway Options (TEMPO) transportation-sector model enables analysis of household choices in adoption, charging, and use of electric vehicles. The Scout buildings-sector model supports detailed consideration of the policies and markets that can accelerate the adoption of energy conservation measures in buildings. Such sector-specific models are instrumental in informing technology research, sectoral planning strategies, and sector-specific aspects of greenhouse gas (GHG) mitigation strategies in the United States. These global and sector-specific modeling approaches can complement each other. The global approach ensures consistent, endogenous energy pricing and resource allocation, which can substantially diverge from current conditions in transformative scenarios, while the sector-specific approach facilitates representation of granular details across spatial, temporal, technological, and market dimensions that enable exploration of particular interactions and trade-offs. This report presents the results of recent work to explore the differences and tradeoffs between these approaches by comparing GCAM with the sector-specific ReEDS, TEMPO, and Scout models. The report compares both model structures and results, and discusses their potential relevance and applications.

29 ENERGY PLANNING, POLICY, AND ECONOMY

The Transactive Energy Network Template Metamodel

While transactive energy, which is defined as an allocation of electricity based on dynamically discovered values or prices, has been extensively studied, its uptake and use has been slow. This report describes a tool, the transactive network template, which should hasten the creation and uptake of transactive energy networks. Some basic principles of transactive energy are familiar from existing wholesale electricity markets. Locational prices are calculated today for zones within bulk electric transmission systems. Locational prices differ while accounting for the locational costs of electricity generation and the losses and constraints incurred when electricity is transmitted from generators and distributed to consumers. A transactive energy network might include these transmission zones. However, current research strives to apply transactive energy also in electricity distribution circuits, buildings, and even for individual generating and consuming devices. At the same time, researchers explore how to apply transactive energy in real time during increasingly shorter time intervals. Automated computational agents become necessary as transactive energy becomes applied to smaller circuit zones and at faster dynamic timescales. A transactive energy network is an example of a multi-agent system. Each zone in the network is represented by its transactive agent, which makes decisions for and acts on behalf of a business entity that is responsible for and manages one of the circuit regions. A transactive energy network is also an example of a decentralized, distributed control system. Control decisions and responsibilities are distributed among the network’s transactive agents. The transactive agents are independent; that is, there typically is no centralized authority or oversight function. Instead, transactive agents exchange transactive signals and thereby negotiate the prices and quantities of electricity that they will exchange. Initially, the circuit regions and responsibilities of transactive agents appear to be very dissimilar. Each circuit region may comprise transmission, distribution, or building-level circuits. Each has a unique position and electrical connectivity within the transactive energy network. Each possesses unique assets that either generate or consume electricity, and these (e.g., renewable energy generator, diesel generator, aggregate utility load, building load, space conditioning, refrigerator, etc.) may further differ in their price flexibility and in their strategies for responding to dynamic electricity prices. Given such diversity, an implementer’s first inclination might be to start from scratch to define all these devices and to engineer their seemingly unique interactions. Given that each implementer’s perspective may be narrow within a transactive energy network, it is unlikely that uniquely engineered systems would interact well. This is where the transactive network template is applicable. The transactive network template is a metamodel that has been developed to guide implementers as they configure their own transactive agent within a network of such agents. The object-oriented design of the transactive network template provides basic code object types that may be used and extended by implementers to represent each of the assets in their circuit region. These objects further facilitate the transactive agent’s necessary computations, which are divided among responsibilities to schedule power usage, balance electric supply and demand, and coordinate the exchange of electricity with the other transactive agents. This report addresses the conceptual transactive network template design. Implementers are directed to more formal design documents and reference implementations. A Python™-based1 reference implementation of the transactive network template has been coded, and three implementations have been configured to represent a national laboratory and two university campuses. Version 2 of the transactive node template generalizes the market class and its methods to facilitate multiple, and more diverse market coordination mechanisms than were facilitated by and demonstrated using Version 1. Version 3 includes new Appendix B, which addresses the designs of methods that would make dynamic prices track approved electricity rates. In the future, the author wishes to make the transactive network template more generally applicable to networks that require more accurate power flow. Development of the transactive network template is jointly funded by the U.S. Department of Energy (DOE) Energy Efficiency and Renewable Energy and the DOE Office of Electricity. In late 2015, one of the first projects to be funded by the DOE Grid Laboratory Modernization Laboratory Consortium was the Clean Energy and Transactive Campus project, led by Pacific Northwest National Laboratory. DOE funds were matched by an investment by the Washington Department of Commerce through its Clean Energy Fund. The transactive network template was developed to guide the implementation of transactive energy networks within this project’s scope.

24 POWER TRANSMISSION AND DISTRIBUTION