Between the Poles

New research on the cost of hitting underground utilities

Important new research on the reliability of the generally available technology for detecting and gelocating underground utility infrastructure and the costs of hitting utilities during excavation (known as strikes in the UK) was presented at the Year in Infrastructure 2016 conference in London.   Dr. Nicole Metje, Professor of Geotechnical Engineering at the University of Birmingham,  presented some of her most recent research on a major problem affecting the construction industry worldwide.

Background: utility strikes in the UK

About 4 million excavations are carried out on the UK road network each year to install or repair buried utility pipes and cables. Not knowing the location of buried assets causes practical problems that increase costs and delay projects, but more importantly, it increases the risk of injury for utility owners, contractors and road users. The problems associated with inaccurate location of buried pipes and cables are serious and are rapidly worsening due to the increasing density of underground infrastructure in major urban areas.  In the U.S. it is estimated that an underground utility is hit about every minute and underground utility conflicts and relocations are the number one cause for project delays during road construction.

The standard tools in the U.K. for detecting underground utilities are the cable avoidance tool known as CAT. The CAT can detect signals naturally radiating from metallic services or in conjunction with a Genny that applies a distinctive signal that the CAT can detect.  The adoption of ground penetrating radar is increasing, but compared to CAT it remains relatively expensive and requires trained operators.

Underground asset detection is the last frontier of remote sensing.  In the U.K. it has been perceived as a serious problem since at least a decade ago.  The Mapping the Underworld (MTU) project was initiated in 2004 to develop a multi-sensor platform to locate and map in 3-D the location of all buried utility assets - without excavation.  The 10-year research program, which was largely funded by the Engineering and Physical Sciences Research Council (EPSRC), involves the University of Birmingham, University of Bath, British Geological Society, Engineering and Physical Sciences Research Council (EPSRC), Univeristy of Leeds, Newcastle University, University of Sheffield, University of Southampton, and UKWIR. The project concluded that a combination of multiple technologies is essential for the reliable detection of the buried assets.   The project aimed to develop a remote sensing platform that combined several detection technologies together with software that optimizes the combined data.  To achieve a 100% location success rate without disturbing the ground is the 'holy grail' of underground remote sensing.   The benefits of knowing where underground infrastructure are well documented.

Since then, a second major multi-disciplinary, multi-university research project, Assessing the Underworld (ATU) has been funded,  largely by the EPSRC. The project aims to create prototype multi-sensor devices that will enable the condition of underground assets to be assessed remotely without excavation.  The technologies include above ground remote sensing and robotic devices that can be deployed in a water distribution or sewer pipeline.

In 2012 the U.K. the civil engineering contractor's association CECA conducted a survey of its members on the topic of underground strikes.  It asked questions about the technologies used and whether the respondent has internal processes for tracking and estimating the costs associated with utility strikes.  I have paraphrased the questions.

Does your organization quantify the direct costs of utility strikes on a regular basis ?	Yes 57%	No 43%
Do you track and quantify other costs (indirect and/or social) incurred during service strikes ?	Yes 29%	No 71%
Do you have a separate programam or project for determing and recording the location of underground utilities  program  ?	Yes 14%	No 86%
Does your field staff use a Genny as much as it should be ?	Yes 14%	No 86%
Do you think underground utilities would still be damaged during excavation if your staff used a Genny as often as it could be ?	Yes 0%	No 100%

 

 

 

 

 

 

 

 

 

 

This suggests that even the limited (see below) tools available today for underground detection are not used to their fullest extent.  The direct costs of utility strikes are still not quantified and tracked in many firms, and very few firms are aware of the indirect costs associated with utility strikes.  Probably as a result of not knowing the costs, very few firms have an explicit program for geolocating underground utilities.

Risk of underground utility strikes

Dr. Metje presented new results based on her research on utility strikes in the U.K.  She pointed put that unlike the U.S. where collecting statistics on underground hits is relatively easy, in the U.K. it is a challenge.  In spite of the obstacles, she managed to collect data on 3348 strikes defined as incidents during excavation which involved damage to underground utilities.  Some of the very interesting results of the analysis include

• Of 255 strikes where pre-excavation CAT scans had been carried out, in 52% of the cases the utility had been detected before the strike.
• Of 187 strikes where utility plans/drawings (as-builts) had been reviewed before excavation, in 48% of the cases the utilities hit were shown on the plans. 
• Of 89 strikes where the plans/drawings (as-builts) showed the utility,  in 84% of the cases respondents reported that the location of the utility was inaccurately plotted.   16% said it was accurate.

In other words even when it is known that there is utility infrastructure underground, there is still a very significant risk of hitting it - perhaps because its location is not known accurately enough.  It also provides further evidence that, in general, as-builts cannot be relied on, either because they are "as-designed" or because they have not been maintained and do not record modifications that may have been made since the infrastructure was first built.

Cost of hitting underground utilities

Dr. Metje presented important results on the direct costs of utility strikes in the U.K.

Electricity	£ 970
Gas	£485
Telecom	£400
Fibre-optic	£2800
Water	£300-980

 

 

 

 

 

However, Dr. Metje has found that the true costs associated with utility strikes is much higher than this. Direct costs include the costs of sending a crew to assess and repair the damaged pipe or cable.  Indirect costs include the impact of traffic disruption as  a result of the strike, any injuries and other impacts on the health of the workers directly involved or people in the immediate neighbourhood, and the lost custom that businesses would have experienced as a result of the traffic disruption.  Dr Metje's research suggests that the true cost much larger than the direct cost.  Her estimate is that the true cost is about 30 times the direct cost.  This is a startling result which indicates that the cost to society of underground utility strikes is much, much larger than is generally believed. 

Reliability of underground utility detection

In the U.S. the ASCE 38-02 - Standard Guideline for the Collection and Depiction of Existing Subsurface Utility Data is widely used for classifying location information about underground infrastructure according to its estimated reliability.  I've blogged about a major national project in France aimed at classifying information about all of France's underground utility infrastructure according to a standard that specifies absolute accuracy (< 40 cm, 40 cm - 1.5 m, >1.5 m).

In the U.K. Publicly Available Specification (PAS) 128 governs the recording of the location of underground utilities.  PAS 128 was developed under the auspices of the British Standards Institution (BSI) and sponsored by the Institution of Civil Engineers (ICE).  PAS 128 is aimed at the practitioner - surveyors who make their living detecting and reporting the location of underground utilties for construction contractors and utilities.  The primary objective is to reduce risk for construction contractors.  In the UK, unlike the U.S. and Canada where we have one-call centres, in the U.K. if a utility is disrupted by a construction project, the liability lies entirely with the contractor. 

PAS128 has aspects of both the U.S. and French system.  It is similar to the US ASCE standard in that codes (A) through (D) relates to how the location was captured.  The British standard is different in that it adds sub-categories B1 through B4 which specify the absolute precision of the remote-sensed location.

    QL D - Location of underground structures determined by a review of existing utility (paper) records
    QL C - A physical reconnaissance of the site has been performed identifying features of the network are visible above ground
    QL B - Remote detection technology such as electromagnetic or ground penetrating radar have been used to detect the location of the underground facilities. There is a sub-classfication B1-B4 that specifies  the estimated precision of the measurements.  For example, B3 corresponds to +/- 0.5 meters.
    QL A - Verification, typically by potholing

Dr. Metje reported revealing research aimed at assessing the PAS128 standard and also validating the reliability of the MTU (Mapping The Underworld) sensor technologies on a site where underground truth could be determined.   Five commercial companies were invited to conduct a utility survey of the chosen area to PAS128 standard.  The firms were asked to survey the underground utilities in the same area and report location in the form of a map.  This was compared with the results of a survey conducted with the MTU platform.  The firms agreed on the location of wastewater and storm sewers and water utilities (pipes).  But in the case of the location of telecom and electric cables there was substantial disagreement - the total length of telecom and electricity cables detected by different firms varied widely, from 90 to 240 meters.  This is a startling indication of the risk associated with existing underground utility detection technologies.

A new standard relating to underground utility detection is expected to be released in early 2017.  PAS 256 (Buried services – Collection, recording and sharing of location information data – Code of Practice) governs data sharing. 

Source:

WHAT DO UTILITY STRIKES REALLY COST?
Authors: Dr. Lewis Makana, Dr. Nicole Metje, Prof. Ian Jefferson, and Prof. Chris Rogers, University of Birmingham, 2016.

Dramatic drop in levelized cost of renewable electric power generation technologies

The "levelized cost", which is the present value of the total cost of building and operating a generating plant over its financial life, aims at making the costs of different generation technologies comparable.  The US Energy Information Administration (EIA) has developed a standard way of estimating levelized costs.  The most recent estimates of the average values of levelized costs for generating technologies are for generating facilities brought online in 2020 as represented in the National Energy Modeling System (NEMS) for the Annual Energy Outlook 2015 (AEO2015) Reference case.

The levelized cost represents the per-kWh cost (in real dollars) of building and operating a generating plant over an assumed financial life and duty cycle. Key inputs to calculating levelized costs include overnight capital costs, fuel costs, fixed and variable operations and maintenance (O&M) costs, financing costs, transmission costs, and an assumed utilization rate (capacity factor) for each plant type.  Plants typically built for peaking have a much lower capacity factor or utilization rate than a baseload plant.  Renewable energy generation also typically has a a lower capacity factor because wind and sun are intermittent.  

The LCOE values shown for each utility-scale generation technology are calculated based on a 30-year cost recovery period, using a real after tax weighted average cost of capital of 6.1%.  In the AEO2015 reference case, 3 percentage points are added to the cost of capital when evaluating investments in greenhouse gas (GHG) intensive technologies like coal-fired power and coal-to-liquids (CTL) plants without carbon control and sequestration (CCS). In LCOE terms, the impact of the cost of capital adder is similar to that of an emissions fee of $15 per metric ton of carbon dioxide (CO2) when investing in a new coal plant without CCS, which is representative of the costs used by utilities and regulators in their resource planning. As a result, the LCOE values for coal-fired plants without CCS are higher than would otherwise be expected.        

U.S. average levelized cost of electricity (LCOE) for plants entering service in 2020

(2013 $/MWh)

Dispatchable	Total system LCOE
Conventional coal	95.1
Natural Gas - Combined cycle	75.2
Natural Gas - Combustion turbine	141.5
Advanced nuclear	95.2
Geothermal	47.8
Biomass	100.5

 

Nondispatchable	Total system LCOE
Wind	73.6
Offshore wind	196.9
Solar PV	125.3
Solar thermal	239.7
Hydroelectric	83.5

Comparing the levelized costs for dfferent generation technologies shows that natural gas-fired combined cycle and wind are the cheapest way to generate power in many parts of the country (without access to geothermal energy), recognizing that the levelized cost of coal includes the potential future cost of carbon emissions. 

There is considerable variation in different regions of the U.S. especially in the case of renewable energy sources.  The EIA has calculated levelized costs for 22 regions across the U.S.

Nondispatchable	Min	Ave	Max
Wind	65.6	73.6	81.6
Offshore wind	169.5	196.9	269.8
Solar PV	97.8	125.3	193.3
Solar thermal	174.4	239.7	382.5
Hydroelectric	69.3	83.5	107.2

The interesting conclusions are that wind has achieved parity with natural gas in many parts of the country and solar PV has achieved grid parity in some parts of the country(within the assumptions of levelized costs).  This represents a significant drop in the cost of non-hydro renewable energy over the past 5 years. 

Technology	2016	2018	2020
Conventional coal	100.4	100.1	95.1
Natural gas - Combined cycle	83.1	67.1	75.2
Wind	149.3	86.6	73.6
Solar PV	396.1	144.3	125.3
Hydroelectric	119.9	90.3	83.5

When I blogged about levelized costs at the beginning of 2011, the cost of solar PV per MWh was significantly more expensive than any other generation technology.  Even in 2013 solar PV was still almost 50% more expensive than conventional coal.  But now in some parts of the U.S. it is as cheap as conventional coal, though not as cheap as natural gas combined cycle. 

ASCE forecasts $177 billion shortfall in electric grid investment in next decade

The American Society of Civil Engineers (ASCE) has released Failure to Act: Closing the Investment Gap for America’s Economic Future, which is a 2016 update to 2013 report Failure to Act: The Impact of Infrastructure Investment on America’s Economic Future. The report estimates that there is a $1.4 trillion investment gap in infrastructure in the next decade 2016 to 2025.

Roads, bridges, transit and commuter rail	$1.1 trillion
Electricity	$177 billion
Water and wastewater	$105 billion
Airports	$42 billion
Ports and inland waterways	$15 billion

Most of this gap is in roads, bridges, transit and commuter rail  infrastructure, estimated at $1.1 trillion. Most of the remaining gap lies in electricity ($177 billion) and water and wastewater ($105 billion) infrastructure.

Electric power

Total requirements	$934 billion
Funded	$757 billion
Gap	$177 billion

The average annual investment gap for electric generation, transmission and distribution through 2025 is expected to decrease from $21 billion to $18 billion with a cumulative investment gap of $177 billion through 2025.  This does not include the potential impact of the 2015 Clean Power Plan because court action has deferred the earliest possible implementation to 2017.

The U.S. electric power grid includes 5,800 major power plants and 450,000 miles of transmission lines plus many smaller generation facilities and local distribution lines.  The estimated gap is 22% due to generation, 24% for transmission and 54% for distribution infrastructure.

Generation

Compared to the gap estimate made for the initial Failure to Act series, the cumulative shortfall in funding for generating facilities is expected to be much smaller. This is due to improvements in the availability of generating capacity in the short-term and decreases in the rate of demand growth predicted by the North American Electric Reliability Corporation.

Transmission and distribution

Transmission and distribution are expected to have slightly larger cumulative gaps than the original reports predicted. This is the result of an increasingly decentralized generation network, which requires additional transmission capacity for load balancing and resiliency.

Distribution investments are required to maintain the existing power networks.  Investment is also required to make the grid smarter to increase efficiency, optimize power flows and address growing customer requirements including increasing power being generated by customers.

If the gap is not resolved, the impact is expected to be a loss of reliability in electricity supply. This leads to direct costs to households and businesses. Without significant investments, failure of aging equipment could lead to longer lasting, more widespread losses of power.

Economic impact

Unreliable electricity service carries significant costs associated with power outages. The average outage cost per short-duration power interruption is estimated to be $2,600 to $6,600 for industrial firms and $900 to $1,700 for commercial firms.  As costs to households and businesses associated with service interruptions rise, it is estimated that GDP will fall by a total of $819 billion by 2025 and that the U.S. economy will provide an average of 102,000 fewer jobs than it would otherwise have by 2025.

Geospatial contributes $21 billion to the Canadian GDP

Prashant Shukle, Director General of Canada Centre for Mapping and Earth Observation (CCMEO) at Natural Resources Canada, invited the Canadian geospatial community to a pre-release discussion of the just released Canadian Geomatics Environmental Scan and Economic Value Study of the contribution of the geospatial sector to the Canadian economy.  The Canadian study was conducted by Hickling Arthurs Low Corporation with partners ACIL Allen Consulting, Fujitsu Canada and ConsultingWhere.  According to Prashant

"For the first time, we have quantified not only the contributions of Canada’s geomatics sector to the economy in terms of GDP and employment, but we have captured the significant economic and non-economic benefits to Canada’s economy, society and environment that the adoption and use of geospatial information (GI) makes possible.

The productivity benefits that accompany the use of GI in a variety of applications are of particular significance, not only for innovation within Canada’s vertical industries, but for federal or provincial governments – who tend to have silos of geomatics expertise and have been slower to fully use and integrate GI into operations, planning and policy-making."

The study found that in 2013 the traditionally defined Canadian geospatial industry (2,450 private sector geomatics firms) generated revenue of $2.3 billion. This includes revenue generated by surveying, geodesy and positioning, mapping, remote sensing, geospatial data management, geospatial consulting, and mass market geospatial.

The total contribution of geospatial to the Canadian GDP through productivity improvement was estimated at $20.7 billion or 1.1% of the Canadian GDP in 2013.  The sectors most impacted by productivity improvements resulting from the application of geospatial data and technology are

• mining, quarrying, oil and gas extraction (4.54%)
• transportation and warehousing (1.64%)
• utilities (1.58%)
• public administration (1.51%)
• construction (1.23%)
• agriculture, forestry, fishing and hunting (1.22%)
• management of companies and enterprises (1.08%).

The study also estimated the impact of open geospatial data to the Canadian economy.  It found that open data contributed $ 695 million in productivity improvement to the GDP in 2013.   McKinsey Global Institute estimated that the value of all types of open data to the global economy was $3 trillion.

Several countries have done similar studies in the past. 

Australia

In 2008 a report prepared for the CRCSI & ANZLIC by ACIL Tasman estimated that the spatial information sector contributed between $6.4 billion and $12.6 billion to the Australian gross domestic product (GDP) or  between 0.6% and 1.2% of the Australian GDP in in 2006-2007.  Secondly, it was estimated that restrictions on access to spatial data reduced productivity in some economic  sectors by between 5% and 15%. With open access to spatial data the Australian GDP could have been about 7% higher in 2006-2007.  Thirdly, it was estimated that with the right policies the contribution of the geospatial sector to the national economy in the medium term had the potential to be up to 50% higher than in 2006-2007.

New Zealand

In 2009 a study  sponsored by Land Information New Zealand (LINZ), the Department of Conservation (DOC) and the Ministry for Economic Development (MED) estimated that spatial information added at least $1.2 billion, or about 0.6% of GDP, to the New Zealand economy through productivity gains. ACIL Tasman conducted both the Australian and the New Zealand studies. 

Ireland

A study commissioned by Ordnance Survey Ireland (OSi) and carried out by Indecon International Economic Consultants estimates that the geospatial information industry directly contributed €69.3-million (Gross Added Value) to the Irish economy in 2012.  The estimated economic value of annual time savings through the use of geospatial information is € 279 million or about 0.6 % of the Irish GDP. 

United States

According to a report by the Boston Consulting Group (BCG) published in June 2012 the geospatial services industry in the United States generates annual revenues of $75 billion.  The BCG report estimates the economic impact of the geospatial services industry on government, business, and consumers is estimated to be $1.6 trillion in revenues (greater efficacy) and $1.4 trillion (about 8.7% of the U.S. GDP) in cost savings (greater efficiency).

World

In 2013 Google released a report What is the economic impact of Geo services ? prepared by Oxera Consulting Ltd. Global revenues from geospatial products and services as defined by Oxera was estimated to be $150-$270 billion per year.  The $270 billion estimate was computed by scaling up the BCG estimate for the United States to the world economy.  Sanjay Kumar quotes an estimate by JP Morgan that the professional geospatial market is worth $100 billion.

The Canadian value study (in which the descendant of ACIL Tasman participated) found that the impact of geospatial technology on the Canadian economy is already significant and that there are opportunities for increasing the contribution of geospatial to the economy.  Although revenue from the traditionally defined geospatial industry is projected to be flat,  the study concluded that there is major growth potential in integrated geospatial - integrating location services into vertical industries. 

Prashant emphasized that to enable the geospatial sector to grow, the geospatial community needs to act collaboratively.  A new organization GeoAlliance Canada is being established to encourage this to happen.  It was launched April 20 in Ottawa.  You can express interest in participating in GeoAlliance Canada here.

Climate change projected to reduce South Asian GDP by 1.8% by 2050

The South Asia developing members (Bangladesh, Bhutan, India, the Maldives, Nepal, and Sri Lanka) of the Asian Development Bank (ADB) have a population of 1.43 billion people.   One-third of the inhabitants of the region live in poverty. 

In a recent report the ADB has estimated the impact of climate change on important sectors of the economies (agriculture, energy, coastal and marine resources, forests and other ecosystems, health, and water) of these countries.   It projects that the total cost of climate change in South Asia will increase over time and that in the business-as-usual economic scenario, South Asia could lose an equivalent 1.8% of its annual gross domestic product (GDP) by 2050 due to climate change. The report forecasts that the Maldives will be hardest hit in GDP loss, but all South Asian economies could face serious decreases in annual GDP;

• Maldives 2.3%
• Bangladesh 2.0%,
• Bhutan 1.4%
• India 1.8%
• Nepal 2.2%
• Sri Lanka 1.2%

The ADB suggest that if measures are taken by the international community to reduce fossil fuel consumption so that the rise in global mean temperature is kept below or within 2 °C, the region would lose an average of 1.3% of GDP annually by 2050.

Geospatial contributed €69.3-million directly to the Irish economy in 2012

A report commissioned by Ordnance Survey Ireland (OSi) and carried out by Indecon International Economic Consultants estimates that the geospatial information industry directly contributed €69.3-million (Gross Added Value) to the Irish economy in 2012.   

According to the report, the industry generated sales valued at €117.5 million in 2012, and spent a total of € 84.4 million on salaries of 1,677 full-time equivalent persons who were directly employed by the industry.  The industry supports the employment of 3087 people.

The geospatial sector had an economy-wide impact of € 126.4 million.  Furthemore, the estimated economic value of annual time savings through the use of geospatial information is € 279 million.

The report also found the use of geospatial information saved the public sector €82 million per year in administrative costs in both local and national government.

IEA projects net $71 trilllion savings in fuels costs from decarbonizing world's energy over next 40 years

In its latest Energy Technology Perspectives 2014 (ETP 2014) the International Energy Agency (IEA) looked at the energy sector over the next 40 years.  ETP 2014 analyses three possible energy futures to 2050:

• 6°C Scenario (6DS) - where the IEA projects the world is now heading based on existing policies
• 4°C Scenario (4DS) - this scenario reflects the stated intentions by countries to cut emissions and boost energy efficiency
• 2°C Scenario (2DS) - this scenario is based on technological change tht results in a sustainable energy system with reduced greenhouse gas emissions.

In the 6°C scenario global energy demand is projected to grow by 70% over 2011 levels.  Concomitantly emissions are projected to grow by more than 60% over 2011 levels. 

Under the same projections for population and gross domestic product, the introduction of new technology and radical policy action in the 2°C scenario dramatically improves energy efficiency to limit increases in demand by 25% while emissions are cut by more than 50%.  The major sources of reduced energy demand and reduced carbon are (% of cumulative emissions reductions)

• End-use fuel and electricity efficiency 38%
• Renewables 30%
• CCS 14%
• End-use fuel switching 9%
• Power generation efficiency and fuel switching 2%

A major difference between the 2°C and 6°C scenarios is that in the 6°C scenario oil remains the most important primary energy source with demand increasing by 45%.  In contrast in the 2°C scenario new policies and technologies reduce oil demand by 30%.

In the ETP 2014 the IEA makes the case that there is a significant financial benefit in addition to environmental and social benefits from decarbonizing the energy system.  The IEA estimates that  US$ 44 trillion in additional investment in energy infrastructure is required to decarbonize the energy system inline with the 2°C scenario by 2050.   But the IEA forcasts that this expenditure is more than offset by over US$ 115 trillion in fuel savings.  The result is a net savings of US$ 71 trillion (assuming no discount).  With a 10% discount rate, the net savings are still more than US$ 5 trillion.

Australian Government sponsors report on the economic benefits of global positioning systems

The Australian Government has prepared reports on the economic benefits of global navigation satellite systems (GNSS) including specific sectors of the Australian economy.  The studies were conducted by ACIL Allen.  

To provide some context for this two countries, Australia and New Zealand, have commissioned studies to estimate the contribution of geospatial data and technology to the national economy.  In 2008 a report prepared for the CRCSI & ANZLIC by ACIL Tasman estimated that the spatial information sector contributed between $6.4 billion and $12.6 billion to the Australian gross domestic product (GDP).  That represents between 0.6% and 1.2% of the Australian GDP in in 2006-2007.  In 2009 a study  sponsored by Land Information New Zealand (LINZ), the Department of Conservation (DOC) and the Ministry for Economic Development (MED) estimated that spatial information added at least $1.2 billion, or about 0.6% of GDP, to the New Zealand economy through productivity gains.  Canada has announced the award of a similar project to a team that includes ACIL Tasman, who conducted the Australian and New Zealand studies.

Global Navigation Satellite Systems (GNSS) is the generic term for constellations of satellites that provide a signal that enables users to determine their position anywhere outdoors. The first GNSS system was the U.S. global positioining system or GPS.  Since then Russia, Europe and China have launched their own satellite systems GLONASS, Galileo and Beidou.

Augmented GNSS provide greater accuracy and reliability to end user by bringing in additional  external information.  These systems are composed of multiple ground stations, located at accurately-surveyed points. The ground stations take measurements of the signal from the GNSS satellites and estimate the errors which impact the signal received by the users.  This information is transmitted to end users by satellite or by terrestrial radio.

The report finds that  augmented GNSS services have delivered economic benefits to Australian industry through improvements in productivity and more efficient use of resources. It estimates that: in 2012 augmented GNSS added between $2.3 billion and A$3.7 billion to Australia’s real GDP through improved productivity. It also projected that in 2020 real GDP would be between $7.8 billion and $13.7 billion higher as a result of the ues of augmented GNSS.

The report found that the greatest economic impact from the use of augmented GNSS was found to be in the agricultural, mining, construction and surveying sectors. But the utilities and transport sectors also realised important economic benefits.

The greatest economic benefits in 2012 were derived from the use of augmented GNSS in surveying, machine guidance, automation of operations and asset mapping. The levels of accuracy required for these applications ranges between 2 cm and 10 cm.

Augmented GNSS and utilties

Augmented GNSS contributes significantly to the productivity and competitiveness of the utilities sector which in this study includes electricity, gas and water services. Utilities use augmented GNSS data with geographic information systems to construct, monitor and manage network assets, manage outages, maintain systems and forecast demand.  Augmented GNSS lowers development costs and invreases the efficient of asset management. Output from the utilities sector is estimated to have been between $50 million and $81 million higher as a result of the use of augmented GNSS in asset management and maintenance.

It is estimated that With increasing adoption of augmeneted GNSS in asset mapping and control systems, this could increase to between $173 million and $305 million by 2020. Further improvements in productivity are expected as the technology is adopted more widely across industry and as more innovative applications emerge.

Estimating the economic impact of climate change on national flood insurance

One of the industries where geospatial data and technology is having a major impact is insurance.

I blogged previously about a ground breaking risk assessment study of sea level rise in North Carolina.  The study modeled the financial impact on coast communities of the rise in sea level. resulting from global warming.  It makes it possible to estimate at the community level the financial losses associated with both long term sea level rise and episodic events such as storm surges.

More recently AECOM has been sponsored by the Federal Emergency Management Agency (FEMA) to analyze the potential long-term implications of climate change on the National Flood Insurance Program (NFIP) in the U.S.  The motivation for this study was a bill passed by Congress, the Flood Insurance Reform Act of 2012, which mandates a number of changes to the NFIP.  Key provisions of the legislation require the NFIP to raise rates to reflect true flood risk and to make the program more financially stable.

If a landowner's property is included in a Special Flood Hazard Area (SFHA) as defined by NFIP maps, it is mandatory for the landowner to have flood insurance.  The SFHA is the area what would be flooded by a "100-year flood", or in other words the flood having a one percent chance of being equaled or exceeded in any given year.  NFIP maps are available on-line and as paper and digital documents.

Projected impact of climate change

AECOM found that near rivers by the year 2100, the SFHA is projected on average to increase about 45% across the nation, with very wide regional variability.

In coastal environments AECOM projected changes based on two alternative assumptions.  In the fixed shoreline case, it is assumed that the shoreline does not change under the impact of rising sea level.  The alternative assumption is the receding shoreline assumption, that the shoreline recedes as sea level rises causing land to be lost to the sea. AECOM found that

• assuming a fixed shoreline the typical increase in SFHA is projected to be about 55% by the year 2100, also with very wide regional variability.
• with the receding shoreline assumption, negligible change in coastal SFHA is projected because the amount of new coastal SFHA resulting from rising sea levels will be equally offset by the land area lost to the sea.

AECOM estimated that the national average increase in SFHA by the year 2100 is 40% near rivers and coastal areas if shoreline recession is assumed; and 45% near rivers and coastal areas if fixed coastlines are assumed.

Impact with the receding coastline assumption

The estimated economic impact by 2100 is that the total number landowners required to have NFIP insurance policies will increase by approximately 80%.  This breaks down into a 100% increase in  landowners near rivers required to have NFIP policies and approximately a 60% increase in landowners in coastal environments.

AECOM also estimated that the average loss cost per policy will increase approximately 50% by the year 2100.

Impact with the fixed shoreline assumption

The estimated economic impact by 2100 is that the total number landowners required to have NFIP insurance policies is projected to increase by approximately 100%.  This breaks down into a 80% increase in  landowners near rivers required to have NFIP policies and approximately a 130% increase in landowners in coastal environments.

The estimated average loss cost per policy will increase by approximately 90% by the year 2100.

Technical background

The study relies on the findings and source materials of the U.S. Climate Change Science Program (CCSP) and the IPCC Fourth Assessment Report (IPCC AR4).

A probabilistic approach was used in which a range of climate changes was considered.  The key climate factors include both the frequency and the intensity of storms that influence flooding. Near rivers, intensity is determined by the amount of rainfall during storms.   In coastal areas, storm intensity is determined by wind velocity and pressures that produce storm surges.

The engineering analyses were based on IPCC AR4's three greenhouse gas emissions scenarios. These scenarios represent a balanced range between low and high climate change impact.

• The A1B scenario assumes balanced energy use between fossil fuel and non-fossil fuel energy sources, high economic growth and low population growth.
• The A2 scenario assumes a smaller amount of economic growth, but more rapid population change.
• The B1 scenario assumes low population growth and a more environmentally sustainable approach to economic growth.

River Flooding – changes in precipitation frequency and quantity as storms become more or less frequent, and more or less intense. River floods also depend upon the rate of runoff from a watershed.   Urbanization is an important factor because it increases the proportion of impervious surface area.

In coastal regions the important factors are gradual sea level rise (SLR) and the effects of storms.  Rising sea level increases the likelihood of greater long-term shoreline erosion and recession.  This is important because the projected effect is to move the coastal SFHA substantially inland by 2100. Depending upon the emissions scenario being considered, the global rise in sea level at 2100 is projected to average approximately 1.2 meters over the three emissions scenarios.

The engineering analysis was followed by a demographic analysis to determine the projected population, number of insurance policies, and related factors within flood hazard areas through 2100.

Comparing the cost of alternative electric power generation technologies

The "levelized cost", which is the present value of the total cost of building and operating a generating plant over its financial life, aims at making the costs of different generation technologies comparable.  The US Energy Information Administration (EIA) has developed a standard way of estimating levelized costs.  The most recent estimates of the comparative costs of different ways of generating electricity have been developed by the EIA for the Annual Energy Outlook 2013 (AEO2013) Early Release Reference case.

The levelized cost represents the per-kWh cost (in real dollars) of building and operating a generating plant over an assumed financial life and duty cycle. Key inputs to calculating levelized costs include overnight capital costs, fuel costs, fixed and variable operations and maintenance (O&M) costs, financing costs, transmission costs, and an assumed utilization rate (capacity factor) for each plant type.  Plants typically built for peaking have a much lower capacity factor or utilization rate than a baseload plant.  Renewable energy generation also typically has a a lower capacity factor because wind and sun are intermittent.

The levelized cost shown for each utility-scale generation technology is based on a 30-year cost recovery period starting in 2018, using a real after tax weighted average cost of capital (WACC) of 6.6 percent.

The levelized costs are the true economic cost and do not include state or federal incentives such as tax credits.  In the AEO2013 reference case a 3 % increase in the cost of capital is added when evaluating investments in greenhouse gas (GHG) intensive technologies like coal-fired power and coal-to-liquids (CTL) plants without carbon control and sequestration (CCS). The impact of the 3% increase is similar to that of an emissions fee of $15 per metric tonne of carbon dioxide (CO2) when investing in a new coal plant without CCS, similar to the costs used by utilities and regulators in their resource planning.  It represents an estimate of the carbon allowances these plants may have to purchase to offset their emissions.  The impact is that the levelized capital costs of coal-fired plants without CCS are higher than would otherwise be expected.

Costs vary regionally.  Levelized costs have been calculated for 22 regions across the U.S.  The graph shows minimum, average and maximum regional costs for the U.S.

Comparing the levelized costs for dfferent generation technologies and different regions shows that natural gas-fired combined cycle is the cheapest way to generate power in many parts of the country, recognizing that the levelized cost of coal includes the potential future cost of carbon emissions. 

The other interesting conclusion is that in some parts of the country solar PV has already achieved grid parity (within the assumptions of levelized costs).  This repesents a signfiicant drop in the cost of solar PV.  When I blogged about levelized costs was at the beginning of 2011.  At that time the cost of solar PV per MWh was significantly more than any other generation technology.