The 2024 hurricane season is shaping up to be an exceptionally active one. National Oceanic and Atmospheric Administration (NOAA) forecast predicts a potentially record-breaking number of named storms and hurricanes.
NOAA projects a staggering 85% chance of an above-normal season, with 17 to 25 named storms, 8 to 13 hurricanes, and 4 to 7 major hurricanes expected. The anticipated development of La Nina conditions—coupled with record-warm sea surface temperatures in the Atlantic basin—are key factors for the heightened activity. Transitioning from El Nino to La Nina reduces vertical wind shear, creating an environment more conducive to hurricane formation and intensification. The warm ocean temperatures provide ample fuel for potential storms.
Portions of the Gulf Coast had little time to recover from Hurricane Helene—which slammed into Florida’s Gulf Coast on September 26 before causing deadly flooding throughout Georgia and the Carolinas— before category 5 Hurricane Milton struck on October 9.
Hurricanes can significantly disrupt energy markets, affecting everything from natural gas production and transportation to electricity generation and distribution. The ripple effects of these disruptions can lead to price volatility, supply constraints, and unexpected changes in energy demand patterns.
It’s rare that a hurricane the magnitude of late September’s Helene hits New England. The last time a hurricane made landfall in a New England state was in August 1991, when Category 2 Hurricane Bob hit Rhode Island and most of southeast Massachusetts, knocking out power and destroying homes in its path.
Since 1900, 39 tropical systems have impacted New England, with 25 classified as hurricanes. Besides Bob, some of the most notable hurricanes to hit the region include:
The relationship between hurricanes and natural gas prices has evolved significantly over the past two decades. While hurricanes once posed a substantial threat to natural gas supply and typically drove prices higher, they now present a more complex and often bearish influence on the market.
This shift is primarily due to changes in production patterns and infrastructure development across the United States.
The Gulf of Mexico has historically been a critical area for natural gas production. A shift toward onshore production in recent years has lessened the impact. However, that doesn’t mean the risk was lowered to zero.
While less vulnerable than offshore platforms, onshore natural gas production facilities in coastal areas can face disruptions from flooding, power outages, and evacuations.
Another cause for concern is the potential damage to pipelines and other transportation infrastructure during hurricanes, which can disrupt the flow of natural gas from production areas to consumers.
The intricate network of natural gas storage facilities and transportation infrastructure plays a critical role in maintaining a stable energy supply. This system is particularly vulnerable to the disruptive forces of hurricanes, especially those originating along the Gulf Coast. The impact of these storms on natural gas storage and transportation can have far-reaching consequences for energy markets, potentially affecting supply chains, pricing, and energy security across the U.S.
Hurricanes pose multifaceted threats to the natural gas infrastructure, ranging from direct physical damage to operational disruptions. The concentration of critical facilities along the hurricane-prone Gulf Coast amplifies these risks.
Some of the other ways hurricanes can affect natural gas storage and transportation include:
The electric power sector is one of the most vulnerable infrastructures to hurricane impacts. Consequences extend beyond the immediate physical damage to power lines and generating stations. Hurricanes can affect generation, distribution, transmission, and pricing.
The complex interplay between physical damage, demand fluctuations, and market dynamics leads to significant disruptions in power supply and volatile price movements that can persist long after the storm has passed, influencing regional and national energy markets.
Coastal and low-lying power plants like those in the Carolinas are particularly vulnerable to flooding and storm surges. Wind damage can affect cooling towers, fuel storage facilities, and other essential components.
Peak loads in affected grids have dropped by an average of 18% during past severe hurricane events.
Hurricanes also can affect the generation mix in impacted areas. Wind turbines may need to be shut down during high winds, reducing renewable energy generation. Solar panels can be damaged by flying debris or flooding. Thermal power plants—gas, coal, nuclear—may need to shut down if cooling water supplies are compromised or there are other safety concerns.
Damage to power lines and substations can disrupt electricity delivery, even if generation facilities remain operational.
Hurricanes can dramatically alter electricity demand patterns. Widespread evacuations and business closures in affected areas can decrease electricity consumption during and immediately after the storm. As recovery efforts begin, there may be a spike in electricity demand for cleanup, repairs, and temporary housing.
Prolonged outages or infrastructure damage can lead to extended periods of reduced demand in severely affected areas.
These demand fluctuations create challenges for utilities in managing load balancing and power distribution, potentially leading to further instability in the grid.
Hurricanes can impact electricity prices in complex and counterintuitive ways. Short-term price spikes are most common before an anticipated supply disruption and the need for emergency preparedness. Price drops happen during storms due to widespread outages. Regional disparities can occur in areas less affected by the storm, which may see price increases to compensate for lost generation in heavily impacted regions.
In the long term, the cost of repairs, infrastructure hardening, and implementing resilience measures may be passed on to consumers, leading to sustained higher prices in affected areas.
Price effects can ripple out beyond the immediate impact zone due to the interconnected nature of the U.S. electric grid.
Moving forward, innovative solutions such as microgrid technology, advanced forecasting tools, and climate-resilient infrastructure will play a vital role in mitigating these risks.
Modern wind turbines are engineering marvels designed to withstand extreme weather conditions, including hurricane-force winds. These structures are built with sophisticated control systems that allow them to adjust their blade pitch and orientation to minimize wind resistance during severe storms.
Many turbines can endure wind speeds of up to 156 mph, the equivalent of a Category 4 hurricane. This resilience is a testament to the advancements in wind turbine technology and design.
However, despite their robustness, wind farms may still face temporary shutdowns during extreme weather. These precautionary measures are taken to protect the equipment and keep personnel safe. While such shutdowns can temporarily reduce energy production, they are typically short-lived. Operations resume quickly once the storm passes.
Hurricanes pose significant challenges to solar energy infrastructure. They can impact the physical integrity of solar installations and their ability to generate and distribute power. As the frequency and intensity of hurricanes increase due to climate change, understanding these effects becomes crucial for the solar industry, energy planners, and policymakers.
Physical damage to solar panels is a top concern during these extreme weather events. While most high-quality solar panels are engineered to withstand wind speeds up to 140 mph, the most powerful hurricanes can exceed this threshold, causing potential damage or dislodgement.
Other issues can include:
While hurricanes pose significant challenges, the energy industry has improved its resilience. Many facilities have enhanced protection measures, and grid operators have developed more robust emergency response plans.
Working with energy procurement specialists to secure the most favorable energy pricing terms is another way businesses can protect against volatile pricing during severe weather events. Businesses should also consider supply reliability, contract flexibility, and long-term planning when making long-term energy procurement decisions as the frequency and intensity of hurricanes increase.