Threats to the electric grid are coming from everywhere: saboteurs, weather and, as silly as it sounds, from outer space. The danger is significant and growing, and business risk managers are taking it seriously.
The latest warning comes from Paul Singer’s Elliott Management Corp., a $24.8 billion hedge-fund firm based in New York. Singer warned investors, in a letter obtained by News, of what he sees as the gravest threat: an electromagnetic pulse from the Sun that knocks out the grid for months or longer.
While Elliott’s letters to investors “are typically chock full of scary or depressing scenarios,” writes Singer, “there is one risk that is head-and-shoulders above all the rest in terms of the scope of potential damage adjusted for the likelihood of occurrence.”
While it sounds like the stuff of Hollywood, the threat from the Sun is quite real. Just last week, NASA reported on a 2012 sunburst, known as a coronal mass ejection, with the potential to “knock modern civilization back to the 18th century.”
The miss was about as near as they come: If the pulse had traveled through the same region of space a week earlier, Earth would have been pummeled. Ground currents would have melted the copper in transformers, and the interconnections of the sprawling power lines would have spread the damage far and wide. “We would still be picking up the pieces” two years later, Daniel Baker of the University