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Risk Management & Space Weather: Are You Ready?

With modern society's ubiquitous reliance on the electrical grid, a severe solar storm can wreak havoc on the electric power supply and trigger losses from business interruption and damaged physical assets.

By Nicole Homeier, Kyle Beatty, James Martin Griffin | Updated on September 01, 2011

With modern society’s ubiquitous reliance on the electrical grid, “space weather”—such as a severe solar storm—can wreak havoc on the electric-power supply and trigger losses from business interruption and damaged physical assets.

While power outages from space weather are low-frequency events, they have the potential to cause crippling long-term damage.

In fact, the risk of grid-power outages due to space weather fits the profile of a market-changing catastrophe such as Katrina, the 9/11 attack, or the Japanese earthquake and tsunami. Each was unprecedented and believed to be very unlikely—until it occurred.  

LOW-LIKELIHOOD— BUT EXTREMELY HIGH-SEVERITY 

The most-severe space-weather event in recorded history happened in 1859. Intense solar flares were accompanied by huge coronal-mass ejections (CMEs) that created the largest geomagnetic storms on record. Telegraph operators received electric shocks, and telegraph lines melted. Auroras were seen all over the globe. 

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