Over the last six years, natural hazards have caused catastrophic consequences across the globe. Tsunamis, hurricanes, flooding, earthquakes, and volcanic eruptions have led to hundreds of thousands of fatalities and billions of dollars in economic costs. Geomagnetic storms—a type of space weather—are much less frequent, but have the potential to cause damage across the globe with a single event. In the past, geomagnetic storms have disrupted space-based assets as well as terrestrial assets such as electric power transmission networks. Extra-high-voltage (EHV) transformers and transmission lines—built to increase the reliability of electric power systems in cases of terrestrial hazards—are particularly vulnerable to geomagnetically induced currents (GICs) caused by the disturbance of Earth‘s geomagnetic field. The simultaneous loss of these assets could cause a voltage collapse and lead to cascading power outages. As a natural event whose effects are exacerbated by economic and technological developments, geomagnetic storms pose a systemic risk that requires both domestic and international policy-driven actions.
As part of the OECD Future Global Shocks project, this case study on geomagnetic storms was undertaken to identify the strengths, weaknesses, and gaps in current international risk management practices. The literature on geomagnetic storm risk assessments indicates that the state of the art for assessing the security risk from this type of event is still inchoate. There are examples of analyses that describe threat, vulnerability, and consequence, but they are not integrated, primarily because of the weakness in the threat analysis. The lack of valid risk assessments has limited risk mitigation efforts in many critical infrastructure sectors, as it is difficult to demonstrate the utility of investing in either hardening or operational mitigation efforts, especially if these investments reduce time and money spent in preparing for more common risks.
To explore the risk to the international community, this report presents a platform to discuss the risk of geomagnetic storms by describing a worst reasonable scenario and its risk factors. Our analysis identifies areas with EHV assets that are in vulnerable locations due to latitude and ground conductivity, and examines the first- and second-order consequences of an extreme storm, highlighting those consequences with an international impact such as scarcity of surplus EHV transformers and satellite communication signal degradation. In addition to exploring the expected economic consequences of a geomagnetic storm event, the report also assessed psychological consequence in the form of social unrest, behavioral changes and social vulnerability. The potential for international consequences if an extreme event occurs are high, although the severity of those consequences can be mitigated if the international community takes certain actions in advance, such as investing in additional geomagnetic storm warning systems.
Geomagnetic storms can be categorized as a global shock for several reasons: the effects of an extreme storm will be felt on multiple continents; the resulting damage to electric power transmission will require international cooperation to address; and the economic costs of a lengthy power outage will affect economies around the world. As a global shock event, a severe geomagnetic storm, although unlikely, could lead to major consequences for OECD governments.

Not very likely, IMHO, but potentialy very serious if it does happen.

In a 2002 assessment of the electric power transmission system of the mainland United Kingdom, the consequences for multiple scenarios that varied by storm severity and location of the electrojet (flows of electric current in the Earth‘s ionosphere) were expressed as estimates for reactive power losses (Erinmez et al., 2002). Such an analysis provides information on the reactive reserve power requirements for a power system, but does not forecast whether the system can or cannot sustain such an event and maintain service. The third approach is to make that determination of continuity of service. Kappenman (2007) illustrated the potential effects of a geomagnetic storm of the estimated severity of a May 1921 storm. In that simulation, a geomagnetic storm was estimated to have introduced 4,800 nT/min at 50 degrees geomagnetic latitude, creating exceedingly large demand for reactive power to maintain voltage in the transmission system (over 100,000 megavolt-ampere reactive [MVAR]). This, in turn, could lead to ―probable large-scale voltage collapse‖ and ―major power grid blackout.‖ (Kappenman, 2007). North American Electricity Reliability Corporation (NERC) (2010) drew from the 2007 Kappenman analysis and stated that a severe storm ―could entail the potential for widespread damage to EHV transformers,‖ which could lead to ―prolonged restoration and long-term chronic shortages of electricity supply capability.‖

Back in 1859 the invention of the telegraph was only 15 years old and society's electrical framework was truly in its infancy. A 1994 solar storm caused major malfunctions to two communications satellites, disrupting newspaper, network television and nationwide radio service throughout Canada. Other storms have affected systems ranging from cell phone service and TV signals to GPS systems and electrical power grids. In March 1989, a solar storm much less intense than the perfect space storm of 1859 caused the Hydro-Quebec (Canada) power grid to go down for over nine hours, and the resulting damages and loss in revenue were estimated to be in the hundreds of millions of dollars.

"The question I get asked most often is, 'Could a perfect space storm happen again, and when?'" added Tsurutani. "I tell people it could, and it could very well be even more intense than what transpired in 1859. As for when, we simply do not know," he said.