New Scientist has an article about a recent NASA-funded report into plasma ejections from the Sun that could potentially wipe out our power grids with fairly chilling consequences:

The incursion of the plasma into our atmosphere causes rapid changes in the configuration of Earth’s magnetic field which, in turn, induce currents in the long wires of the power grids. The grids were not built to handle this sort of direct current electricity. The greatest danger is at the step-up and step-down transformers used to convert power from its transport voltage to domestically useful voltage. The increased DC current creates strong magnetic fields that saturate a transformer’s magnetic core. The result is runaway current in the transformer’s copper wiring, which rapidly heats up and melts.

Given that pretty much everything we do relies on electricity (water, food and heat are fairly important not to mention the world’s financial markets, healthcare, communications, the Internet) the simultaneous destruction of transformers would leave us severaly impaired.

According to the NAS [National Academy of Sciences] report, the impact of what it terms a “severe geomagnetic storm scenario” could be as high as $2 trillion [for the US alone]. And that’s just the first year after the storm. The NAS puts the recovery time at four to 10 years.