In an article for Utility Dive, Navigant discusses climate change-related risks for utilities and the actions being taken
The release of the Fourth National Climate Assessment found energy systems across the U.S. will be increasingly affected by extreme weather events including wildfires, hurricanes, and changing rainfall patterns because of climate change. While preparations and improvements are being made, the scale, speed, and scope need to increase in order to safeguard reliable energy delivery.
In an article for Utility Dive, Navigant’s Frank Stern, managing director; Ian Trim, director; Danielle Vitoff, associate director; Sarah Hendel-Blackford, managing consultant; Kaboo Leung, senior consultant; and Rodrigo Leal, senior consultant, discussed what utilities in the U.S. and Europe are doing to prepare for increasingly severe and frequent extreme weather events.
For instance, after Hurricane Sandy in 2012, Con Ed invested $1 billion to fortify its energy delivery system against extreme weather. Additionally, the U.S. Department of Energy launched Partnership for Energy Sector Climate Resilience, which brings together utilities and challenges them to develop new ways to manage the risks associated with climate change.
According to the article, climate change is expected to affect all regions of the U.S., bringing an increase in frequency and intensity of flooding, drought, and energy demand due to increased cooling across various parts of the country. Utility investors will be expecting increased rigor in risk disclosures, as some of the major climate-related liabilities have not been anticipated.
In Europe, utilities are undertaking climate vulnerability and/or risk assessments to prepare for climate change impacts, with most undertaking a multi-stakeholder and science-based approach to assess climate resilience up to 2050s.