Climate Resilience

The electricity system is witnessing increasing pressure from climate change. Global warming, more variable precipitation patterns, rising sea levels and extreme weather events already pose a significant challenge to the resilience of electricity systems, increasing the likelihood of climate-driven disruption.

Climate change directly affects every segment of the electricity system. It impacts generation potential and efficiency, physical resilience of transmission and distribution networks, and demand patterns. In many countries the increasing frequency or intensity of extreme weather events such as heat waves and cold waves, wildfires, cyclones and floods are the dominant cause of large-scale outages. The recent outages due to heatwave in California, cold wave in Texas, and wildfires in Australia demonstrate that electricity systems are already exposed to and largely affected by climate hazards.

Higher global temperatures could lead to decreasing efficiency, changing generation potential and affecting demand for heating and cooling. Changes in precipitation patterns may alter generation output, potential, peak and variability while posing physical risks to transmission and distribution networks. Sea-level rise can limit further development of new assets and damage electricity systems near coastlines. In addition, electricity systems are also vulnerable to more intense or frequent extreme weather events which could lead to physical damage to energy assets and reduce efficiency.

A climate-resilient electricity system, which has the ability to anticipate, absorb, accommodate and recover from adverse climate impacts, brings multiple benefits to electricity security. First, it reduces the potential damage and loss from climate impacts. Recent studies suggest that the benefits of resilient electricity systems are much greater than the costs in most of the scenarios considering the growing impacts of climate change. For instance, in some vulnerable countries, underground transmission and distribution cables can significantly reduce potential damage from climate impacts and save recovery costs, although they may require higher upfront outlay than above-ground systems.

Moreover, adopting climate resilience measures contributes to improved electricity access. In Zambia, where only 30-40% of the population have access to electricity, a shorter rainy season and more frequent droughts significantly limit progress towards universal electricity access by reducing hydropower generation and prompting blackouts. The adoption of climate resilience measures, such as an improved system for monitoring climate hazards and a strategy for diversifying the electricity generating mix could help Zambia ensure reliable access to power networks.

Climate resilience also facilitates clean energy transitions, enabling more electrification solutions and accelerating the transition to renewable energy technologies, which are often sensitive to a changing climate. Adoption of measures to build climate resilience is vital, especially the case in countries whose electricity infrastructure is vulnerable to changes in climate and extreme weather events. 

This report proposes a step-by-step application of measures for improving the climate resilience of electricity systems. It consists of six steps:

• Assess climate change risks and impacts: A comprehensive climate risk and impact assessment provides a strong scientific foundation for development of strategies and plans for climate resilience.
• Mainstream climate resilience as a core element of energy and climate plans and regulations: Integrating climate resilience into national strategies and plans sends a strong signal to utilities and investors to build a climate-resilient electricity system. However, the present level of commitment and progress varies considerably across countries. Only 18% of International Energy Agency countries have developed concrete plans for the climate resilience of their entire electricity systems in national adaptation strategies.
• Identify cost-effective resilience measures: Plans and guidelines to enhance resilience to climate change can help utilities identify the most cost-effective measures at the planning stage. They encourage utilities to consider all available resilience measures over the entire life cycle of an asset, and estimate their cost-effectiveness based on the estimation of synergies with other business objectives and trade-offs.
• Create appropriate incentives for utilities: Although utilities have a direct interest in protecting their assets against adverse effects of climate change, appropriate incentives can encourage timely investment in resilient electricity systems. An incentivisation mechanism, such as performance-based rate making, catalyses investment in resilient electricity systems.
• Implement resilience measures: Physical system hardening, advanced system operation, better co-ordination of recovery efforts and capacity building enhance the climate resilience of electricity systems.
• Evaluate effectiveness and adjust resilience measures: Adjusting resilience measures based on an evaluation system and consultation with stakeholders enables the constant improvement of adopted resilience measures.

Projections indicate that the world is very likely to experience greater climate hazards over the rest of this century. The continued increase in temperatures is expected to lead to sea level rise and a decline in snow cover and glaciers. Annual mean precipitation is projected to exhibit substantial regional variation, increasing in some countries while decreasing in others. Extreme weather events such as heatwaves, wildfire, tropical cyclones and floods are expected to become more frequent or intense in many countries.

Changing climate patterns and extreme weather events pose an increasing threat to electricity security. Climate change directly affects all domains of the entire electricity system. It impacts generation potential and efficiency, physical resilience of transmission and distribution networks, and demand patterns. Adverse climate impacts could lead to longer electricity outages, with negative effects on the economy and society. They may also hinder the energy transition towards low-carbon energy sources since renewable energy technologies are often sensitive to climate variability. The uncertainty and complexity of the earth’s climate system makes it challenging to assess specific impacts of climate change on electricity systems and identify effective measures for electricity security.

To minimise the adverse impacts of climate change, effective policy measures have a central role to play in accelerating action by key actors. Although businesses have responsibility for and a direct interest in protecting their own assets and providing reliable services to their customers, there are several factors that may deter some from adopting resilience measures in practice. Consequently, it is the job of policy makers to collaborate with businesses and encourage them to build resilient electricity systems by adopting effective policy measures that can prevent potential “market failure”.

Some countries have already introduced tools and guidelines to anticipate, absorb, accommodate and recover from present and projected climate impacts. However, many others still have a significant policy gap in bringing climate resilience into the mainstream of long-term energy planning and electricity security.

Building a clear assessment framework for climate impacts and resilience is the first step to ensure all stakeholders properly understand projected changes in climate. After establishing a common assessment framework, policy makers need to send appropriate signals to essential service providers. They can encourage utilities to include climate resilience in their construction plans and operational regimes by emphasising climate resilience as a core element of their own long-term energy and climate policies. Identifying cost-effective resilience measures and creating an incentive mechanism also encourage utilities to adopt resilience measures. With supportive policy measures, businesses can implement resilience measures, such as physical system hardening, improvements in system operation, recovery planning and capacity building. Evaluating the effectiveness of the implemented resilience measures and adjusting them according to the results will enable the constant improvement of climate resilience.

This report aims to support policy makers and other relevant stakeholders in preparing for growing climate impacts on electricity systems. It provides an overview of climate observations and projections; assesses climate impacts on electricity systems with real-world examples; describes the benefits of climate resilience; and presents effective measures to mitigate the adverse effects of climate change. This report addresses the following questions:

• What types of climate hazards will we face?
• How does climate change impact electricity systems?
•  What is “climate resilience” and what are the benefits of enhancing the resilience of electricity systems to climate change?
•  Which policy measures can help to enhance climate resilience?

Discussing the questions above, this report introduces various terms and definitions. The following table describes the principal terms used in this report, aligned with the terminology of the United Nations Intergovernmental Panel on Climate Change. These terms align with the electricity security-related terms applied throughout this IEA report.