Climate Risk Management Approaches in the Electricity Sector: Lessons from Early Adapters



Climate change adds a new source of unknowns for the electricity sector. Despite considerable risks and opportunities, energy sector actions to manage climate change risks and take advantage of future opportunities remain limited and patchy. An estimate of the sums spent since 2000 and planned out to the 2020s by five utilities on climate risk management totals US$1.5 billion. Considering that these investments are to address climate change risks or opportunities of a considerable magnitude, they are relatively modest. The sector has focused on climate data analysis and research on impacts rather than on concrete capital, technological and/or behavioral adaptation responses. Further, most of this research is concentrated for the most part in the developed world and on a handful of climate change impacts. Analysis of early adapters in the electricity sector offers a number of useful lessons for power utilities, regulators and stakeholders in the developing world, for instance: (i) joint efforts between the electricity sector and hydrometeorological offices to develop high quality and tailored climate data and information are needed to avoid ‘wait-and-see’ strategies among power utilities; (ii) energy sector adaptation requires going beyond high level research on impacts and adaptation to produce information that can be applied operationally; (iii) without a business environment favorable to climate change adaptation, power utilities have little incentive to go beyond ‘business-as-usual’ weather risk management; and (iv) it is by building the economic case for adaptation that utilities can be incentivized to take action.


Climate Change Impact Flood Risk Climate Change Adaptation Environmental Impact Assessment Climate Risk 
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Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  • Pierre Audinet
    • 1
  • Jean-Christophe Amado
    • 2
  • Ben Rabb
    • 3
  1. 1.ESMAP–World Bank GroupWashingtonUSA
  2. 2.Deloitte (formerly Acclimatise)OttawaCanada
  3. 3.AcclimatisePascoe HouseCardiff BayUK

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