Changes in climate and water availability adding stress and costs to global electricity sector
Accroding to an Acclimatise global report, backed by IBM, nearly all electric utilities claim climate change is threatening power outages, higher costs and changes in usage as demand grow to power the worl'd expanding cities.
According to an Acclimatise global report, backed by IBM (NYSE: IBM), nearly all electric utilities claim climate change is threatening power outages, higher costs and changes in usage as demand grows to power the world's expanding cities.
Over ninety percent of global electric utilities that report climate change activity to the Carbon Disclosure Project recognised they are at risk from changes in climate and water availability, which are already adding stress to the sector.
However, less than a third claimed to undertake any financial or quantified evaluation to the impact of climate change on their business.
The report suggests the energy industry is rapidly approaching a critical stage of development.
As demand is growing from new requirements such as electric vehicles, increased cooling during warmer summer months and rapid urbanisation, utilities need to attract new financial investment to grow existing capabilities and develop emerging technologies in a low carbon way.
Without correct adaptation measures built into business plans, climatic risks could impact a utility company's financial and operational performance, potentially leading to additional operational and capital expenditure.
Financial projections made today based on current life, performance and value of assets may not be robust, which could impact a utilities value and interest from investors.
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