Part of a new industry series: Powering the Future™: Climate Risk Intelligence™ For The Energy Industry
As climate change accelerates, electricity generation utilities are facing increasing environmental challenges that were once thought to be rare. These include water shortages, extreme temperatures, and weather events, each of which threatens the reliability, efficiency, and safety of power generation assets across different technologies and locations.
Water stress is a critical and often overlooked threat. Thermoelectric power plants, including those powered by coal, natural gas, and nuclear energy, depend heavily on water for cooling. When rivers run low due to drought or when water temperatures exceed safe levels, plants must reduce their output or shut down completely. Competing demands for water from agriculture, cities, and ecosystems worsen these tensions, especially in arid and semi-arid areas. Hydroelectric power directly depends on water availability and seasonal flow patterns, making it vulnerable to changes in precipitation and snowpack variability.
Extreme heat presents both operational and demand challenges. High outdoor temperatures decrease the thermal efficiency of gas and coal turbines, raise the risk of overheating, and can lead to derating in solar photovoltaic (PV) panels. At the same time, rising temperatures cause spikes in electricity demand, especially for air conditioning, while generation capacity is reduced. Extended heat waves can also jeopardize workforce safety and equipment performance, adding to reliability concerns.
Severe weather disruptions, including hurricanes, wildfires, flooding, ice storms, and high winds, pose a growing and expanding threat across more areas. Generation assets in coastal zones, floodplains, or wildfire-prone areas are increasingly vulnerable to physical damage, fuel supply disruptions, and extended outages. Renewables are also affected: wind turbines may be shut down during extreme gusts or icing conditions, and solar panels can be damaged by hail or covered with ash during wildfires.
These risks are no longer episodic; they are structural. Utilities must therefore rethink how they evaluate and handle operational risk, shifting from reactive crisis response to proactive resilience planning. This includes incorporating climate projections into siting and design, improving flexibility with hybrid systems and storage, and creating contingency plans for compounded hazards. In an era of climate disruption, utility companies need to prepare for a future where extremes become the norm.
Ready to get started? To learn more about how ClimaTwin can help you assess the physical and financial impacts of future weather and climate extremes on your infrastructure assets, capital programs, and investment portfolios, please visit www.climatwin.com today.
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