Part of a new industry series: Powering the Future™: Climate Risk Intelligence For The Energy Industry
Electric utilities are on the front lines of climate risk. As climate change increases the frequency, severity, and duration of extreme weather events, utility infrastructure, much of it decades old, is being strained beyond its limits. These vulnerabilities are systemic and affect every part of the electric value chain: generation, transmission, distribution, and control systems.
Extreme heat decreases the efficiency of thermal power plants, causes more line losses in transmission systems, and leads to higher electricity demand for cooling, pushing grids toward overload. Wildfires, driven by prolonged droughts and high temperatures, not only damage utility infrastructure but also require preventive power shutoffs to avoid ignitions, creating significant safety and economic risks. Flooding and rising sea levels threaten substations, underground distribution systems, and power generation facilities in low-lying coastal or riverine areas. Even moderate flooding can damage transformers, corrode infrastructure, and cause service disruptions lasting days or weeks.
Windstorms and hurricanes pose major threats to transmission towers and distribution poles, especially in areas with overhead lines and limited vegetation management. These storms can lead to devastating outages, as seen during Hurricane Maria in Puerto Rico and Hurricane Ida in Louisiana. Additionally, winter storms and ice events—including those made more unpredictable by jet stream shifts—have shut down gas supply and electricity systems, like during the Texas blackouts in February 2021.
Besides physical damage, utilities also face operational volatility caused by climate change. Variations in wind and solar production, changes in water flow affecting hydroelectric power, and unusual temperature swings challenge traditional load forecasting, supply reliability, and real-time grid balancing. Utilities now must manage a more dynamic, less predictable environment with tools originally designed for stability.
Compounding these risks are aging assets, inflexible regulatory frameworks, and capital planning cycles that often neglect long-term climate uncertainty. Without proactive adaptation, utilities risk cascading failures, regulatory penalties, insurance gaps, and losing public trust. Building resilience is no longer optional—it is vital to maintaining the continuity, safety, and financial stability of the power system in a rapidly warming world.
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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