Analysis
April 2023

A framework to assess multi-hazard physical climate risk for power generation projects from publicly-accessible sources

by
Tianyi Luo, Yan Cheng, James Falzon, Julian Kölbel, Lihuan Zhou, Yili Wu and Amir Habchi
Originally published by
Communications Earth & Environment

Demand for information about physical climate risk is growing, particularly for the power generation sector, given its size and pronounced exposure to climate hazards. However, quantifying physical climate risks for a large number of assets remains challenging. Here we introduce a scalable and transparent methodology that enables multi-hazard physical climate risk assessments for any thermal or hydro power generation project. The methodology relies on basic power plant type and geolocation data inputs, publicly-available climate datasets, and hazard- and technology-specific vulnerability factors, to translate hazard severity into generation losses. We apply the methodology to the European Bank for Reconstruction and Development’s early 2021 thermal and hydro power generation portfolios of 80 assets. We show that under the Representative Concentration Pathway 4.5 scenario, those 80 power plants could experience a 4.0-10.9 TWh loss in annual generation (or 1.87-5.07% of total annual maximum generation) by 2030 compared to its baseline losses of 0.70–0.87 TWh (or 0.33–0.41%). One of the largest drivers of the increased risk is rising water temperatures, which is currently overlooked by mainstream climate risk disclosure guidelines.

Insights
View all
Read More
Methods
February 2024
by
Bluerisk, Bonneville Environmental Foundation, LimnoTech and World Resources Institute
Methods
November 2023
by
Bluerisk, Bonneville Environmental Foundation, LimnoTech and World Resources Institute
Analysis
August 2023
by
Samantha Kuzma, Marc F.P. Bierkens, Shivani Lakshman, Tianyi Luo, Liz Saccoccia, Edwin H. Sutanudjaja and Rens Van Beek