More frequent and graver extreme events continue to remind us of the perils of climate change, but systematic consideration of these extremes in energy systems studies and full accounting of their impacts remains a challenge.
Extremes in energy systems
Energy systems are increasingly more prone to extreme events as the climate crisis worsens. This Focus issue explores the role of extremes in the future of energy from the perspective of finance, law, systems and climate modelling.
The number of plaintiffs taking energy firms to court for ignoring climate-related risks is growing. By revealing how the sector is not prepared — and not preparing — for what is coming, their cases are pressing the energy sector to treat those risks as a cost of doing business.
Despite increased awareness among investors, physical climate risk from extreme weather remains surprisingly unaccounted for in financial markets. Without better knowledge of this risk, the average energy investor can only hope that the next extreme event will not trigger a sudden correction to the market values of energy firms.
Energy firms struggle to incorporate climate risks in their planning and public disclosures. This lack of information is increasing the chances that herd behaviour in finance could potentially lead to sudden disruptions in energy supply and exacerbate consequences of climate-related extreme events.
Scenarios are the primary tool for examining how current decisions shape the future, but the future is affected as much by out-of-ordinary extremes as by generally expected trends. Energy modellers can study extremes both by incorporating them directly within models and by using complementary off-model analyses.
Anomalous seasons such as extremely cold winters or low-wind summers can seriously disrupt renewable energy productivity and reliability. Better seasonal forecasts providing more accurate information tailored to stakeholder needs can help the renewable energy industry prepare for such extremes.
Climate change entails an intensification of extreme weather events that can potentially trigger socioeconomic and energy system disruptions. As we approach 1 °C of global warming we should start learning from historical extremes and explicitly incorporate such events in integrated climate–economy and energy systems models.
Climate change will induce not just a change in average temperature but higher frequency of extreme weather events, whose impacts are hard to quantify. Perera et al. quantify the impacts of climate induced extreme and regular weather variations on energy systems determining requirements for system reliability.