Safeguarding NDC Implementation: Building resilience into energy systems

Submitted by Ziona Eyob | published 30th Jan 2019 | last updated 13th May 2019

Introduction

This short brief* aims to enhance awareness and highlight the importance of integrating weather and climate-related risk into the planning stages of energy infrastructure development. As countries are developing long-term low-carbon development strategies and pursue mitigation measures as part of their Nationally Determined Contribution (NDC), it is essential to increase understanding about the need to identify and assess climate-related risks when appraising new energy projects or managing infrastructure portfolios. Taking into consideration the potential risks of climate change will improve the response rate of the energy system to environmental stresses while safeguarding investments into mitigation efforts and the integrity of energy assets and systems.

Identifying and quantifying the risks arising from physical changes expected to occur as the planet
warms must be a critical part of the traditional risk assessment and management process. Likewise, incorporating climate-related risks during the planning phase will strengthen the case for investors and lenders.

*Download the full brief from the right-hand column or follow this link for more information.


From page 3 of the brief: A hydropower dam

Why Incorporate Resilience into Energy Systems?

The energy sector will be exposed to several climate-related risks that arise from increasing temperatures, variability in rainfall patterns and increased frequency of extreme weather events. Climate-sensitive locations such as low-lying coastal areas will be particularly susceptible to climate risks and impacts. The European Union Energy Initiative Partnership Dialogue Facility (EUEI PDF) outlines the main impacts of climate change on different types of energy infrastructure (Table 1).


Table 1. The main physical impacts of climate change on energy generation sources by climate stressor (page 2).

Key findings (abridged)

Building resilience into energy systems can be addressed through a combination of different strategies and approaches:

Climate vulnerability risk assessments entail an evaluation of vulnerabilities and long-term local weather and climate variability that may affect a proposed energy infrastructure project over its lifetime.

  • They help to identify and quantify the physical climate-related risks on specific assets in specific geographies.
  • It will be critical to gain a comprehensive understanding of the vulnerabilities an energy system may face as well as the potential effects on revenues, expenditures and financing.

Technological strategies are engineering-based strategies that involve building protective measures into infrastructure through design of new infrastructure or refurbishment of vulnerable components in existing infrastructure.

  • These strategies, also known as hard solutions, are built to be “fail-safe,” meaning that they help infrastructure resist the impacts of climate change.

Green infrastructure strategies include strategically planned networks of natural and semi-natural areas designed and managed to deliver a wide range of ecosystem services to mitigate unintended weather and climate-related risks.

  • Natural infrastructure can help enhance stormwater management capabilities in ways that reduce vulnerabilities to flooding, erosion and greater storm surges, particularly in coastal areas.
  • In urban environments, green spaces can also mitigate the urban heat island effect through cooling.

Behavioural strategies are non-engineering-based strategies that involve creating systems that can recover quickly from disruptions and respond differently based on new information.

  • They may consider relocation of infrastructure, anticipating extreme weather events through forecasting, or adjusting maintenance and operation of infrastructure.

Financial strategies may include expanded insurance requirements as one of the most typical risk-sharing instruments.

  • In general, the insured party pays a higher premium to the insurance company, which in return covers the risks regarding one or more of the identified climate-related risks.

Lessons Learnt

Investment into sustainable energy systems is a powerful driver of development and economic activity and critical to meeting the goals set out in the Paris Agreement. 

Comprehensive risk analyses and designing a combination of risk mitigation strategies will ensure:

  • Improved robustness, resourcefulness and recovery capacities of energy systems to the risks of climate change. 
  • Energy systems can be brought back to full operation after a disturbance. 
  • Projects are financially viable and able to attract investments from the lending community. 
  • The overall ability and effectiveness of the energy sector is improved to respond to and deal with climate-related risks.