Commentary: The energy sector is feeling the heat
It has been a summer of broken heat records in the northern hemisphere, from Japan to Spain and Oman to Canada. News headlines have underscored the heavy toll that extreme heat can bear on human health and lives, with prolonged high temperatures further fuelling droughts and wildfires. Yet it is also important to recognize the less obvious impacts on the fundamental systems and services upon which we all depend, including energy.
We needn’t look far to spot the impacts of this summer’s unusually high and persistent temperatures on the energy sector. In France, four nuclear reactors were shut down to comply with maximum temperature regulations for water discharge. On the Rhine, low water levels disrupted barge traffic of refined oil products making their way to markets in Germany and Switzerland, causing barge freight rates to surge and lowering demand. Air conditioner sales soared, while their use pushed up peak electricity loads, causing blackouts in Los Angeles and forcing authorities in Tehran and Karachi to resort to load shedding. As a result of drought conditions in Pakistan, the water levels of its two largest dams reached “dead” levels, beyond which water cannot be drained through gravity – a historic first for the Tarbela Dam. Finally, wildfires in California linked to heat and drought, including the largest in the state’s history, damaged energy infrastructure and caused blackouts.
While any one of these events may be manageable in isolation, shifting “normals” driven by climate change mean that extreme heat events, water scarcity and increased cooling demand will only become more severe and/or frequent over time. Without adequate preparations, these changes will inevitably put increasing strain on our energy systems and raise the risk of wider disruptions.
The IEA has undertaken a range of analysis on climate-related impacts on the energy sector. For example, we have assessed the impact of rising ambient air temperatures on cooling demand, finding that cooling degree days (the deviation from a standard temperature used to gauge cooling demand) could rise by 25% by 2050. On the critical issue of changing water patterns - due to climate change and other factors - we examined how water needs of the energy sector could change in various energy transitions scenarios and conversely, how different technology and fuel choices could impact water stress. We also assessed the impact of rising water scarcity on coal-fired power plants in China and India, finding for instance in China, capacity of coal-fired power plants fitted with dry cooling technologies rises by two-and-a-half times by 2040 in a scenario with rising water scarcity. Resilience is enhanced when countries share experiences and best practices, which the IEA has convened through its Climate-Energy Security Nexus workshops.
Key Point: The capacity of the fleet of dry-cooled coal-fired power plants increases by two-and-a-half-times from 2014 to 2040 in the New Policies Scenario, when rising water scarcity is considered. Dry cooling technology uses very little water, but tends to have higher capital costs and lower efficiency.
Governments must play a central role in enhancing energy sector resilience to changing climate. This can be done by supporting collection and dissemination of climate data and undertaking climate risk assessments, strengthening technical standards and infrastructure codes, and establishing an enabling financial environment that encourages climate-resilient investment. Meanwhile energy businesses and operators need to integrate changing climate conditions into asset planning and operations, and to develop emergency response measures in case of extreme events. The insurance sector can develop risk-sharing tools and incent resilience-building behaviour.
As the climate is changing, so is the energy sector. There are a range of priorities that are now being considered as the energy sector evolves, including decarbonisation, environmental sustainability, energy access, affordability and economic development. Likewise, climate resilience and energy security must be considered in tandem, to ensure that we build a dynamic, sustainable and secure energy system adapted to future challenges and opportunities.