Over 25 per cent of Australia’s energy generation currently falls into the three highest climate risk categories, according to the first version of the new Climate Risk Index released by insurer Zurich and consulting firm Mandala Partners.
The 25 per cent figure is expected to climb to approximately 35 per cent by 2050, and nearly 40 per cent of generation assets will face heightened climate risk during this period.
The index also found that under a likely intermediate climate scenario that assumes two degrees Celsius of warming by 2041-2060.
Under a more extreme climate scenario that assumes four degrees Celsius of warming over the same period, 43 per cent of Australia’s generation capacity will fall in the three highest risk categories by 2050, including 11 per cent of generation in the highest risk category.
The index also reveals that risk varies significantly by geography and generation type.
Western Australia and the Northern Territory, whose electricity grids run separately from the National Electricity Market, are particularly vulnerable. Some 96 per cent of generation in the NT is in the three highest risk categories, including 85 per cent of generation in risk category four, according to the Index. Similarly, WA, and Tasmania were found to have 70 per cent and 52 per cent in the three highest risk categories, respectively. Across the eastern and southern States, the risks were relatively lower.
By generation type, solar power and natural gas face significantly higher climate risks than other generators. The index found that 95 per cent of dedicated solar generation sites and 54 per cent of natural gas plants were in one of the three highest risk categories due to their susceptibility to perils such as storms and hail. Other forms of renewable energy like wind and biogas/biomass sat alongside coal with relatively low risk.
The index analyses the location of every energy generation asset across the country to form insights on the impact of climate to the grid under different Intergovernmental Panel on Climate Change scenarios. It also assesses an entire critical infrastructure asset class using quantitative measures.