The Climate Risk Index, a comprehensive analysis of the geographical distribution of energy assets across the country, reveals that over 25% of current energy generators are at a high risk of climate-induced impacts, with expectations of this number rising.
Zurich anticipates that by 2050, 35% of energy grids will be classified as high risk, based on a projected 2°C increase in global average temperatures. The report also explores a more severe scenario with a 4°C temperature rise, indicating that nearly 43% of businesses would face significant risk, with approximately 11% reaching the highest risk level.
The study identifies the Northern Territory (NT) and Western Australia (WA) as the regions most susceptible, with 96% and 70% of grids falling within the three highest risk categories, respectively.
Solar and gas energy generators emerge as the most vulnerable, with approximately 95% of solar panels categorised as high risk due to the impact of natural hazards such as storms and hail. In contrast, other energy sources like coal, wind, and biomass report comparatively lower risk levels.
CEO Justin Delaney of Zurich Australia and New Zealand said that the report offers crucial insights into the often overlooked risks associated with worsening climate impacts. Delaney specifically points out insurers, identifying them as being on the “front line of risks relating to climate change.”
He said: “Australia’s energy generation assets underpin almost every aspect of economic and social interaction in the 21st century, however, much of the focus to date has centered on the risk of the energy grid to climate change, rather than on the risk of climate change to the grid. This analysis hopefully represents a constructive input into achieving an appropriate and resilient energy transition.
He continued: “More broadly, it also serves to highlight the quantum of data and quality of insights that are now available to understand the prevailing risk environment so we can shape and prepare our collective response.”
Also commenting on the report, Mandela Partners Partner Adam Triggs said the data shines a light on the fact that “that there is no part of our economy or society not impacted by the effects of climate change”.
He continued: “As our report shows, our energy grid needs to be more resilient to climate events. Proper site selection and planning for new generation is critical given variability in hazard type and severity is significantly impacted by geography and topography.
Triggs added: “Beyond this, adaptation measures are also important for building resilience, particularly for existing sites.”
Join Zurich leaders in Hong Kong at Insurtech Insights Asia 2023
Leaders from Zurich Insurance will be speaking at the Insurtech Insights Asia 2023 conference, at the Kerry Hotel on December 6th and 7th.
Jon Ford, Head of Partnerships, APAC for Zurich, will be a panelist in the session entitled: “Transformation Demystified – Driving Digitalisation”
For more information on speaker opportunities, events, sponsorships and tickets for the upcoming Insurtech Insights Asia 2023 conference, visit: https://lnkd.in/gzAzjGF
Author: Joanna England
