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Economics of Climate Resilience: Power

Executive summary

Climate change to the 2050s and beyond poses a number of threats and challenges for the energy sector. Although subject to uncertainty, mean winter precipitation is projected to increase overall and is expected to fall increasingly frequently as intense downpour events; mean summer temperature is projected to increase and extreme weather events could increase in their intensity and frequency, potentially resulting in flooding and heat waves.

In response to these risks, Defra identified the following question as the focus ofthis report:“What is the case for further intervention in relation to climate changeadaptation for key energy supply infrastructure?Analysis should focus on:

(i) change in capacity and output of electricity(including gas) and nuclear power stations in the UK (i.e. MW and MWh);

(ii) impacts of heat on the transmission grid, and

(iii) change in seasonal demand for energy due to cooling/heating”.

The potential implications of climate change on energy distribution are also important but they are beyond the scope of this report. The projected increase in temperature is expected to have a negative effect on performance, particularly of gas-fuelled power stations. A reduction in power plant efficiency, also known as ‘heat rate degradation’ would lead to lower generating output for any given level of installed capacity. The impact of heat on transmission capacity varies depending on the particular piece of equipment. However, it is not generally considered to be greater than 1% loss per 1°C rise. Flooding can affect power generation infrastructure,rendering it temporarily inoperative.

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