Zurich, Mandala partner to unveil first climate risk index for power sector

The index is a comprehensive quantitative climate assessment for the entire energy generation sector.

Zurich Financial Services Australia and Mandala Partners have jointly released Australia's first Climate Risk Index for the national energy generation sector. 

Utilising Zurich's global exposure analysis capabilities, the index is a comprehensive quantitative climate assessment for the entire energy generation sector, providing insights into the impact of climate change on the grid under different IPCC scenarios. 

The report found that under a likely intermediate climate scenario with a two-degree Celsius warming by 2041-2060, over a quarter of Australian energy generation is in the three highest climate risk categories, set to rise to around 35% by 2050. 

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Under a more extreme scenario with four degrees Celsius warming, 43% of Australia's generation capacity will fall into the three highest risk categories by 2050. 

The report highlighted geographical and generational type variations in climate risk. Western Australia and the Northern Territory are particularly vulnerable, with 96% of NT generation in the three highest risk categories. 

Solar power and natural gas face higher climate risks compared to other generators. The report aims to contribute to understanding the risk environment for effective energy transition and resilience building.