Climate change risks & adaptation responses for UK electricity generation. A sector overview 2015.

In 2010, nine electricity generating companies received Directions under the provisions of the Climate Change Act (CCA) 2008 to report to Defra on how they were assessing and acting on the risks posed to their businesses by climate change. A report summarising the findings of the individual companies’ reports, which drew broad conclusions that were applicable to the UK generation sector as a whole, was delivered in July 2011. The second summary report was delivered in 2013 and aimed to inform the next UK Climate Change Risk Assessment and the National Adaptation Programme.

In this second summary report, it was clear that substantial progress has been made by generating companies in completing actions identified in the first reporting round. This has led to a decrease in risk from future climate change for the sector, albeit from an already low risk base established in 2011. The extreme weather conditions occurring in Winter 2013/14 provided the sector with the opportunity to evaluate its climate change adaptation assessment and resilience profile in the context of real extreme events. Electricity generation demonstrated a high level of resilience to potential disruption from the weather events that occurred. All of the reporting companies have corporate risk management processes which are covered by company policies and have procedures that are subject to regular internal review and audit. The decision of whether, and when, investments should be made to mitigate climate change risks is therefore an integral part of those companies’ risk management processes, ensuring that essential investments are made in a timely manner but also enabling close management of investment appraisals in areas of greater uncertainty.