An uptick in extreme weather events is one reason why North American power and gas companies may need to manage risk differently. Weather-related events have become more frequent in recent decades, and the resulting damage comes with hefty price tags, partner Roland Rechtsteiner and coauthors note. There were 97 natural disasters between 1984 and 2003 that cost more than $1 billion. From 2004 to 2023, that number rose to 273. Extreme weather events can affect demand for utilities, threaten aging infrastructure, and result in volatile fuel costs.
Image description:
A stacked bar graph depicts the number of US billion-dollar-plus natural disaster events each year from 1980 to 2022, adjusted for inflation. Disasters are categorized as wildfire, drought, freeze, winter storm, flooding, tropical cyclone, and severe storm. The graph shows an overall increase in the number of billion-dollar disasters. From 1984–2003, there were 97 major (>$1 billion) storms. From 2004–23, there were 273 major storms. The graph shows a notable increase in severe storms in the past 20 years.
Source: National Centers for Environmental Information, Nov 8, 2023.
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To read the article, see “Unlocking value from power and natural gas trading in North America,” November 5, 2024.