Written by: Faith Jemosop
Climate change is not just an environmental crisis it is an emerging threat to the global energy sector. From disrupted electricity supplies and damaged infrastructure to water shortages affecting power generation, the very systems that power our economies are increasingly vulnerable. The energy sector, both a major contributor to and a victim of climate change, is facing rising operational, financial, and strategic risks.
As global temperatures soar and weather extremes intensify, energy systems designed for a more stable climate are being pushed to their limits. This blog post explores the multi-faceted ways in which climate change is endangering energy production, distribution, and investment, with a particular lens on Africa’s unique challenges and opportunities.
Climate Extremes Are Disrupting Energy Infrastructure
The physical risks posed by climate change are perhaps the most visible and immediate. Power plants, oil refineries, pipelines, and transmission lines are all vulnerable to the growing frequency and severity of extreme weather events.
- Heatwaves reduce the efficiency of thermal power plants and electricity transmission. As air and water temperatures rise, it becomes harder to cool generators, leading to power losses and even shutdowns.
- Storm surges and floods are inundating critical infrastructure. In 2021, Hurricane Ida knocked out over 90% of oil production in the Gulf of Mexico. Similarly, floods in Pakistan and Mozambique have damaged hydropower facilities and transmission lines.
- Wildfires, fueled by hotter and drier conditions, have destroyed grid infrastructure in countries like the U.S., Australia, and Greece, forcing energy companies to shut down services and evacuate workers.
Also read: How Climate Change Is Driving Deadly Cancer Rates Among Women in MENA
As climate risks intensify, the reliability and safety of energy systems are increasingly in jeopardy.
Water Scarcity Is Undermining Power Generation
Many energy systems rely heavily on water not just for hydropower but also for cooling in thermal and nuclear plants. However, climate change is altering rainfall patterns and reducing freshwater availability in many parts of the world.
Hydropower at Risk
Hydropower, which accounts for about 16% of global electricity production, is particularly vulnerable. Declining rainfall and prolonged droughts are leading to reduced reservoir levels and intermittent power generation.
- In Zambia and Zimbabwe, the Kariba Dam one of Africa’s largest hydropower sources operated at less than 30% capacity in early 2023 due to low rainfall in the Zambezi River Basin.
- Brazil, a hydropower-dependent country, suffered major power shortages in 2021 when a historic drought dried up reservoirs.
Thermal Plants Need Water Too
Thermal power plants (coal, gas, and nuclear) use large volumes of water for cooling. In Europe and the U.S., plants have been forced to reduce output or shut down during heatwaves due to insufficient cooling water. In regions facing both high energy demand and water stress, this dual burden becomes an existential challenge.
Energy Prices and Operational Costs Are Rising
Climate-related disruptions are also driving up the costs of energy production and supply. Energy companies must now spend more on:
- Climate-proofing infrastructure (e.g., elevating substations, building sea walls, updating grids)
- Insurance premiums for weather-exposed assets
- Backup systems to maintain reliability during outages or disasters
Moreover, climate events often disrupt supply chains for fuel and critical components like transformers and turbines, further increasing costs.
In developing countries, where resources are already constrained, these added costs can delay or derail essential energy projects, widening the energy access gap.
Global Policy Shifts and Investor Caution
Governments and international bodies are responding to climate change with new policies, which, while necessary, are reshaping energy markets and investment priorities.
Carbon Pricing and Emissions Regulation
To combat climate change, many countries have introduced carbon taxes, emissions trading schemes, and mandatory emission caps. While these tools encourage a transition to cleaner energy, they also increase the cost of fossil-fuel-based generation, making coal and gas plants less profitable.
Divestment from Fossil Fuels
Investors are increasingly moving their money away from fossil fuel projects. According to the Institute for Energy Economics and Financial Analysis (IEEFA), over 1,500 institutions representing $40 trillion in assets have committed to some form of fossil fuel divestment.
Major banks and insurers are also tightening lending standards for oil, gas, and coal, citing the long-term risks of stranded assets and climate litigation. This shift is accelerating the global transition toward renewables, but it also puts existing fossil fuel infrastructure at risk of early obsolescence.
The Energy Sector’s Irony
The energy sector is in a paradoxical position. On one hand, it is a leading contributor to climate change, with fossil fuels accounting for over 73% of global greenhouse gas emissions. On the other hand, it is one of the most affected sectors, suffering the physical and financial impacts of the very crisis it helps fuel.
This irony underscores the urgent need for a just transition one that ensures energy reliability and access while accelerating the shift to clean, climate-resilient systems.
Dual Risks and Opportunities
Africa, responsible for less than 4% of global emissions, is one of the most climate-vulnerable regions on Earth. Its energy sector faces unique challenges that illustrate the broader global crisis.
Droughts and Dams
Countries like Ethiopia, Kenya, and Malawi are heavily reliant on hydropower. But prolonged droughts linked to climate change are causing blackouts and forcing governments to import expensive diesel-generated electricity.
Rising Urban Demand Meets Fragile Infrastructure
Africa’s urban population is booming, and with it, energy demand is soaring. However, many cities are served by fragile grids that cannot cope with climate shocks like flooding, lightning, or high winds. The cost of repairing damage eats into already limited budgets for energy expansion.
Also read: Niger State’s Deadly Flood Crisis
A Renewable Future?
On the positive side, Africa has abundant solar and wind resources, and many countries are beginning to invest in distributed renewable systems. These technologies are not only cleaner but often more resilient to climate stress, especially when decentralized.
Initiatives like Kenya’s Lake Turkana Wind Power project and Morocco’s Noor Solar Complex are setting the pace. However, scaling up renewables requires investment, stable regulation, and global support areas where Africa still faces deficits.
To protect and future-proof the energy sector from climate threats, several urgent actions are needed:
- Invest in Climate-Resilient Infrastructure
Build systems that can withstand extreme weather, such as underground cables, elevated substations, and water-efficient cooling.
- Accelerate the Transition to Renewable Energy
Solar, wind, geothermal, and battery storage must become the foundation of future energy systems. These sources are not only cleaner but more adaptive to climate variability.
- Improve Regional Cooperation
Cross-border energy trade and regional power pools can help distribute risks and balance supply and demand across countries.
- Strengthen Policy and Financial Support
Governments need clear roadmaps, incentives for green investment, and mechanisms to ensure energy access during the transition.
Prioritize Adaptation in Developing Countries
International funding must prioritize adaptation strategies for energy systems in vulnerable regions like sub-Saharan Africa and Southeast Asia.
