IBM-Sponsored Report: Utilities Not Ready For Climate Change

NEW YORK -(Dow Jones)- A report sponsored by International Business Machines Corp. (IBM) says that 90% of utilities around the world know they are at risk from climate change but fewer than a third said they have performed any financial review of the possible impacts on their business.

Utilities face a variety of potential problems from climate change, including shortages of water to cool plants, increased generation demand from hotter summers and power outages from more frequent severe weather, according to the report. They also face challenges as society tries to address the need to curb carbon emissions with new technologies like electric vehicles, which will increase electricity demand.

IBM’s Global Industry Leader, Energy and Utilities Consultant Michael Valocchi said in an interview with Clean Technology Insight that there are a variety of reasons that these utilities have stalled on factoring the financial impact of climate change into their business models.

“There is a high level of uncertainly around what the exact impacts would be,” making it difficult for utilities to know exactly how to respond,” he said.

Other factors include uncertainty about the timing of climate change results and a lack of a standard financial model for factoring these changes into a business model, Valocchi said.

Dow Jones