Potential Impact

The potential impact from climate and geophysical hazards on the physical and structural components of the project is assessed for each of the subsectors addressed in the project (except for the energy capacity building subsector, as discussed in the screening stages section). This potential impact is the combination of exposure and sensitivity of physical assets and systems. The potential impact ratings rely on the user’s subject matter expertise and contextual understanding.
Subsectors: Because the nature of physical investments and associated potential impacts vary significantly from one subsector to another, the energy screening tool asks users to assess impacts separately for six identified subsectors: Oil, Gas, and Coal; Thermal Power; Hydropower; Other Renewable[Energy]; Energy Efficiency [in heat and power and end use]; and Transmission and Distribution[of electricity]. These subsectors align with the World Bank internal coding systems.
To reduce the burden on users, the tool restricts them to selecting up to three of the above-named subsectors that together represent the majority of their project investments. This organization allows the user to capture the particular sensitivities within each subsector. In addition, the assessment results may be displayed by subsector, enabling users to identify the elements of their project that are subject to high potential impacts.
Evaluating historical trends: Potential impacts are evaluated separately for the Historical/Current and Future timeframes, because the level of potential impact may change as exposure changes over time. It is important to first evaluate historical trends and current baselines to understand the conditions and trends under which energy systems are currently operating. For example, recent trends may indicate that increasing temperatures are reducing the efficiency of thermal power generation or that increasing drought conditions are decreasing water availability for thermal power cooling.
Potential impacts are evaluated separately for the Historical/Current and Future timeframes because the level of potential impact may change as exposure changes over time. It is important to first evaluate historical trends and current baselines to understand the conditions and trends under which energy systems are currently operating. For example, recent trends may indicate that increasing temperatures are reducing the efficiency of thermal power generation or that increasing drought conditions are decreasing water availability for thermal power cooling. Then, using the projections for future climate in that location and relating them to the relevant time scale (see Figure 2), users can focus on the aspects of their project that will be relevant to the outcome of the project in the Future time frame. For investments with long lifetimes, such as physical infrastructure, considering future conditions is critical to avoid “locking in” designs that are not suited for higher sea levels or warmer temperatures. For example, coastal energy infrastructure may be more vulnerable if it is located in areas that will be more exposed to sea level rise, storm surge, and coastal flooding in the future, or if the infrastructure is not designed to withstand more frequent or severe flooding.
Rating future impact: Using the projections for future climate in that location and relating them to the relevant time scale (see Figure 2), users may focus on the aspects of their project that will be relevant to the outcome of the project in the Future time frame. For investments with long lifetimes, such as physical infrastructure, considering future conditions is critical to avoid “locking in” designs that are not suited for higher sea levels or warmer temperatures. For example, coastal energy infrastructure may be more vulnerable if it is located in areas that will be more exposed to sea level rise, storm surge, and coastal flooding in the future, or if the infrastructure is not designed to withstand more frequent or severe flooding.
Figure 3. Impacts of increased temperatures, change in precipitation
and increased evaporation on the electricity sector.
Potential impact is rated separately by hazard, because the nature of potential impacts is different for each hazard. For example, high temperature may reduce the efficiency of major equipment and cooling in oil, gas, and coal mining, whereas flooding may cause physical damage to mining, drilling, and processing facilities. Figure 3 shows examples of the different impacts that increased temperatures, changes in precipitation, and increased evaporation may have on electricity generation, transmission and distribution, and demand.6
The rating scale for potential impact is:
Insufficient Understanding No Potential Impact Low Potential Impact Moderate Potential Impact High Potential Impact
In selecting these ratings, users combine sensitivity considerations with the previous exposure ratings to assess potential impact. Therefore, the potential impact ratings may or may not align with the exposure ratings: for example, even if drought-tolerant biomass crops are highly exposed to drought, the potential impact may be low due to the crops’ extremely low sensitivity to drought. Furthermore, these ratings depend on subject matter expertise and contextual understanding. Annex B provides a list of resources on the potential impacts to climate change for the energy sector.
6 Adapted from Figure 12.5.Compounding impacts of drought on energy in Garlin et al. 2013.Assessment of Climate Change in the Southwest United States. A Report Prepared for the National Climate Assessment. http://swccar.org/sites/all/themes/files/SW-NCA-color-FINALweb.pdf.