Climate risks to the renewable energy sector: Assessment and adaptation within energy companies

Abstract

AbstractThe importance of the renewable energy sector in mitigating climate change has received plenty of attention over the years, but climate risks to the renewable energy sector, and the need for adaptation within energy companies, have been largely overlooked. Subsequently, not much is known about the current state of climate risk assessments and adaptation measures within the renewable energy sector. This study addresses this gap by categorising different types of climate risks faced by renewable energy companies and the measures that are used to prepare and adapt to them. We summarise the existing literature on climate risks and adaptation within the renewable energy sector and carry out an interview‐based qualitative case study regarding energy companies' perception and assessment of climate risks in Finland. The results show that while companies are aware of climate risks, particularly concerning the green transition, climate risks are not comprehensively assessed, and adaptation measures mainly account for direct physical risks with little regard for more systemic and complex risks, such as cross‐border impacts or cascading risks.