Building Climate Resilient Utilities 2025

In addition, compound extreme events – such as sequential heatwaves and precipitation (SHP) and concurrent droughts and heatwaves (CDH) across China – have increased substantially in frequency, duration and magnitude. Nationwide, their duration is projected to double, with more significant rises under higher emission scenarios (e.g. SSP5-8.5).7 By the 2050s, about half of China will be affected by SHPs with CDHs affecting three-quarters of the country.8 The nation is now confronting a new risk landscape characterized by a documented increase in the frequency, intensity and unpredictability of extreme weather events. This is the new normal of climate variability, where historical data is no longer a reliable guide to future risk. The new climate landscape does not merely threaten isolated assets; rather, the systemic vulnerabilities of interconnected utility infrastructure are becoming increasingly exposed and exploited. A single extreme weather event can now trigger a cascade of failures across the power, water and gas sectors, leading to operational paralysis, severe economic disruption and societal distress. The infrastructure designed for a stable 20th-century climate is proving dangerously fragile against the dynamic forces of the 21st. The power sector is on the frontline, under attack by a pincer movement of record-breaking demand and crippled supply.9 Extreme heatwaves – such as the one in summer 2022 that saw Sichuan’s peak electricity load surge by 25% and an increase in daily residential consumption of more than 200% – simultaneously drive unprecedented demand for cooling while undermining generation capacity.10 Wind power output drops sharply – or even ceases entirely – in stagnant, hot conditions, while photovoltaic (PV) efficiency declines by 0.3-0.5% for every 1°C temperature rise, with risks of component damage with mounting temperatures.11 Extreme drought and flood disasters, particularly the increasingly frequent and intense alternations between drought and flood, are posing severe threats to the stable output and reliability of hydropower generation.12 At the other extreme, sudden cold snaps can cause widespread icing on wind turbine blades. One such event in late 2023 forced the shutdown of over 2 GW of capacity at a single company and threatened grid stability during peak winter demand. Under the compound effects of extreme drought, low wind and weak solar radiation, the annual utilization hours of China’s hydro-wind-solar power system are projected to decline by nearly 12% between now and 2060.13  While climate extremes can clearly affect the supply capability of power generation facilities, they can also put the physical infrastructure at risk. Coal-fired power plants, for example, are vulnerable to multiple climate hazards. Extreme heat degrades cooling performance and lowers thermal efficiency, forcing units to operate at elevated temperatures that accelerate wear and increase the likelihood of equipment damage. Coastal power plants face significant risk from flooding, where seawater intrusion can inundate facilities, submerging critical equipment such as generators and turbines, causing short circuits and widespread component failure. Intense typhoons now exceed the design thresholds of coastal wind turbines. In 2024, Typhoon Yagi caused catastrophic tower collapses and blade fractures, leading to a power outage affecting more than 1.6 million people.14 Inland, river floods driven by torrential rain not only inundate power plants and substations but also unleash secondary disasters. Severe convective storms, especially freezing rain and hail, can shatter PV panels and damage grid assets. In March 2024, hailstorms in Jiangxi destroyed large sections of a local solar farm. These impacts cascade directly onto other essential services. The urban gas supply network, a web of linear infrastructure, is highly susceptible. Flooding and typhoons can damage or rupture pipelines, creating significant public safety risks from gas leaks and potential explosions. Extreme cold strains the system by causing demand for heating to spike, while simultaneously risking freeze-ups in critical equipment. Urban water supply faces similar destructive extremes of “feast or famine”: floods can contaminate water sources with sediment – increasing turbidity by orders of magnitude and overwhelming treatment plants – while prolonged droughts deplete reservoirs, forcing cities into disruptive water rationing. For all utilities, these events translate into a daunting financial reality of soaring repair costs, lost revenues and an urgent need for massive capital investment in resilient upgrades. In this new climate of extreme weather impacts, the lesson is clear: the resilience of a single utility is inseparable from the resilience of the entire system.1.2 Systemic vulnerabilities: cascading impacts on critical utility infrastructure The power sector is on the frontline, under attack by a pincer movement of record-breaking demand and crippled supply. Building Climate-Resilient Utilities: Lessons from China and Future Pathways 7