SINGAPORE, August 7, 2023 – The emerging El Niño could cause wind drought and storms in Asia Pacific (APAC) countries, which would have a significant effect on renewable energy production, such as wind and solar resources in the region. This is according to a new report launched by WTW (NASDAQ: WTW), a leading global advisory, broking, and solutions company.
The review highlights how different 2023 has been to date with five Category 5 storms in the first five months. This includes Extremely Severe Cyclonic Storm Mocha, which caused widespread coastal flooding in Myanmar and Bangladesh, as well as Super Typhoon Mawar, the most powerful storm of 2023, which passed through Philippines, Taiwan and Japan.
New Zealand has also declared only its third-ever national state of emergency in February following Cyclone Gabrielle, which costed economic losses amounting to NZ$13.5 billion (US$8.4 billion). The most damaging feature of the storm was heavy rainfall, which was exacerbated by large woody debris from forestry operations clogging rivers and destroying buildings and infrastructure.
The combination of El Niño and exceptional Atlantic warmth this year is expected to have significant impact on weather patterns and temperatures across the globe.
The review outlines key perils which need to be monitored as well as explores the reasons why those natural catastrophes turned into disasters, going beyond the severity of the event, and incorporating insights into exposure and vulnerabilities of the regions affected. The report also delves into the science behind those events and provides insights on what to watch for in the second half of the year.
Key findings include:
Sam Liu, Head of Renewable Energy, Asia at WTW said: “Understanding the factors that contribute to the variability in extreme weather is crucial for the industry to be better prepared to explore and implement mitigating solutions to ensure a continuous, cost-effective and reliable supply of power generation with the aim to minimise the disruption to the end consumers. Developers must carefully plan and factor the various worst-case scenarios into their risk model to ensure new projects are commercially viable going forward. There are also innovative insurance tools available such as parametric solutions that can provide revenue protection caused by low output due to extreme weather patterns.”
Helene Galy, Managing Director of the WTW Research Network, said “Our direct links and close collaboration with the scientific community through the WTW Research Network enables us to provide deeper insights into key natural catastrophes as well as lessons learned. When quantifying natural catastrophe risks, it is crucial to incorporate in-depth scientific analysis in our modelling. As we are seeing with the current wildfires and extreme weather across Europe, APAC and North America, the business impact of these disasters means it is crucial that risk managers understand their potential consequences, as well as learn lessons from previous events and the value and limits of seasonal forecasting. We are delighted to be introducing this latest bi-annual scientific review to help our clients understand and mitigate natural catastrophe risks.”
More on the report can be found here.
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