Event-based assessment of physical climate risk for energy infrastructure using CLIMADA and synthetic tropical cyclone hazards

Disclosure of physical climate risks is increasingly emphasized by investors, regulators, and energy system stakeholders, but current reporting remains limited in transparency and comparability. This challenge is particularly evident for renewable energy companies with geographically dispersed assets exposed to extreme weather events, as electricity generation is inherently dependent on climatic conditions. Although recent regulatory initiatives such as IFRS S2 require the disclosure of climate-related physical risks, they offer limited guidance on how climate hazards can be translated into standardized, quantitative risk metrics at the asset and portfolio levels.

In this study, we propose a standardized, event-based probabilistic framework to assess physical climate risks for renewable energy infrastructure. The framework integrates synthetic tropical cyclone hazard scenarios with simplified representations of energy assets to quantify direct physical impacts and aggregated portfolio-level risk indicators. To illustrate the applicability of the approach, we construct a representation of offshore wind assets inspired by publicly available information from a global renewable energy operator.

By combining event-based hazard modeling with spatially explicit asset exposure, the framework captures the effects of spatial diversification, correlated hazards, and risk aggregation across energy portfolios. The results show how extreme weather events can affect multiple energy assets, shaping both site-level vulnerability and firm-level risk exposure. Overall, the proposed framework highlights how transparent, standardized, event-based climate risk metrics can support investment decision-making, energy system resilience planning, and the development of climate adaptation strategies and cost–benefit analyses in the renewable energy sector.

In future work, the framework can be extended to jointly consider climate-related losses and revenue from energy generation, as well as the identification of new potential sites, enabling assessments that capture not only physical damage but also impacts on operational performance.