On July 5, 2015, the first of six thermal power generation units at the Parli Thermal Power Station in Maharashtra, India shut down. Unable to draw enough water from the nearby Majalgaon dam, which had nearly run dry, the coal-powered unit was unable to run its cooling system and was forced to halt electricity production. This was just the start, as each of the five additional units subsequently shut down as well. Between July 2015 and December 2016, Parli stopped generating electricity entirely for 226 days solely due to water shortages, and during the days it wasn’t entirely shut down, it was largely paralyzed.

Imagine this picture replicated in other parts of India and around the world. Recent research is beginning to link climate change to drought, which suggests that risks to water availability will likely get worse.

That water shortages can prove costly to energy companies is old news. What is less understood is how much water shortages can impact utilities’ bottom lines.

In our new study, Financial Implications of Parched Power, we find that water shortage-induced outages to thermal power generation didn’t just turn off customers’ lights, they also caused occasional and sometimes major financial impacts to thermal power companies. This finding can have important implications for both thermal power companies and their investors. Tiếp tục đọc “More Water Shortages Mean Energy Investors Need New Ways to Manage Drought Risk” →