Energy

Key messages

• Climate change affects the energy sector in terms of energy production (both non-renewable and renewable) and supply conditions. Risks include reduced efficiency rates of all types of power plants as well as damages to energy infrastructure caused by extreme events. Making the energy sector climate resilient is key for the EU climate action, primarily because of its role in mitigation as one of the main sources of anthropogenic GHG emissions.
• The ‘European Climate Law’ and the ‘Fit for 55’ package will result to spur a substantial decarbonization of the EU energy sector. Although no specific actions have yet been proposed in the new EU Adaptation Strategy, those climate policies are likely to have important consequences on the adaptation options of the sector. Based on the information and guidance in the EU Adaptation Strategy and the Cohesion Policy documents, Europe intends to specifically invest in climate resilient infrastructure, in particular to set up renewable energy infrastructure.
• While modelling studies to assess the impact of climate change on the energy sector were provided by the Joint Research Centre, and adaptation opportunities for the European energy system, and climate resilience in Europe’s energy system now and in the future, where analysed by the EEA, several EU funded research and innovation projects propose solutions to mainstream adaptation into this key EU policy sector.

Impacts, vulnerabilities and risks

Climate change affects the energy system in multiple ways, ranging from changes in seasonal and annual heating and cooling demands to risks and opportunities on energy production and distribution. Risks include decreases in power plant efficiency rates, limitations of cooling water and water for hydropower plants. In addition, climate change can damage energy infrastructures because of extreme events including coastal and inland floods, storms and wildfires.

The European Climate Risk Assessment identified the risk of energy disruption due to heat and drought affecting electricity supply and demand as the most urgent to address, with southern Europe being a hotspot region. The assessment also concludes that risks to energy supply can cascade to all societal sectors and activities, threatening security, economic well-being, and human health.

The energy sector is not only prone to important climate-related vulnerabilities: it is key for the EU climate action, primarily because of its role in mitigation as one of the main sources of anthropogenic greenhouse gas emissions. Given this dual role, mainstreaming adaption in this sector appears of paramount relevance and this is duly considered in the 2021 EU Adaptation Strategy.

Policy framework

The strategic directions of the European Commission for the energy sector are set in the 2030 Framework for climate and energy, and in the Energy Union. In June 2021, the Council of the European Union adopted the new European climate law. It sets into legislation the objective of a climate-neutral European Union by 2050 thereby making the final goal a legal binding requirement for the first time. The EU  'Fit for 55' package includes policy proposals that define the pathway for the EU's ambition to fulfil its contribution under the Paris Agreement. It is the Commission's proposal for the legislative tools to deliver on the targets agreed in the European Climate Law. It also proposes solutions for the energy sector which needs to be implemented in a climate resilient way.

The European Commission presented on 18 May 2022 RepowerEU, a plan to minimize Europe’s dependence from Russian fossil fuels that also helps keep the EU on track to carbon neutrality. The plan is built on three pillars: energy conservation; diversification of energy supplies; and rapid substitution of fossil fuels across all sectors by speeding up the clean energy transition. The plan foresees investing substantially in the security of gas supply and electricity grids and in the setting up an EU-wide hydrogen backbone. The plan has implications for adaptation in the EU energy sector, as implementing the three pillars could reduce the risks posed by climate impacts both in terms of energy infrastructures outside the EU and in terms of the overall exposure to climate risk of the EU energy sector.

The 2020 European Green Deal will result in a substantial decarbonisation of the EU energy sector. While this is likely to have important consequences on the adaptation options of the sector, the new EU Strategy on Adaptation to Climate Change does not have a specific section on the energy sector but does include several relevant recommendations. The focus on droughts, for instance, includes water management adaptation actions for the operation of hydropower and thermal powerplants. The Adaptation Strategy recommends to integrate the adaptation strategy within the monitoring procedures required by the Governance of the Energy Union and Climate Action; and stresses the role of water efficiency within the regulations for energy labelling and energy generation.

The energy sector is indirectly relevant for other actions in the Strategy. It must be taken into account when dealing with the integration with other European Green Deal initiatives, notably the Renovation Wave, which deals extensively with energy use in the built environment, the Circular Economy and Zero Pollution Action Plans, and the Smart and Sustainable Mobility strategy, due to the role played by energy in manufacturing and transport. Similarly, the need for climate-proofing new investments mentioned in the Strategy applies to all energy infrastructures.

Finally, climate change impacts across borders mentioned in the Strategy matters for the functioning of international energy markets and energy supplies to the EU. Port infrastructure disruption matters for the transportation of energy fuels, climate-change-induced conflicts matter for energy security, and the changes in the polar regions induced by climate change matter in terms of new supply routes, and permafrost thawing that may threaten fossil fuel extraction sites and pipelines in the Artic.

Implications for adaptation arising from the announced review of the regulatory framework for energy infrastructure, including the TEN-E Regulation to ensure consistency with the climate neutrality objective, can be expected.

As to the regulation framework for the vulnerability of critical energy infrastructures to major threats, the 2008 European Critical Infrastructure (ECI) Directive required EU Member States to protect infrastructure “of vital societal functions” against all hazards and threats but did not mention specifically those caused by climate change. To account for increasing connectivity, interdependency, and cross-border operation of critical infrastructure, the Critical Entities Resilience Directive (CER Directive) replaced in early 2023 the ECI Directive. They main rationale for this new Directive is that in a complex and interlinked world, protecting only assets was deemed insufficient to prevent disruption and cascading effects. The CER Directive protects EU’s vital societal functions by strengthening the resilience of critical entities providing essential services. Climate change is explicitly mentioned as a factor that increases the frequency and magnitude of extreme weather events and therefore the physical risk for critical infrastructures, and Member States are required to take adequate measures necessary to “prevent incidents from occurring, duly considering disaster risk reduction and climate adaptation measures”. Energy infrastructures for electricity, district heating and cooling, oil, natural gas and hydrogen are explicitly listed among the targets of prevention measures to be put in place under this Directive.

Improving the knowledge base

The 2024  European Climate Risk Assessment provides a comprehensive assessment of the major climate risks facing Europe today and in the future. It identifies 36 major climate risks that threaten our energy and food security, ecosystems, infrastructure, water resources, financial systems, and people’s health also considering the risk for the energy sector.

The IPCC AR6 WG II report Climate Change 2022: Impacts, Adaptation and Vulnerability covers the vulnerabilities and adaptation options for the energy sector within various chapters. Moreover, the energy systems are one of the four key System Transitions around which the identification of adaptive responses to Representative Key Risks is organised in the report. To tackle the risks posed to key energy infrastructures and networks, the report recommends transitioning energy systems to more sustainable configurations, making them more resilient and increasing the reliability of energy supply and the efficiency of water use in this sector. Diversifying energy sources by increasing the share of renewables and improve demand side management is also seen as useful. Hydropower and thermal generation can accommodate gradual adaptation to moderate (up to 2° C) temperature increases; in the medium and long term, further systemic actions (with mitigation co-benefits) will be needed.

Relevant information on the impacts of climate change on the energy sector at global level has been provided by the International Energy Agency (IEA). Incremental risks of climate change on energy systems for global temperature increase of 1.5ºC and 2ºC have been assessed in the IPCC Special report on global warming of 1.5 °C. The Copernicus Climate Change Service is also launching an operation service for the energy sector to use in their management decisions.

The Joint Research Centre (JRC) has carried modelling studies to assess the impact of climate change on the energy sector. The JRC has also issued in 2023”; a report on “Impacts of climate change on defence-related critical energy infrastructure”, which looks at the implication for the European defence system of the vulnerabilities posed by climate change to energy security in general and to the viability of critical and defence infrastructure in particular, a very relevant issue as climate change is seen as a “threat multiplicator” in an international security perspective.

The EEA published in 2019 the report Adaptation challenges and opportunities for the European energy system, which analyses the needs for climate change adaptation and climate resilience in Europe’s energy system now and in the future.

The Copernicus Climate Change Services (C3S) Energy operational service aims to deliver key information for climate-related indicators relevant to the European energy sector.

Within the EU Seventh Framework Programme for Research and Technology Development (FP7) several research projects that cover the resilience of the energy sector were funded. These include the ToPDAd (Tool-supported Policy Development for Regional Adaptation) project, which provides among others information on impact and vulnerability assessments as well as adaptation strategies for the energy sector, and EUPORIAS, which provides knowledge on future variability of climate to achieve cost-effective solutions for the future operation of the energy grid.

Adaptation to climate change was also one focus of the Horizon 2020 EU funding programme for research and innovation e.g. the resilience of critical infrastructure like smart grids, while the European Program on Critical Infrastructure Protection also includes natural hazards, climate change is not yet part of that program. Methodologies have been developed in order to consider how to use policies on existing infrastructure in Europe in a way that supports the infrastructure resilience. The Horizon 2020 programme was funding projects with regard to the adaptation in the energy sector like RESIN and EU-CIRCLE project. The RESIN project helps cities to come up with robust adaptation strategies on their most critical infrastructure. The EU-Circle project develops a Union-wide framework to support vital infrastructures to be prepared to natural hazards, including climate change. A continuation of Horizon 2020 is the Horizon Europe research and innovation programme for the period 2021–2027, with the total budget of € 95,5 billion.

Other relevant EU funded activities are the European Institute of Innovation and Technology (EIT) Knowledge and Innovation Communities Innoenergy and the Climate-KIC.

Supporting investment and funding

EU funding for adaptation is supported by the Multiannual Financial Framework 2021-2027, which ensures that climate adaptation actions have been integrated into all the major EU spending programmes  Examples are  the LIFE programme; European Agricultural Fund for Rural Development and the European Regional Development Fund.

The European cohesion policy, which provides funds to the Member States to develop new infrastructure projects, such as for instance power grids, encourages the assessment of climate resilience of these projects. Based on the information and guidance in the EU Adaptation Strategy and the Cohesion Policy documents, Europe intends to specifically invest in “a greener, low‑carbon transitioning towards a net zero carbon economy” (Cohesion policy riority 2) and this matters for renewable energy infrastructure

A comprehensive overview can be found on the EU funding of adaptation measures page.