About

Extreme weather events due to climate change impose large physical risks to energy systems. For example, heat waves reduce the thermal capacity of transmission lines and cause rapid increases in the use of air conditioning that drives up the demand for electricity. Hurricanes, unexpected snowfalls, and tornados can severely affect distribution systems and leave thousands of people without electricity for extended periods of time. Prolonged droughts can also increase the vulnerability of hydro-based systems— which are very common in Latin America—to power shortages.

The transition towards low-carbon energy systems also presents challenges from an economic and financial point of view. Policies to decarbonize the economy depend on political conditions that are very difficult to predict, but that have a large influence on investment decisions. The integration of large shares of generation from variable and unpredictable resources with zero-marginal cost is also creating concerns about the feasibility of current electricity market designs to support the efficient operation of renewable systems in the future.

To address these issues, we have formed an interdisciplinary team of academics, international collaborators, local research centers, and governmental and non-governmental organizations to develop new mathematical models and computational methods to help the private and public sector to better adapt energy systems and markets to the gross uncertainties and risks that result from climate change.