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Prediction: Climate change will impact solar and wind projects in Southeast Asia and increase claims

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Prediction

Southeast Asia has significant potential to develop solar photovoltaic (PV) and wind projects, and there continues to be scope for them to comprise a greater share of the region's electricity generation. However, climate change has the potential to hamper such developments due to the increased threat of extreme heavy rainfall, deadly heatwaves and typhoons/cyclones (such as Yagi, which devastated parts of Vietnam, Thailand, Myanmar and Lao earlier this year). With almost 50% of installed solar PV and hydropower projects, over 40% of wind turbines and more than 20% of the grid infrastructure situated in cyclone/typhoon-prone areas across the region, the damage caused by extreme weather is likely to place an increasing strain on the ability to produce renewable electricity. As a result, we anticipate an increase in claims for property damage and delays to the construction of new projects, as well as financial losses relating to system failures and power outages.