Assessing Physical Climate Risks for the European Bank for Reconstruction and Development's Power Generation Project Investment Portfolio

The paper presents a new methodology using machine learning and climate science to assess physical climate risks for power generation portfolios. Pilot testing on the EBRD's thermal and hydro assets indicates that annual generation losses could increase from 0.76 TWh (0.4%) in the baseline period to 7.0 TWh (3.3%) under RCP4.5 and 7.4 TWh (3.5%) under RCP8.5 by 2030. The analysis identifies water stress and rising water temperatures as the primary drivers of loss for thermal assets, while hydro assets are primarily affected by reduced precipitation and upstream water consumption. The study further finds that combined cycle gas turbine (CCGT) plants are more resilient than coal-fired plants, and that once-through cooling systems are the most vulnerable cooling technology.

• By 2030, the EBRD's thermal and hydro power portfolio is projected to experience annual generation losses of 7.0 TWh (3.3%) under the RCP4.5 moderate scenario and 7.4 TWh (3.5%) under the RCP8.5 extreme scenario, compared to 0.76 TWh (0.4%) during the baseline period.
• For thermal assets, the most significant drivers of increased generation losses are intensified water stress and rising water temperatures, followed by air temperature and drought-induced water shortages.
• The EBRD's hydropower portfolio is expected to see an overall reduction in annual generation by 2030—estimated at 222 GWh under RCP4.5 and 148 GWh under RCP8.5—primarily due to increased upstream water consumption and decreased precipitation, although some plants may see surpluses from increased local precipitation.
• Coal-fired power plants are less climate-resilient than combined cycle gas turbine (CCGT) plants; by 2030, coal plants are projected to have generation losses of 1.7% (RCP4.5) and 2.1% (RCP8.5), which is more than double the losses of CCGT plants.
• Once-through cooling systems are the most susceptible to climate-driven efficiency reductions and generation losses compared to recirculating or dry cooling systems.

APA

World Resources Institute (n.d.). Assessing Physical Climate Risks for the European Bank for Reconstruction and Development's Power Generation Project Investment Portfolio. https://www.wri.org/research/assessing-physical-climate-risks-european-bank-power-portfolio

Chicago

World Resources Institute. Assessing Physical Climate Risks for the European Bank for Reconstruction and Development's Power Generation Project Investment Portfolio. n.d. https://www.wri.org/research/assessing-physical-climate-risks-european-bank-power-portfolio.

Wikipedia

{{cite report |author=World Resources Institute |title=Assessing Physical Climate Risks for the European Bank for Reconstruction and Development's Power Generation Project Investment Portfolio |url=https://www.wri.org/research/assessing-physical-climate-risks-european-bank-power-portfolio |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitutendassessing, author = {{World Resources Institute}}, title = {{Assessing Physical Climate Risks for the European Bank for Reconstruction and Development's Power Generation Project Investment Portfolio}}, institution = {World Resources Institute}, url = {https://www.wri.org/research/assessing-physical-climate-risks-european-bank-power-portfolio}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }