How Extreme Weather Events Can Cause Energy Prices to Skyrocket
“How can extreme weather events cause energy prices to go out of whack?”
When the weather gets too hot or too cold, people will turn on HVAC systems to compensate. This will cause greater demand on the electricity system, which in turn will lead to more constraints and therefore higher costs for everyone. This is How Extreme Weather Events Can Cause Energy Prices to Skyrocket. The advent of climate change will only exacerbate this, as extreme weather events will become far more frequent. So in the end, it will pay in the long term to upgrade critical infrastructure systems to more resilient standards.
Image credit Bigerna, S. (2018). Estimating temperature effects on the Italian electricity market. Energy Policy, 118, 257-269.