A Review on the Impact of Climate Change on Electricity Market

Abstract

The impact of climate change on the electricity market presents future challenges in the organizational development of electrical energy applications. In a broader sense, it represents a new research field opportunity, enhancing the efficient planning and operation of renewable and non-renewable power plants. In the future, it could serve as a guideline in mitigating diverse impacts caused by catastrophic climate changes. This paper discusses the effect of climate change on electricity demand and supply scenarios. It has been pointed out in various reports, news, and awareness campaigns that higher temperatures are expected to increase electricity demand for cooling while decreasing the demand for heating. This shift in demand patterns poses challenges for electricity supply, as renewable energy sources may struggle to meet peak demands during certain seasons. Additionally, pressure on non-renewable resources increases due to fluctuating demand. Recently, progressive studies on this topic have significantly extended knowledge, even mandating an improved understanding of the volatility of climate change on the electricity market. Further research is necessary in terms of filling gaps, common policy regulatory frameworks, and ensuring the sustainability of the electricity market.