Australia’s first National Climate Risk Assessment doesn’t just describe hotter days or bigger storms. It maps how climate change will strain the infrastructure networks that keep the country running – energy, transport, supply chains, telecommunications, water, and housing.

By 2050, the climate risk to this system will climb from low–moderate today to high–very high, with severe and prolonged disruptions forecast for energy, transport, and supply chains expected as conditions move beyond the design limits of existing assets.

For business, this is more than an infrastructure story. It's a story about energy resilience and pricing, because when infrastructure fails, energy becomes scarce and costly.

What The Stats Mean For Energy Resilience

• Heatwaves push systems past their limits. At +3°C warming, Australia may face up to 14 additional severe or extreme heatwave days per year. Under these conditions, networks are more likely to exceed safe operating levels, forcing operators to curtail load. That could mean outages just as demand peaks, testing grid stability when it is needed most.
  
• Megafires and floods cause cascading failures. The risk of megafires in eastern and southern Australia is projected to increase significantly, which could damage or destroy energy assets. Flooding is also expected to become more intense, potentially leading to large-scale and prolonged outages that extend well beyond the immediate hazard zone. These kinds of events would inflate repair costs and add to market volatility.
  
• Droughts reduce dispatchable capacity. Projections suggest drought could extend to up to 89 months per decade under higher warming. This would put schemes like Snowy Hydro and Hydro Tasmania at risk, while inland coal plants in QLD and NSW that depend on dams for cooling could also be constrained. Reduced generation in these scenarios would limit flexibility and increase the risk of shortfalls.
  
• Supply chain disruption compounds risk. Events like Tropical Cyclone Jasper, which blocked 150,000 tonnes of freight worth $39m, provide a glimpse of what could become more common. By 2090, disruptions of this kind are projected to double or triple in impact, delaying delivery of essential equipment like transformers, batteries, and turbines, prolonging outages and inflating costs.

These risks are not abstract. They are vulnerabilities that could undermine the reliability of Australia’s energy system. For business, that translates into greater volatility and potential cost pressures in contracts and budgets if resilience is not built into the system.

Policy Contradictions: Where Energy Risk is Being Ignored

What makes the National Climate Risk Assessment challenging to read is not just the risks it sets out, but the gap between that evidence and many of today’s decisions.

The report is clear that most energy infrastructure was not built to withstand future extremes. Yet approvals continue for major projects in coastal LNG hubs like Darwin and Gladstone, coal corridors exposed to flooding in the Hunter Valley, and transmission expansions cutting through fire-prone regions of Victoria and New South Wales.

Governments have acknowledged fragile supply chains, but funding has often gone to short-term energy bill relief and new gas capacity schemes rather than long-term resilience. And while the NCRA highlights the rising likelihood of prolonged outages, new fossil projects such as the Barossa offshore gas development in the NT and the Winchester South coal mine in Queensland have recently been approved.

But the NCRA also creates an opportunity. For the first time, there is a national evidence base that ties climate risk directly to infrastructure and energy security. That gives policymakers, regulators and businesses a clearer map of where investment should shift, including hardened networks, diversified supply chains, storage and microgrids.

The opportunity now is for government, investors and business to use this report as a pivot point. We need to stop managing energy risk reactively and instead plan for resilience before the shocks arrive.

Adaptation Pathways For Energy Management

The National Climate Risk Assessment is not without proposed pathways to reduce risk. Rather than leaving businesses and policymakers with a list of hazards, it points to practical measures that could strengthen infrastructure, improve resilience, and lessen the impact of future disruptions on energy systems and the businesses that rely on them:

• Strengthen critical networks so transmission lines, substations, and other assets can withstand extreme heat, storms, and floods, extending their operating life.
  
• Expand storage and microgrids that provide backup capacity and can operate independently of the national grid during major disruptions.
  
• Lift design standards so new energy infrastructure is built for the climate ahead, not the climate of the past.
  
• Build resilience into freight and transport to shorten recovery times when supply chains are disrupted, keeping critical equipment and goods moving.
  
• Protect natural buffers such as mangroves and tidal wetlands, which already shield an estimated $1.7 billion in coastal infrastructure from storm and cyclone damage

For business, adaptation means more than watching policy. It means factoring these risks into energy procurement and management strategies today, so that volatility tomorrow does not undermine contracts or budgets.

If you’d like to explore what this means for your organisation, speak to our energy consultants about building resilience into your energy strategy.

More power to you.