Case Study: Dominion Energy
Greetings Readers, I am eager to provide the first climate risk transfer case study on the Climate Risk Valuation blog! For case studies, I will identify current events (or memorable ones from my 20-year career in this space) that demonstrate how valuing and transferring climate risk can create value and advance sustainable development goals. I will structure case studies following the template shown below. Hopefully you will find these examples relevant and enlightening! --- Institution exposed to climate risk: Dominion Energy's Coastal Virginia Offshore Wind Project (CVOW) Sector: Renewable energy Physical climate risk: wind speed and timing Financial risk: Income statement (variable business cost of goods sold) Problem: Dominion is exposed to unforeseen electricity replacement costs. If the wind speed and resulting electricity generated are below a guaranteed threshold, then the utility must procure replacement energy to meet the guarantee deficit. Furthermo...