In recent days, power plants across India have been operating at full capacity to meet peak power demands, driven largely by extreme heat. The potential consequences of climate change have also raised concerns about the functioning of these power plants.
A recent study titled “Differentiated impacts of climate physical risks on the Indian power sector,” published in the journal iScience, highlights how climate-induced flooding could have severe repercussions for the nation’s electricity infrastructure. The study underscores that enhancing protection against flooding could significantly mitigate the risk of power plant shutdowns.
India ranks 13th globally in flood exposure, with 80 percent of its districts at risk from climate-related disasters. Traditional predictive models tend to overlook risks that may seem unlikely but can have disastrous effects, known as “tail risks” (such as extreme floods that occur once in a century). The study analyzed 424 power plants, representing over 90 percent of India’s power capacity across various fuel sources, including coal, gas, nuclear, oil, and bioenergy.
While many researchers focus on transition risks—such as the costs associated with shifting from fossil fuels to renewable energy—the study emphasizes that physical climate risks are increasing, particularly as the transition to clean energy faces delays.
The authors simulated severe flooding scenarios over a 25-year period under a high-emissions climate future. They found that without any protective measures against flooding, average losses in the power sector could exceed 19 percent of asset value, with worst-case tail risks potentially erasing more than 24 percent. Conversely, implementing protections designed to withstand a 100-year flood could reduce average losses to below 1 percent and tail risks to under 2 percent.
Location Matters
Interestingly, even if a power plant remains operational during a flood, its utilization rate can significantly decline; factors such as wet stored coal or delayed fuel deliveries negatively impact efficiency. For example, the Bongaigaon power plant, situated in a flood-prone area, manages to remain unaffected thanks to its favorable local topography and water flow patterns.
Regional disparities also exist. Coastal states and those with heavy river basins face higher risks. For instance, Kerala is estimated to incur losses of about 58 percent, while Arunachal Pradesh and Nagaland each face losses of 55 percent. Other states like Puducherry (49 percent) and Himachal Pradesh (48 percent) follow closely. In regions affected by melting glaciers, states such as Gujarat (45 percent), Odisha (41 percent), Karnataka (40 percent), and Andhra Pradesh (35 percent) are similarly vulnerable.
Conversely, drier areas further inland, including Rajasthan, Delhi, and Haryana, are associated with the lowest tail risks, remaining under 17 percent.
The risk variations also depend on the type of fuel used for power generation. Coal and gas power plants, typically located near water for cooling, are particularly exposed; however, building 100-year flood walls can eliminate up to 97 percent of the risk. Nuclear power plants, often situated in exposed coastal cooling zones, are also vulnerable to extreme floods, yet are generally built to stringent standards, significantly reducing remaining risks. Bioenergy and oil plants face an average risk of 4.16 percent, even with flood walls, largely because they are located in districts lacking substantial flood protection.
Insurance Cover
The authors examined current flood protection measures and discovered significant disparities in preparedness. Existing medium to high levels of protection are concentrated in historically flood-prone coastal regions, the Northeast, and central India, where major plants are typically situated. In contrast, northern districts exhibit alarmingly low infrastructure protection.
The study further assessed the availability of insurance but characterized it as an adjunct to core defensive measures rather than a standalone solution. Without flood walls, comprehensive insurance would marginally lower tail risk from 24 percent to 22 percent while failing to avert physical damage or operational disruptions. However, with adequate protective barriers in place, insurance costs could decrease due to a tail risk reduction to roughly 1.2 percent.
Notably, simple grid protection does not require extensive funding. The authors advocate that planning for defenses against 25-year flood events can significantly shift the risk curves, reducing industry-wide worst-case scenarios from 24 percent to roughly 4.8 percent.
Published on May 25, 2026.
