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Climate Change Fuels Soaring Electricity Bills
8 Jan
Summary
- Extreme heat significantly increases global electricity demand, especially for cooling.
- Higher demand forces utilities to use expensive fossil fuel 'peaker' plants.
- Infrastructure damage from extreme weather also raises electricity costs.
Climate change is increasingly manifesting as higher electricity bills globally. Record heatwaves in 2025 across Europe, China, the US, and India caused significant surges in electricity demand, primarily driven by air conditioning use. This increased demand stressed energy systems, with peak power prices in some European regions exceeding €400 per MWh during heatwaves.
The rising cooling load is a global trend, with extreme heat doubling electricity demand growth in peak months in some markets. In India, heatwaves caused a substantial surge in electricity demand, creating a 'heat-power trap.' This situation forces utilities to activate expensive 'peaker' plants, often fueled by fossil fuels, to meet demand spikes, leading to higher costs passed on to consumers.
Beyond demand, climate hazards like heatwaves, wildfires, and floods damage energy infrastructure, necessitating costly repairs and resilience upgrades. These expenses also contribute to rising electricity prices. As the planet warms, electricity becomes more essential but also more expensive, highlighting the urgent need for cleaner energy sources and efficient systems.
