Zurich Report Identifies Three States with Highest Climate Risk for Renewables
A new portfolio analysis by Zurich Insurance has identified Rajasthan, Gujarat, and Arunachal Pradesh as the states with the highest climate-related risk to India's renewable energy infrastructure. The report emphasizes that prioritizing resilience in these states is critical to safeguarding India's renewable build-out, as they carry the highest absolute Value at Risk (VaR) and the largest share of assets in critical risk categories by 2030.
Rajasthan: Highest Absolute Value at Risk at USD 16.4 Billion
Rajasthan, India's largest renewable energy generating state by a considerable margin, holds 272 assessed sites spanning 82,149 MW of planned capacity. According to the report, it carries the highest absolute Value at Risk in the portfolio at USD 16.4 billion. Solar dominates the mix, making Rajasthan central to India's 500 GW non-fossil target, with 85% of assets in categories 4 or 5—the highest risk categories. The report notes that temperatures regularly exceed 50°C in the state, simultaneously stressing solar panels and the balance-of-plant they depend on.
Gujarat: Complex Hazard Profile with Cyclone and Storm Surge Risks
Gujarat has 172 sites and 47,530 MW across solar and wind, with 90% of assets in categories 4 or 5 and a VaR of USD 8.6 billion. Zurich highlighted that the hazard profile is particularly complex: in addition to the hail and tornado exposure it shares with Rajasthan, Gujarat's long coastline introduces cyclone and storm surge risks that affect coastal solar and wind assets. Demand pressure is rising from an expanding EV manufacturing base and growing green hydrogen ambitions.
Arunachal Pradesh: Highest Proportion of High-Risk Assets at 96%
Arunachal Pradesh presents the most striking risk profile in the portfolio. Just 30 assessed sites carry a VaR of USD 13.1 billion, and 96% of those assets sit in the critical risk categories 4 and 5. The portfolio is almost entirely hydropower, concentrated in the eastern Himalayan foothills where high precipitation, slope instability, seismic activity, and flood risk create a severe and compound hazard environment.
Other States Show Varied Exposure Levels
Karnataka has the lowest critical-risk rate at just 5%, while Uttarakhand has 94% of assets in the highest risk categories due to extremes in Himalayan precipitation—flood risk, slope instability, and changing hydrology. Uttar Pradesh has 78% of assets in the highest risk categories, with flood exposure from the Ganga river system and extreme heat events as key hazards.
Zurich Recommends Multi-Hazard Stress Testing and Climate Screening
Zurich stated that multi-hazard stress-testing of the most exposed projects helps quantify the difference between the Value at Risk and the losses with mitigation actions. The report stressed that forward-looking climate screening should be a standard requirement in site selection, project approval, and permitting.
