# Extreme Climate Events and Energy Market Vulnerability: A Systematic Global Review
## 4 Impacts and Adaptation Strategies to Natural Events: A Review of Global Studies
### Latin America  
Extreme weather events are changing energy markets in Latin America, generating supply imbalances and rising prices. For example, climate events such as the El Nino phenomenon can cause hydroelectric generation in some countries, such as Argentina, Brazil, Mexico, and Venezuela, to be reduced by up to 50%, resulting in a greater risk of blackouts. Furthermore, they can generate excessive increases in electricity prices [60]. This high volatility in prices can be reflected in industrial production costs, as was the case in Peru and Chile, where energy prices are the main problem for industries and make them less competitive in international markets [61]. For this reason, countries are beginning to diversify their energy matrices by incorporating renewable sources such as solar or wind, which allow for a reduction of up to 0.2 GWh per MW of energy deficit in critical drought months, in addition to giving greater resilience to the electrical infrastructure to guarantee stable access to electricity and combat extreme events [62]. Extreme weather events are significantly transforming Mexico's energy system, disrupting not only production but also the stability of energy markets. For example, an atmospheric analysis of wind energy has confirmed that wind patterns associated with climate phenomena such as El Nino can increase summer wind speeds in regions such as Chiapas and Oaxaca, while La Nina weeks are affected by lower speeds, significantly impacting wind energy production in southern Mexico [63]. At the same time, in the Yucatan Peninsula, communities have reported a clear shift in the timing of rainfall, but especially an intensification of droughts. This has led to increased energy use linked to irrigation and crop conservation, which has intensified pressure on local grids [64]. At the \begin{table}
\begin{tabular}{p{113.8 pt} p{113.8 pt} p{113.8 pt}} \hline
**Event** & **Key Impacts** & **Proposed Solutions** & **References** \\ \hline Wind Power Variability During Storms & Fluctuations in wind power output disrupt balancing generators, reducing their efficiency and increasing emissions temporarily. & Promote wind power integration as it offsets high-carbon emissions from fossil-fueled generators despite variability. & [58] \\ \hline Seasonal Renewable Energy Deficits (“R Renewable Droughts”) & Low renewable generation in winter (May–August) risks load loss in the National Electricity Market (NEM), especially in southern Australia. & Develop energy storage systems for short-term demand, integrate offshore wind energy, and maintain dispatchable thermal generation for cost-effective backup. & [59] \\ \hline \end{tabular}
\end{table} 
Table 6: Analysis of the extreme weather events that occurred in Australia and classified in terms of their impact on the energy systems and mitigation strategies. Source: own elaboration from [56; 57]. same time, a recent analysis shows that extreme weather events indirectly affect energy costs, putting pressure on harvests and distribution. Under extreme weather conditions, a 1% positive impact on the country's gross domestic product (GDP) generates an additional 0.90% increase in the 12-month cumulative inflation [65]. In the face of these risks, Mexico is developing adaptation strategies, such as the geographic diversification of wind farms to avoid simultaneous production losses, the promotion of resilient agricultural systems in rural areas, and the explicit incorporation of climate risks into the design of economic and energy policies. Building on the global perspective, the focus now shifts to Colombia. A climate change impact analysis on hydropower generation has been conducted through a multi-model approach by [PERSON] et al. [66]. This study applies partial and general equilibrium models (GCAM, TIAM-ECN, Phoenix, and MEG4C) to define adaptation pathways for the energy sector under two scenarios of greenhouse gas concentration, RCP4.5 and RCP8.5.