German re-insurance company Munich Re has presented a first estimate of the damage caused by this year’s floods in Central Europe. For Germany, disaster costs may be the highest ever recorded in the country’s history. Consistent with the Munich Re’s research into extreme weather events and climate change. Meanwhile, the force of water is being put to good use in in Bhutan, home to meditating monks and Himalayan nomads. The sleepy, happy kingdom has set its sights on becoming an unlikely energy powerhouse thanks to its abundant winding rivers. Read More

Munich Re reports:

Prof. Peter Höppe, Head of Munich Re’s Geo Risks Research unit, noted: “It is evident that days with weather conditions that lead to such flooding are becoming more frequent and that such weather systems tend to remain stationary for longer. With this higher persistence of weather patterns, the potential for heavy and long-lasting precipitation within a trough situation, for example, increases. The counterpart to this are stationary high-pressure systems which in summer increase the risk of heatwaves and periods of drought.”

“Debate in climate research is currently focusing on what the causes of such changes in weather patterns could be and what role climate change might play in this. But it is naturally not possible to explain single events on this basis”, Höppe added.

Munich Re has been one of the most vocal proponents of climate change and has been researching extreme weather events and the Climate change connection for many years. Here’s what was said in a Munich Re report in 2008:

Climate change is one of the greatest risks facing mankind. In recent years, the insurance industry – and Munich Re in particular – has been instrumental in ensuring that this message is received loud and clear by politicians, industry, and society as a whole. Now we are going one step further and are turning our knowledge into even more action – with the aid of an all-embracing strategic approach – in the areas of “risk management”, “product development”, and “capital market management”.

Over the past thirty years and more, we have put much effort into investigating climate change. Our high-quality data provides strong evidence that the effects of climate change are already to be seen and that adaptation measures need to be taken without delay.

Source: www.munichre.com

Reported by DW, Reuters, AFP ( 8 July 2013):

Insurer Munich Re: ‘German floods costliest natural disaster ever’

German re-insurance company Munich Re has presented a first estimate of the damage caused by this year’s floods in Central Europe. For Germany, disaster costs may be the highest ever recorded in the country’s history.

Recent floods in Central Europe might have caused economic losses to the tune of 12 billion euros ($15.4 billion), surpassing the costs of the previous flooding in Europe from 2002, German re-insurance company Munich Re said Tuesday.

For Germany, a final cost estimate had yet to be made, Peter Höppe, head of Munich Re’s Georisk Department, told German daily newspaper “Süddeutsche Zeitung.” But it was well possible that the floods were the most expensive natural disaster in German history, he said.

Munich Re, which is the world’s biggest reinsurer, also said that out of the total 12-billion-euros losses across Europe, about 3 billion euros were covered by insurance companies.

The figure is slightly lower than the 3.5 billion euros in damage claims facing insurance companies according to a recent estimate by Swiss reinsurer Swiss Re.

In the past two months, emergency workers, soldiers and volunteers desperately sought to shore up flood defenses along the Danube and Elbe rivers as the high waters moved downstream. Germany was among those countries worst hit by the floods.

Last week, German insurance trade lobby group GDV estimated that the country’s insurance companies could face damage claims of about 2 billion euros, slightly ahead of the 1.8-billion-euros cost seen in the Elbe floods about a decade ago.

Europe’s biggest insurer, Allianz, said it had penciled in claims of 500 million euros from the floods in Europe, before passing on some of the costs to reinsurers.

Re-insurance companies such as Munich Re and Swiss Re help the insurance industry to cover the cost of major damage claims like hurricanes, earthquakes and floods.

Source: www.dw.de

Agence France-Presse (10 July  2013):

Bhutan banks on ‘white gold’ hydropower

Home to meditating monks and Himalayan nomads, the sleepy kingdom of Bhutan has set its sights on becoming an unlikely energy powerhouse thanks to its abundant winding rivers.

Hydropower plants have already harnessed the country’s water flows to light up nearly every Bhutanese home, generating electricity that is sent to remote villages by cables strung through rugged mountain terrain.

It is a rapid transformation for the long isolated nation, where less than a quarter of households had electricity in 1999 — the same year Bhutan became the last country to introduce television.

But the kingdom now has much greater ambitions for renewable hydropower — already its biggest export — which it hopes will provide more than half of its gross domestic product by the end of the decade.

“It is the white gold for Bhutan today,” said Chhewang Rinzin, managing director of state-owned Druk Green Power Corporation, which runs the country’s hydropower sector.

Bhutan’s first megaproject, opened in the southwestern Chukha district in the 1980s, is now one of four major plants which between them have almost 1,500 megawatt capacity — at peak output roughly equivalent to a large nuclear power station, and only five percent of Bhutan’s hydropower potential.

Already going far beyond domestic needs in summer months, when monsoon rains fill up the rivers, most of the electric power is sold to India, Bhutan’s giant energy-hungry neighbour.

In cooperation with the Indian government, and funded by its grants and loans, the kingdom is now aiming to reach capacity of 10,000 megawatts by 2020 through the building of 10 new plants.

In contrast, politically deadlocked and once war-wracked Nepal has just 700 megawatts of installed capacity, despite being among the top potential hydropower producers in the world according to the World Bank.

“India we see as a market that cannot be satisfied,” Rinzin said of the demand for Bhutan’s natural resource, which is driving economic growth estimated by the Asian Development Bank at 8.6 percent this year.

While hydropower is hailed as the country’s ticket to self-sufficiency after years of depending on donors, there are reservations about the speed and scale of its development while other sectors of the economy lag behind.

One of the first new plants being built, the Punatsangchhu I project, is projected to cost about two billion dollars — more than Bhutan’s total gross domestic product. And there are nine more projects to complete.

“While no one disputes that harnessing hydropower energy is the way to go, there is concern that Bhutan is trying to do too much, too soon,” said an April editorial in the national Kuensel newspaper, titled “Drowning in hydropower”.

At the Chukha plant, colourful murals depicting the Buddha’s life-cycle contrast with the whirring machinery but hint at the country’s unique development model of pursuing “Gross National Happiness” (GNH).

Retaining Bhutan’s Buddhist cultural identity and protecting the environment are key parts of the GNH philosophy, which aims to balance the financial advancement of the nation with spiritual well-being.

The existing hydropower schemes are all “run of the river” sorts that depend on natural water supplies rather than large reservoirs, designed to cause less disruption to their surroundings.

But three reservoir dams have been proposed among the upcoming projects to ensure plentiful water in the rain-free and freezing winter months, when power output currently drops by about three-quarters.

Rinzin says Bhutan’s steep and sparsely-populated valleys will suffer much less impact than areas affected by big Indian or Chinese reservoirs — the number of households displaced is in the hundreds rather than thousands.

But Samir Mehta, South Asia programme director at US-based watchdog International Rivers, expressed concern at a lack of transparency around the proposals and their impact. “The level of public engagement is not known,” he said.

He warned that hydropower plants also face serious threats from climate change, given Bhutan’s susceptibility to floods from lakes formed high in the mountains by melting glaciers.

In the capital Thimphu, people have other concerns on their mind about hydropower’s rise, sometimes described as “jobless growth”.

Despite its dominance in Bhutan, Druk Green has a staff of only 1,800, expected to rise to no more than 6,000, in a country where unemployment is a growing worry among its youthful population of 736,000.

The construction phase is more labour-intensive, but only 10 to 15 percent of these jobs are going to the Bhutanese by Rinzin’s calculation, as most of the building work is carried out and overseen by Indians.

“It’s money in and money out,” said Tenzing Lamsang, editor of The Bhutanese newspaper. “Your own companies are not making the money that they should.”

The kingdom, which is holding its second parliamentary elections after shifting to democracy in 2008, is already hugely dependent on India for imports and soaring demand led it to run out of Indian rupee supplies last year.

Many think the flurry in hydropower development, and subsequent demand for costly imported equipment and machinery, exacerbated the crisis.

While he believes in hydropower’s long-term benefits for Bhutan, Lamsang says the financial and environmental concerns show that it should not be relied upon to the cost of other industries.

“The danger here is that we put all our eggs in one basket. If the basket does fall or something happens to the basket, then we’re in for a lot of trouble.”

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