Special thanks to SPHEAR`s 2009-2010 Industry Partners Citadel

Special thanks to SPHEAR`s 2009-2010 Industry Partners Citadel

Prophet for Profit
Weather, Energy and Uncertainty
Prophet for Profit
 Impacts and Aspects of Weather for Energy Decision
Making
 Decision Makers and Decision Making Process
 What We Know
 What We Think We Know
 What We Know We Don’t Know
 Information Sources and Uncertainty
 The Overlooked Forecast
Impacts and Aspects
Energy Sector
Willis Carrier's Psychrometric Chart
“Good temperature is the
one you don’t notice at all”
Weather Drives Energy
Demand
Weather Drives Energy
Demand
Decision Making
Traders, Grid Operators, Transportation Planners
..it happens…
"This story is based on actual events. In
certain cases incidents, characters and
timelines have been changed for
dramatic purposes. Certain characters
may be composites, or entirely
fictitious."
YO! Weather-guy!
Price
Day 33
Day 32
Day 31
Day 30
Day 29
Day 28
Day 27
Day 26
Day 25
Day 24
Day 23
Day 22
Day 21
Day 20
Day 19
Day 18
Day 17
Day 16
Day 15
Day 14
Day 13
Day 12
Day 11
Day 10
Day 9
Day 8
Day 7
Day 6
Day 5
Day 4
Day 3
Day 2
Day 1
Respected Forecaster indicates a
weakening El Nino for the heart of the
upcoming winter. Based on a “Weak El
Nino” picture – the forecast calls for cold
temperatures in the heart of the Natural
Gas sensitive region of the U.S. Forecast
analogs indicate that the winter of 200x
could be one of the coldest winters in a halfcentury.
Day 33
Day 32
Day 31
Day 30
Day 29
Day 28
Day 27
Day 26
Day 25
Day 24
Day 23
Day 22
Day 21
Day 20
Day 19
Day 18
Day 17
Day 16
Day 15
Day 14
Day 13
Day 12
Day 11
Day 10
Day 9
Day 8
Day 7
Day 6
Day 5
Day 4
Day 3
Day 2
Day 1
Uh… Weather-guy!?!
Price
ENSO strengthens and observed
temperatures begin the winter at record
warm levels.
Day 33
Day 32
Day 31
Day 30
Day 29
Day 28
Day 27
Day 26
Day 25
Day 24
Day 23
Day 22
Day 21
Day 20
Day 19
Day 18
Day 17
Day 16
Day 15
Day 14
Day 13
Day 12
Day 11
Day 10
Day 9
Day 8
Day 7
Day 6
Day 5
Day 4
Day 3
Day 2
Day 1
What Now?!!?
Price
“The Heart” of
winter begins
Model A vs. Model B
Model Data + Other Data
MJO Expected Phase
Strong ENSO Picture
Analyze all the data – Make a Call
• I’ve seen this before!!!
• Model B performs better!
• Analogs favor warmth!!
• ENSO is too big a player!!
• MJO won’t fully develop!
• Don’t forget PDO…
• My gut tells me….
It’s the special sauce!!
• I’ve seen this before!!!
• Model B performs better!
• Analogs favor warmth!!
• ENSO is too big a player!!
• MJO won’t fully develop!
• Don’t forget PDO…
• My gut tells me….
Prophet dooms Profits
Prophet: [prof-it]-noun: person who foretells or predicts what is to
come: a weather prophet; prophets of doom.
Profit: [prof-it]–noun: pecuniary gain resulting from the employment
of capital in any transaction
What We (Think We) Know
Energy Sector
Short Range Forecasting
Clusters
Medium Range Forecasting
Qualitative
Medium Range
Forecasting
Deterministic
Extremes Drive Dislocations
Highest Value Forecasts
What We (Think We) Know




Short Range Forecasts
Medium Range Forecasts
Seasonal Forecasts
Climate Forecasts
Information Sources
National Weather Service
Other NOAA Divisions
Dot-Com Weather
Subscription Services
Primary Issues
Data Overload
Primary Issues
Data Overload
Deterministic vs. Probabilistic
Primary Issues
Data Overload
Deterministic vs. Probabilistic
Importance of Extreme Weather
Primary Issues
Data Overload
Deterministic vs. Probabilistic
Importance of Extreme Weather
Risks and Uncertainty
Risks and Uncertainty
The Overlooked Forecast
Closing Question:
How do we do a better job of communicating risks and
uncertainties for decision making?
[email protected]