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What kind of customer are you referring to? How would our forecasts benefit them?

by Straw 5y ago

an_opabinia 5y ago
> What kind of customer are you referring to? The kind of small energy companies that answer the phone when a startup calls. Presumably if you had an idea for how to do the forecasts profitably you'd just become an energy futures trader yourself. I don't know, I'm not trying to poo-poo your thing. But the ESG / Biden green energy plan / renewables stuff your people are excited about, you make a lot more profit just by showing up and harvesting the incentives than you do like, doing a good job. Berkshire did this (https://www.bloomberg.com/opinion/articles/2019-06-04/warren-buffett-s-fake-solar-generators https://www.bloomberg.com/opinion/articles/2019-06-04/warren...) and it's funny, those people were a scam. That's what I'm trying to say. Profits are pretty dodgy in the energy industry. I like this teeny tiny example though, Active Power, that became a Net Operating Loss shell (also common for biotech), because energy has an easier time booking losses as R&D expenses (https://seekingalpha.com/article/4126904-p10-industries-purchase-of-rcp-advisors-can-bring-150-percent-upside https://seekingalpha.com/article/4126904-p10-industries-purc...). I don't know. There are so, so many examples of hilarious bad actors, from which the profits for small energy businesses come. You're not making forecasts for Exxon, you're doing it for little tiny energy providers. How, really, are they profitable at all?
- Straw 5y ago
  You raise a good point! Actually, we do plan to trade day-ahead energy futures ourselves. However, in several US markets, the markets required for responsive assets such as batteries and gas turbines simply don't exist- there isn't an hour-ahead electricity future. So there's value outside what we could capture by trading directly. Now, if we could get enough interest to make such a short-term futures market and trade on it directly... we'd love to!
- herewego 5y ago
  I think you may be conflating energy usage optimization with futures trading. Utilities often use forecasts for different purposes than futures traders, e.g. demand/response. And there are many utilities that aren’t aren’t tiny. In fact, most are larger than they seem (it’s expensive to be in this business), and all of them are looking to optimize heavily. I work in this field in a similar capacity to these guys and there is money to be made legitimately.
- idiotsecant 5y ago
  There are many midsize utilities that need accurate load forecasting to fulfill their duties as Balancing Authorities and ensure that generation equals load. These are not small companies and the methods currently used are often improvable.

What kind of customer are you referring to? How would our forecasts benefit them?

by Straw 5y ago

What kind of customer are you referring to? How would our forecasts benefit them?

> What kind of customer are you referring to? The kind of small energy companies that answer the phone when a startup calls. Presumably if you had an idea for how to do the forecasts profitably you'd just become an energy futures trader yourself. I don't know, I'm not trying to poo-poo your thing. But the ESG / Biden green energy plan / renewables stuff your people are excited about, you make a lot more profit just by showing up and harvesting the incentives than you do like, doing a good job. Berkshire did this (https://www.bloomberg.com/opinion/articles/2019-06-04/warren-buffett-s-fake-solar-generators https://www.bloomberg.com/opinion/articles/2019-06-04/warren...) and it's funny, those people were a scam. That's what I'm trying to say. Profits are pretty dodgy in the energy industry. I like this teeny tiny example though, Active Power, that became a Net Operating Loss shell (also common for biotech), because energy has an easier time booking losses as R&D expenses (https://seekingalpha.com/article/4126904-p10-industries-purchase-of-rcp-advisors-can-bring-150-percent-upside https://seekingalpha.com/article/4126904-p10-industries-purc...). I don't know. There are so, so many examples of hilarious bad actors, from which the profits for small energy businesses come. You're not making forecasts for Exxon, you're doing it for little tiny energy providers. How, really, are they profitable at all?

Straw 5y ago
You raise a good point! Actually, we do plan to trade day-ahead energy futures ourselves. However, in several US markets, the markets required for responsive assets such as batteries and gas turbines simply don't exist- there isn't an hour-ahead electricity future. So there's value outside what we could capture by trading directly. Now, if we could get enough interest to make such a short-term futures market and trade on it directly... we'd love to!
herewego 5y ago
I think you may be conflating energy usage optimization with futures trading. Utilities often use forecasts for different purposes than futures traders, e.g. demand/response. And there are many utilities that aren’t aren’t tiny. In fact, most are larger than they seem (it’s expensive to be in this business), and all of them are looking to optimize heavily. I work in this field in a similar capacity to these guys and there is money to be made legitimately.
idiotsecant 5y ago
There are many midsize utilities that need accurate load forecasting to fulfill their duties as Balancing Authorities and ensure that generation equals load. These are not small companies and the methods currently used are often improvable.