4 ms·

How does one use weather data in an energy market, if you don't mind my asking?

by mlmonkey 11mo ago

bitdivision 11mo ago
Seems like it would be pretty useful to forecast the supply of renewables (wind, solar, maybe some hydro).
- edbaskerville 11mo ago
  Indeed. In the not-too-distant future where renewables are the vast majority of generation (sooner in China than in the U.S. at current rates of progress), the weather matters more and more.
- chess_buster 11mo ago
  it is indeed https://www.emsys-renewables.com/products/power_forecasts/wind-power-forecasts.php https://www.emsys-renewables.com/products/power_forecasts/wi...
hackitup7 11mo ago
Temperature and weather can have a huge impact on power prices. Small examples: * 90 degree day => more air conditioning usage => power goes up * 70 degree sunny day => that's also July 4th (holiday, not a work day when factories or heavy industry are running) => lots of people go outside + it's a holiday => power consumption goes DOWN * 10 degree difference colder/hotter => impacts resistance of power lines => impacts transmission congestion credits => impacts power prices It's a fascinating industry. One power trading company that I consulted for had a meteorologist who was also a trader. They literally hired the dude from a news channel if I remember it correctly.
jakewins 11mo ago
Yeah exactly like hackitup7 says, it has a huge impact on both sides of the supply and demand equation. It both drives house heating and cooling, which has a massive consumption impact, and it drives solar and wind production. But knowing "there will be a massive drop in temperature between 1pm->2pm" doesn't help much anymore, you need to know which 15-minute or 5-minute block all those heat pumps will kick on in, to align with markets moving to 15-min and 5-min contracts. Major forecasts like ECMWF don't have anything like that resolution; they model the planet at 3 hour time scale, with a 1 hour "reanalysis" model called ERA5.. hoping to find good info on what's available at higher resolution.

How does one use weather data in an energy market, if you don't mind my asking?

bitdivision 11mo ago

Seems like it would be pretty useful to forecast the supply of renewables (wind, solar, maybe some hydro).

edbaskerville 11mo ago
Indeed. In the not-too-distant future where renewables are the vast majority of generation (sooner in China than in the U.S. at current rates of progress), the weather matters more and more.
chess_buster 11mo ago
it is indeed https://www.emsys-renewables.com/products/power_forecasts/wind-power-forecasts.php https://www.emsys-renewables.com/products/power_forecasts/wi...

hackitup7 11mo ago

Temperature and weather can have a huge impact on power prices. Small examples: * 90 degree day => more air conditioning usage => power goes up * 70 degree sunny day => that's also July 4th (holiday, not a work day when factories or heavy industry are running) => lots of people go outside + it's a holiday => power consumption goes DOWN * 10 degree difference colder/hotter => impacts resistance of power lines => impacts transmission congestion credits => impacts power prices It's a fascinating industry. One power trading company that I consulted for had a meteorologist who was also a trader. They literally hired the dude from a news channel if I remember it correctly.

jakewins 11mo ago

Yeah exactly like hackitup7 says, it has a huge impact on both sides of the supply and demand equation. It both drives house heating and cooling, which has a massive consumption impact, and it drives solar and wind production. But knowing "there will be a massive drop in temperature between 1pm->2pm" doesn't help much anymore, you need to know which 15-minute or 5-minute block all those heat pumps will kick on in, to align with markets moving to 15-min and 5-min contracts. Major forecasts like ECMWF don't have anything like that resolution; they model the planet at 3 hour time scale, with a 1 hour "reanalysis" model called ERA5.. hoping to find good info on what's available at higher resolution.